Budget to decide fate of Indian iron ore tussle

The forthcoming budget has brought the issue of iron ore exports to the center stage once again with steel industry hoping for increase in export duty on iron ore to curb exports and miners expecting withdrawal of the same to attract investments.

Indian steel makers have recently refuted claims by iron ore miners that that iron ore exports should not be restricted as it mainly comprises fines that are not being used by the domestic steel industry.

Mr Suchitra Sengupta chief economist at ministry of steel’s Economic Research Unit told TNN that “The general perception is that the Indian steel industry is using basically lump ore and therefore the fines inevitably generated in the process of mining have to be exported. The facts and figures, however, tell a different story.”

As per Economic Research Unit estimates, in 2005-06, consumption of fines in India was 41.2 million tonnes out of a total iron ore consumption of 78.95 million tonnes resulting in 52:48 ratio. As far as the large scale integrated steel producers are concerned, share of fines in total iron ore consumption at around 68% to 70%, which is expected to reach a level of 72% by 2011-12. On the basis of the technology plans of major capacity expansion projects, share of agglomerated fines both sinter feed and pellets in total burden by 2011-12 is likely to touch 85% for SAIL, 90% for TISCO and about 75% for RINL. Apart from these, some of the new major producers using alternate technology routes such as JSW, Ispat and Essar are already using close to 100% agglomerated fines in their plants.

Steel ministry estimates that the entire fines production will be consumed by the steel industry by the year 2011-12, provided the production of ore is not increased for export purpose.

In 2006-07 fiscal, India produced about 160 million tonnes of iron ore and exported about 95 million tonnes. About 85% of this export comprised fines sold largely in the spot market in China at high price. This fiscal, the export level may touch 100 million tonnes as the impact of export duty has been negated by over 100% increase in iron ore spot prices in the global market.

“Indian Steel – Focus East” at Kolkata

Indian steel sector, which is at a cross roads to become 2nd largest steel producing nation after China, is facing many uncertainties mainly due to problems being faced by prospective investors in the areas of land acquisition, raw material linkages and infrastructure development to match increased steel capacity.

Already announced investments by signing MoUs, mainly centered in the iron ore rich states Jharkhand, Orissa and West Bengal in Eastern India, total to much more than 200 million tonnes but are facing great amount of uncertainties. The future of Indian steel sector hinges on overcoming present problems the implementation of these MoUs, which is possible with the investor friendly policies and outlook of these states.

India’s premier auction portal mjunction is organizing an event “Indian Steel – Focus East” on March 12th 2008 to March 13th 2008 at The Oberoi Grand in Kolkata India. The main aim of the conference is to get an outlook of the Indian steel industry with a focus on Eastern states and give an exposure to state government policy makers.

The conference would provide an overview of Indian steel industry, demand and supply outlook and what is attracting Greenfield steel investment in Eastern Region of India. State governments would outline major policy reforms being undertaken by them in the areas of raw material mining, land acquisition and supporting infrastructure, which are probably the key issues in implementing steel projects in Eastern India.

The conference would also present immense networking opportunity with decision makers and well as prospective customers to develop successful strategies for your company in the Eastern India.

To know more about the event, please send a mail to events@steelguru.com

Domestic producers call for hike in import duty on ferroalloys

BL reported that union government could look at increasing the import duty on ferroalloys and noble alloys from the present 5% to 7.5% in this year’s budget to protect INR 5,000 crore domestic ferroalloy industries, which has demanded a hike in the import duty and has written to the finance ministry in this regard.

The report cited an industry official as saying that “Last year, the import duty on ferroalloys and noble alloys was reduced to 5%. But with threats of large scale dumping from China, South Africa and Ukraine, the steel ministry has urged the finance ministry to consider increasing the duty by 2.5% this year.”

Mr Ashim Saraf joint MD of Facro Alloys Limited said that “The Indian Ferro Alloy Producers’ Association has written to the government that despite utilizing around 62% capacity, the domestic industry mines around 3.25 million tonnes of ferroalloys and noble alloys, running into overproduction. If the pace of cut in import duty does not decline, the resultant dumping would lead to a huge outgo of foreign exchange and backwardness to the domestic industry.”

Mr Saraf said that “We have said that since the ferrochrome industry is facing severe problem in getting chrome ore from domestic producers due exports, the government must stop the export of chrome ore immediately. If prior contractual commitments have to be honored then the government must increase the duty from the present INR 2,000 per tonne to INR 5,000 per tonne.”

As per estimates given in the report, Indian imports of ferroalloys have increased by over 165% in the last 3 years. Ferroalloy imports in 2003-04 which was around INR 263 crore, when the duty was reduced to 20% from 25%, has gone up to INR 700 crore in 2006-07.

Indian per capita steel consumption among the lowest – Survey

According to Indian Chamber of Commerce’s report named “Indian Steel Scenario”, India’s per capita steel consumption is one of the worlds lowest despite being the 5th largest steel producer in the world.

It said that “India’s position in steel production will get stronger with time, buoyed by increasing development in order to support the growing needs of the vast nation. However, in comparison to the developed countries, the per capita finished steel consumption, in kilograms, is very low in India. It is even lower to the neighboring country China.”

The report added “While China has seen a significant growth in steel consumption in the last decade, India still has a long way to go. With a strong economy, amongst the fastest growing in the world, and with rising income levels and consumer spending patterns, India’s steel appetite is likely to match the developed countries in the next 1 to 2 decades.”

The report concluded that India’s rapid economic growth is being built on a frame of steel and the industry will continue to play a very vital role in the overall growth of the country and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put India’s steel industry on the world steel map.

25 Indians feared dead in MV Rezzak sinking in Black Sea

It is reported that 25 Indian seamen are feared dead with their Panamanian cargo ship MV Rezzak still untraced in the Black Sea, 6 days after it went missing.

The last contact with MV Rezzak had been made on February 18th 2008, a day after it had left Russia’s Novorossiysk for Bartin in Turkey, with an all Indian crew and a cargo of steel billets.

As per report, 9 of the Indians were from Lakshadweep and 11 others carried passports issued from Mumbai.

An official in the directorate general of shipping said that “Turkey is searching for survivors but have not found anyone so far.” He added that a human could stay alive barely for 30 minutes in the Black Sea’s freezing waters even if he was wearing a life jacket.

Mormugao Port transport operators to go on strike

It is reported that It may be noted that the owners of trucks, tippers and other workers, who have come under Rozgar Bachav Abhiyan, has decided to stop operating trucks and lorries for the Mormugao Port Trust protesting the stopping of coal and coke unloading at berth 10 and 11. The strike would continue till the decision is withdrawn.

The decision to stop transportation of coal and coke at berth 10 and 11 of the Mormugao Port Trust was taken as part of the tripartite MoU, which was signed by the Mormugao Port Trust, the state government and the Mormugao Bachav Abhiyan recently and has come under fire as the people engaged in unloading and transporting coal and coke felt that their livelihood is threatened by the decision.

Mr Lyndon Rodrigues president of Rozgar Bachav Abhiyan informed that more than 3,000 families and their dependents in Vasco are connected with the handling transportation of coal and coke. He said that stopping of handling and transportation of coal and coke without taking the workers and transporters into account is unjust.

Mr Rodrigues said that “More than 5,500 families and their dependents who are working in the pig iron and sponge manufacturing units across Goa will be rendered jobless.”

Several workers associations have come under the banner of Rozgar Bachav Abhiyan. The associations are Mormugao Port Truck and Shovel Owners Association, Tipper and Truck Owners Association, Mormugao Stevedores Staff Association, Mormugao Transport and Dock Workers Union, Zuari and Port Truck Owners Association, Interstate Transporters of Goods and Spare Parts Dealers of Vasco.

New mining policy to draw FDI of INR 5 trillion

BS reported that the long delayed new mining policy is set to attract a foreign direct investment of INR 5 trillion within 5 to 6 years of introduction.

Mr Subbarami Reddy union minister of state for mines claimed that industrialists across the world are eyeing India’s rich mineral reserves of which only 5% of the 187,000 million square kilometer of the country’s mineral wealth is exploited.

He said “Foreign industrialists are grappling with delays in land acquisitions, project clearances and mining leases. These issues have been sorted out in the new mining policy.”

Mr Reddy has appealed to project resistance groups to educate tribals of the benefit of the industrial projects. He hoped that India would be able to mine gold and diamonds worth at least INR 10 trillion to 15 trillion in the next 5 years with the help of global mining giants Rio Tinto, BHP Billiton and De Beers.

The mining sector has also been facing problems regarding environmental protection and tribal rehabilitation. As most of the country’s mining reserves lie in the forest area, both the government and industrialists are facing resistance from locals.

SAIL SSP organizes medical camp around Salem City

It is reported that, under its CSR initiatives, Steel Authority of India Limited’s Salem Steel Plant is actively engaged in taking the medical services beyond the boundaries to the peripheral villages in and around Salem City.

The fifth medical camp of Salem Steel Plant this financial year was held at Jalluthupati in Panamarathupatti Panchayat, where the villagers do not have access to modern medical facilities. Around 315 patients were screened at the camp and free medicines were issued to them.

Mr BB Singh executive director of SSP inaugurated the camp in the presence of Ms Tamil Selvi Panchayat president, Mr TK Mazumdar GM (P&A) and senior officers. The camp was conducted by a team of doctors headed by Dr TN Muralidhara chief (M&HS) of SSP, Dr K Thanigainathan, Dr R Sinronmani and Dr P Amirthavalli.

Jaluthupatti Village is around 45 kilometer from SSP. Nutritional anemia is prevalent in this hamlet, for which around 400 nutrient multi dhal powder packets were distributed. Blood sugar tests were conducted for around 100 patients out of whom two were identified with diabetes. Besides routine medical problems, cases of goiter, tonsillitis, fibroid uterus and Parkinsonism were also identified. Health cards were also issued for the first time, containing details of the patients and their ailments, which can be used for further treatment at the Government hospital or SSP’s hospital.

Terex Pegson to expand operations in India

British heavy engineering firm Terex Pegson has announced an ambitious plan to expand its operations in India to benefit from its growing economy. It will set up a new production site in Bangalore and plans to increase its workforce by a fifth.

Ms Judi Sault marketing manager of Terex said that “A lot of the demand was coming from India, China and the Middle East and it has decided that it would be more viable to produce machines in India. Bangalore site would also make products for other parts of the Terex group based in the United States.”

She added that "We have bought land in India and the intention is to set up a factory facility over there. It will prevent us having to pay import duties. The plan is to have it up and running by 2009."

Terex, which currently employs 320 people, expected its turnover to rise by a fifth to about GBP 178 million in 2008 due to soaring orders.

Railway to fund dedicated rail freight corridor project

It is reported that union railway ministry is considering funding the dedicated rail freight corridor project, following the delay in release of Japanese loan.

The dedicated rail freight corridor project, entailing INR 28,000 crore is being planned since 2005 but stuck in backlog due to various issues like land acquisition. A Japanese agency JICA has conducted the feasibility study for the project and it is now asking the railway ministry to electrify the western corridor. The railway will take at least 3 years that makes a further delay in execution of the project.

Thus, to take the project into fast track, the railway minister has announced that the project would be funded by the ministry itself and had also set up a special purpose vehicle called Dedicated Freight Corridor India Limited.

The project involves laying down of parallel tracks on the golden quadrilateral route covering the four metros, for segregating passenger and freight trains. In the first phase, costing INR 28,000 crore, the eastern corridor from Delhi to Kolkata and the western corridor from Delhi to Mumbai lines will be laid. The eastern corridor will be 1,280 kilometer, while the western corridor would be 1,483 kilometer.

Amtek inks JV with American Railcar for railcar unit

It is reported that Indian auto component major Amtek Auto has signed a MoU with US railcar maker American Railcar Industries Inc to set up a 50:50 JV company for manufacturing railcars.

The signing of MoU is part of the Amtek Auto’s strategy to diversify by setting up the company’s Amtek Transportations Systems division, which includes railways, aerospace and surface transportation system, and will complement its already automotive division.

Amtek is investigating other potential opportunities and acquisition for the transportation division both in the US and European markets. It has planned an outlay of over INR 500 crore for its railways business, which would include the JV with American Railcar Industries.

Amtek is also planning to set up forgings, casting and machining facilities by itself to manufacture components for the railcar and other railway applications.

American Railcar Industries is a designer, manufacturer and marketer of a variety of railcars in North America.

New deep sea port coming up on East Coast

Mr TR Baalu union minister of shipping, road transport & highways last week said that a new deep sea port will come up on the East Coast under the public private partnership model.

Mr Baalu while inaugurating the phase 1 capital dredging works at a cost of INR 91 crore and construction of road works at a cost of INR 9 crore at Ennore Port Limited said that “The exact location of the multi purpose deep sea port on the East Coast will shortly be decided by the union ministry of shipping and the modalities of the project are being examined.”

Foundation stone for container terminal at Ennore to be laid

It is reported that the foundation stone for a INR 1,300 crore container terminal project at Kattupalli in Ennore district of Tamil Nadu, to be implemented under the PPP model, would be laid soon and the global bidding process for short listing and selecting the terminal operator would commence shortly.

Mr TR Baalu union minister of shipping, road transport & highways last while inaugurating the phase 1 capital dredging works at a cost of INR 91 crore and construction of road works at a cost of INR 9 crore at Ennore Port Limited said that “Chief Minister Mr M Karunanidhi would soon lay the foundation stone for a INR 1,300 crore mega container terminal project at Kattupalli.”

Mr Baalu added that “The Netherlands Minister of Port, who recently met me in Delhi, has evinced keen interest to associate with the development schemes of the Ennore Port. Experts from Germany and the Netherlands are going to advise us on the future development of the Ennore Port.”

The 1 kilometer long berth container terminal would be capable of accommodating three mainline vessels and four feeder vessels.

Orissa approves 27 small and medium hydro power plants

PTI reported that at least three of the 27 small and medium scale hydro power generation units will be operational by next fiscal in Orissa.

Mr SN Patro energy minister of Orissa while replying a question informed state assembly informed that the state government has already granted permission for developing small and medium scale hydro power generation units in several places. He said that “Though the government had already identified nearly 70 places for setting up of small and medium hydro power projects ranging from 2 MW to 25 MW, only 27 were given permission.”

While 10 projects would be located in Koraput district, three projects each would be in Rayagada and Malkangiri districts, sources said adding that other places were Baragarh, Keonjhar, Ganjam, Gajapati, Kalahandi and Angul.

The minister said that the small and medium hydro power generating companies had agreed to give 25% of their production to the state while having freedom to sale rest of the power to their choice.

HZL wins Golden Peacock CSR 2007 award

Hindustan Zinc has announced that it has won the Golden Peacock Award for Corporate Social Responsibility 2007 in the 3rd global conference on social responsibility at Vilamoura in Portugal.

Hindustan Zinc was competing with 126 companies in the category.

REpower signs MoU with RWE Innogy for wind turbine unit

It is reported that German based renewable energy company RWE Innogy and wind turbine maker REpower has signed a MoU for a 1,900 MW wind turbine unit worth USD 3 billion.

REpower, controlled by Suzlon Energy Limited would deliver 250 offshore and about 200 onshore wind turbines to RWE Innogy.

Innogy is a unit of RWE AG, an integrated electricity and gas company based out of Germany and having operations in Europe.

Ambuja Cement to buy 3 cargo ships by 2009

PTI reported that Ambuja Cements is expanding its cargo fleet by adding 3 ships by 2009 for an investment of INR 150 crore for the internal movement of the construction material to tap the growing demand of cement in India. At present, it has a fleet of 7 cargo ships for domestic as well as export use.

Mr AL Kapur MD of Ambuja Cement said that "Seeing the demand in India and the cost and problems faced in transporting cement through the surface route, we have decided to primarily opt for sea traffic. To consolidate our strength, we will add 3 cargo ships to our existing fleet by 2009 end." He added that the first of the ships was expected to be delivered during 2008, while the remaining 2 would be delivered in 2009.

Mr Kapur said that the ships are being manufactured in India by a domestic company and only the engines were imported. Two ships would cost INR 52 crore each, whereas one would be for INR 44 crore. He added that "Two ships will have carrying capacity of 4,000 DWT and one will be of 2,800 DWT."

Ambuja Cements currently has 3 dedicated terminals at Panvel in Mumbai, Surat and Mul Dwarka in Gujarat ports and plans to add one more at Cochin port. The Mul Dwarka terminal, which caters to both domestic and international market, has a transportation capacity of 4 to 5 million tonnes a year, while Panvel and Surat have 1.5 million tonnes and 0.8 million tonnes capacities each year respectively. Mr Kapur said that "We are constructing a new terminal at Cochin at an investment of INR 85 crore with carriage capacity of about 1 million tonnes a year, which will be meant for domestic distribution. It will be ready for operation by 2009."

To meet the domestic cement demand created by the infrastructure boom, Ambuja Cements is embarking on an INR 3,500 crore capacity expansion drive, which would take its total production to 25 million tonnes in 2 years. It produces about 18 million tonnes currently and has 5 integrated plants, besides 6 grinding units at different locations across India.

Shree Cement MP project delayed

Projects Today reported that Shree Cement's Madhya Pradesh project is getting delayed due to land acquisition issues.

For the proposed INR 2,000 crore project, Shree Cement has acquired around 90% of the required 1,200 acres of land in Katni in Madhya Pradesh, but is facing problems over the acquisition of around one acre land in the middle of the project area, which the farmers do not want to sell.

It is initiated talks with the Madhya Pradesh government to sort out the issue, but the latter is reluctant to take up the matter speedily, considering the spate of violence and protests that has rocked different parts of the country over similar issues.

Brazil may face steel supply problems in 2008

Bloomberg reported that Brazilian steel industry may have problems in meeting domestic demand this year as there are no planned capacity increases.

Estado cited Mr Christiano da Cunha Freire president of the National Institute of Steel Distributors as saying that if flat steel consumption increases by 15% in 2008, demand will be close to the production capacity of 14 million tonnes. The paper added that there may be supply problems in the second half.

Mr Freire said that “Imports will involve much higher' costs due to the increase in prices and transportation.

BHPB to loose about 7 million tonne coking coal production

BHP Billiton has today provided a preliminary estimate of the production impact of the recent heavy rainfall experienced across Queensland’s Bowen Basin in Australia.

While these assessments are continuing, it is currently estimated that the two significant rainfall events, on January 18th 2008 to January 20th 2008 and February 9th 2008 to February 14th 2008 will impact FY08 production from the BHP Billiton Mitsubishi Alliance owned mines by between 6.5 and 7.5 million tonnes. In addition, the FY08 production impact from the BHP Billiton Mitsui owned mines is estimated to be between 0.5 and 1.0 million tonnes. These assessments include any rollover into FY09.

The BHP Billiton share of this production impact is between 3.7 and 4.6 million tonnes after taking into account relevant ownership. BHP Billiton has insurance cover for property damage and business interruption losses, and potential claims are currently being assessed.

Mr John Smith CEO of BHP Billiton Mitsubishi Alliance said that "These are initial assessments of the impacts on production due to the inability to safely operate the mines and to maintain access for our people and supplies following the rains.”

He said that "We anticipate we will be better informed on the actual extent of the impact as the recovery process proceeds and mines are brought back to full operational capacity. We will provide an update on the impacts if they are materially different from our preliminary assessments once the situation has been fully assessed.”

He said that "Our focus remains on ensuring the safety of all employees and contractors at our operations and on swift recovery of operations, including dewatering of the pits. We are working with the EPA to meet their conditions and minimize downstream impacts.

He added that "We are also continuing to work with our customers to minimize disruption to their businesses.

LME launches steel billet futures contracts

It is reported that the London Metal Exchange has proceeded with soft launch of steel billet futures trade on Monday.

The first available settlement date for both LME contracts is August 20th 2008. Further settlement dates 15 months ahead will also be available. Open outcry floor trading starts on April 28th 2008, when cash contracts also will be available.

The delivery points for the Mediterranean contract will be Turkey and Dubai while for the Far East are Malaysia and South Korea.

While banks, brokers and speculators are eager for a new avenue to trade the global commodities boom, many steelmakers oppose the launch for fear a derivatives contract would actually increase volatility.

Assmang plant in Durban closed after fatal explosion

It is reported that the South Africa’s department of labor has closed the Assmang plant in Cato Ridge in Durban following the death of four workers in a massive explosion on Sunday and 5 more injured.

Ms Zolisa Sigabi a department spokesperson said that "The department has since ordered a halt to all operations in the plant until a risk assessment has been conducted to ascertain whether the furnaces can become operational again."

Ms Sigabi said that a full scale government investigation is underway to establish the cause of the tragedy, including any possible negligence or flouting of occupational health and safety measures.

She said preliminary findings by the department's inspectors indicated that a water leakage into the furnace may have led to the explosion. The impact of the explosion resulted in the wall of the control room facing the furnace to collapse allowing the flames to engulf the entire room.

EU charges Alcan with monopoly abuse on smelting technology

AP reported that European Union regulators have charged the world's biggest aluminum producer Alcan Inc on weekend for antitrust violations, alleging that its contracts forced customers to buy equipment along with smelting technology.

Regulators said Alcan's customers of aluminum smelting technology where it is the world's leading supplier are forced to accept contracts that seem to prevent them from using pot tending assemblies from companies other than Alcan's ECL smelter equipment unit.

EU's executive branch said that this illegal tying might significantly harm customers and end users of aluminum by reducing innovation and increasing aluminum prices.

Canada based Alcan now has eight weeks to defend it in writing and can ask for a hearing before the European Commission decides on fines or orders it to change the contracts.

Mr Stefano Bertolli a spokesman of Rio Tinto Alcan said the company contested the allegations but would cooperate with the European Commission. He added that the EU's formal charge sheet can lead to a company being fined up to 10% of global turnover for each year it violated European law.

Rio Tinto, one of the world's largest mining companies, took over Alcan just last year in a USD 39.7 billion deal that made it the world's largest producer of aluminum and bauxite. Its main rivals are Alcoa Inc of the United States and Russia's UC Rusal.

Allegiance Mining agrees for improved Zinifex bid

Zinifex Limited and Allegiance Mining NL jointly announced a revised takeover offer for Allegiance. Under the revised offer Allegiance shareholders will be offered AUD 1.10 cash per share. The Offer is final as to price in the absence of a superior proposal.

The increased Offer represents an attractive premium for Allegiance shareholders:
1. Cash Offer Price AUD 1.10
2. Premium to Closing Price 55%
3. Premium to 1 Month VWAP 58%

The Allegiance directors, Mr Tony Howland-Rose, Mr David Deitz, Mr Barry Sullivan and Mr Eddie Lee each recommend that all Allegiance shareholders accept the revised offer in the absence of a superior proposal and will accept the revised offer in respect of any Allegiance shares held by them or on their behalf, in the absence of a superior proposal. At the time of this announcement, Mr Shi Peirong a resident of China had not had sufficient time in which to consider the revised offer.

Mr Tony Howland Rose chairman of Allegiance said that "I believe the revised offer better reflects the value of the Avebury project. In the absence of a superior proposal I and the majority of the board intend to accept the AUD 1.10 offer and we recommend that shareholders also accept the revised offer. This recommendation to accept Zinifex's Offer has been made after careful consideration and the decision to recommend it was not taken lightly, particularly in light of the current volatility in world equity markets.”

Mr Andrew Michelmore CEO of Zinifex said that "We are delighted that the Allegiance board is recommending our revised offer. The increased offer represents a very attractive offer and a fair value for Allegiance shareholders, reflecting the high quality of the Avebury nickel project."

Details of global crude steel production in January 2008

World crude steel production for the 66 countries reporting to the International Iron and Steel Institute was 113.039 million tonnes in January 2008 up by 4.9% YoY as compared to January 2007 and 1.1% MoM as compared to December 2007.

The growth in crude steel production during December 2008 among regions was again led by Asia as usual accounting for 54.9% share of total global crude steel production

In million tonnes
Source – IISI

Top 20 nations accounted for 91% of global crude steel production with China taking the major share of 36.2%.

In million tonnes
Source – IISI

ArcelorMittal buy of ferroalloy maker OFZ cleared by EU

Thomson Financial reported that the European Commission has cleared steelmaker ArcelorMittal’s proposed acquisition of Slovak ferroalloy and cored wire maker OFZ.

The transaction was reviewed under the EU's simplified merger review procedure, for cases the commission believes do not pose competition concerns.

OFZ has been a supplier to ArcelorMittal’s eastern European steel mills, which are near its 150,000 tonne per year plant in the north of Slovakia. It produces 141,000 tonnes of ferroalloys in 2006

Xstrata production report for 2007

Global mining major Xstrata has released its update on production during 2007. The highlights of performance are as under

1. Record annual production achieved at Xstrata’s coking and thermal coal, ferrochrome, nickel, zinc mining and platinum operations

2. Record copper production in the second half, with particularly strong operating performances from Tintaya, Ernest Henry and Collahuasi, compensated for lower first half volumes

3. Production of Australian coking, semi soft coal and South African thermal coal up by over 20%, benefiting from lower cost production from the new Wollombi, 5 Seam and Goedgevonden pits

4. Full year of Mototolo JV and start up of newly acquired Elandsfontein operation boosted PGM production to over 83,000 ounces

5. Expansion of existing operations including Raglan (nickel), Rolleston and Cerrejon (both thermal coal), McArthur River Mine and Mount Isa concentrator (both zinc lead) further boosted volumes

6. Strong operating performance achieved despite north Chile earthquakes, flooding in Australia and the Dominican Republic, SAG mill failures at Antamina and Collahuasi and a fire at Mount Isa.

Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters at Zug in Switzerland. Xstrata’s businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with additional exposures to platinum group metals, gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group's operations and projects span 18 countries: Argentina, Australia, Brazil, Canada, Chile, Colombia, the Dominican Republic, Germany, New Caledonia, Norway, Papua New Guinea, Peru, the Philippines, South Africa, Spain, Tanzania, the USA and the UK. Xstrata employs approximately 50,000 people, including contractors.

Angola to focus on iron ore exploration

It is reported that Angola is hoping to boost investment in iron ore exploration as the southwestern African nation diversifies away from oil and diamonds.

Mr Mankenda Ambroise deputy minister of geology and mines in a presentation at the annual Indaba African mining conference in Cape Town said that "Iron ore is one of the commodities that Angola will open soon.”

Mr Ambroise said the Angolan government, presiding over an oil fueled economic boom, saw potential for foreign investors to take stakes in a number of iron ore projects in the country. He added that interest in iron ore mining has jumped in step with sharp rises in global demand for the metal, which is used to make steel.

Mr Ambroise told delegates that poor infrastructure, however is a major barrier to developing mining projects in Angola.

Railways, ports and roads were devastated during the war and remain in poor shape despite the government's reconstruction efforts.

Although Angola is best known for its vast oil and diamond wealth, officials in Luanda are trying to encourage foreign investors to focus on overlooked areas of the natural resources sector, including exploration of base metals and gold.

JFE Steel to hike H beam and construction steel prices

JMB reported that JFE Steel plans to increase the selling price of construction materials steel by JPY 20,000 per tonne.

As per report JFE Steel increased the H beam price by JPY 10,000 for distributors for March production and studies additional hike for April while the firm offers JPY 20,000 H beam hike for major building structural fabricators.

JFE Steel also increased the large diameter square steel pipe by JPY 20,000 for distributors.

Trinidad starts construction of iron ore terminal

It is reported that Trinidad’s state owned National Energy Corporation has started construction of a USD 105 million terminal to handle an estimated 4 million tonnes of iron ore and 3 million tonnes of hot bricketted iron and other downstream products each year once it opens at the end of 2009.

As per reported the port is being built south of Point Lisas harbor to service the needs of Essar Steel and the Westlake Polyethylene Complex.

Taiwanese seamless pipe import from China dips in January

YIEH reported Chinese export of seamless steel pipe to Taiwan in January dropped sharply by 59% MoM to 4,085 tonnes.

As per report Taiwan’s buyers were reducing their purchases, affected by a price rise of USD 100 per tonne to USD 150 per tonne by Chinese producers.

Taiwanese imports of seamless steel pipe from China in December 2007 rose by 95% MoM to 10,028 tonnes as compared to the previous month.

Samsung Heavy 2007 earnings more than triple

World’s second largest shipyard Samsung Heavy Industries Co said that its earnings more than tripled on increased orders for high priced ships.

Samsung Heavy Industries in a regulatory filing said that its net profit reached KRW 485 billion (USD 515 million) in 2007 as compared with KRW 154 billion in 2006. Operating income up by 360% YoY to KRW 457 billion and sales climbed by 34% YoY to KRW 8.52 trillion.

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

Japanese merchant bars output in January down by 11.7%YoY

According to the statistics from the Iron And Steel Institute of Japan, the output of merchant bars totaled 802,200 tonnes in January 2008 decreased by 11.7% QoQ and down by 12.6% YoY. The output has kept decreasing for five months in a row.

Moreover, merchant bars production reached 9.86 million tonnes from April 2007 to January 2008 decreased by 3.6% YoY.

ThyssenKrupp awards more contracts for US steel mill

Business Reporter reported that ThyssenKrupp Stainless USA has awarded contracts to three European companies for some of the production equipment for the USD 3.7 billion steel mills at Calvert in US.

The stainless division and the carbon steel division will share much of the plant, but all the component mills announced last week will be used only to process and finish stainless steel.

ThyssenKrupp officials have said the firms that make the components of a steel plant are mainly based in Europe and Asia.

Mr Scott Posey a spokesman said the company expects the production lines to be delivered in the second quarter of 2010, after some parts of the complex go into operation.

Wesfarmers to hold on to coal assets

It is reported that Australian conglomerate Wesfarmers has ruled out potential asset sales to fund changes planned to make Coles competitive with Woolworths.

Mr Richard Goyder CEO of Wesfarmers told ABC television that the company, which is awash with cash from its lucrative investments in the coal industry, did not need to sell assets despite this year having to refinance AUD 4 billion of debt accrued from the Coles transaction. He added that "We don't need to sell an asset.”

Mr Goyder said that there has never been a better time to own coal businesses and the company expected very strong profits and cash flows from the division in the coming years.

Wesfarmers' diversified portfolio includes, coal, hardware, insurance energy, chemical and safety products. Wesfarmers operates the Curragh coking coal mine in Queensland and the Premier mine in Western Australia.

Waratah Coal Galilee Basin resources reach 3.12 billion tonnes

Waratah Coal Inc announced that a limited drilling program at its Alpha North EPC 1053 license in the Galilee Coal Basin at Queensland, in Australia has increased its JORC compliant inferred resource by 300 million tonnes to 3.12 billion tonnes of thermal coal.

Waratah's EPC 1053 already hosts a JORC compliant inferred resource of 675 million tonnes of thermal coal on its northern portion. This new drilling program will continue to test the unexplored area to the south of this resource covering 140 square kilometer.

EPC 1053 is some 37 kilometer north of Waratah's EPC 1040 which has a recently upgraded JORC-compliant inferred resource of 2.145 billion tonnes. In between Waratah's two licenses, Hancock Prospecting Pty Ltd has historic resources totaling 2.1 billion tonnes.

The Alpha North project benefits from the following:
1. Large resource potential in a previously unexplored area
2. Potentially high quality thermal coal products
3. Proximity to substantial existing resources
4. Recent world wide demand for coal increases dramatically

Coal mining suspended after weekend earth tremor in Germany

AP reported that German mining company RAG Deutsche Steinkohle suspended coal mining in the country's western Saarland region after a weekend earth tremor that disrupted power supplies and caused some damage to property. As per report the seismic shock that hit a mining area around Saarlouis near the French border, on Saturday afternoon had a magnitude of 4.

Police in Saarlouis said that no one was injured, but there was some disruption to power supplies and damage to buildings among them a church in Saarwellingen, which was closed to the public as a precaution.

It is not immediately clear what caused the shock, which originated more than 1 kilometer underground. Local groups say that mining leads to regular seismic shocks in the region and have called for it to be halted.

Mr Karlheinz Pohmer a spokesman of RAG said that, as long as the suspension continues, only about 100 of its 3,600 employees in the region would be needed to ensure mine safety.

Germany plans to phase out unprofitable coal mining altogether by 2018 under a plan that calls for payments to be made to miners to soften the blow.

Yieh Phui predicts positive H1 of 2008

YIEH reported that Taiwan’s Yieh Phui still expect that their business operation in the H1 of 2008 will be positive.

The management of Yieh Phui said that the worst timing for international galvanized steel market has already passed away and that Yieh Phui expects the company's gross profit rate to rise over 10% in the Q1 of 2008.

As the hot roll material price will rise a lot in the second quarter, Yieh Phui will have a greater chance to pass along, through its products, the increase in its material costs.

Yieh Phui also said that it is going to announce its new price at the end of February and so far they expect that the price level may rise quite a bit.

Aleris International temporarily halts Virginia mill operations

Aleris International Inc announced that it will be temporarily idling the majority of its total production at its Richmond in Virginia rolling mill due to the continuing downturn in the North American building and construction industry.

Aleris said that “This action will allow us to better align our production with demand. All production for customers will be phased out during the first quarter of 2008 and transferred to other Aleris facilities in North America. Aleris will continue to provide the same high quality products and services that customers expect.”

Prior to this announcement, the Richmond facility supplied aluminum coil for building and construction applications and employed approximately 100 operations employees. Once the phase out is complete, the facility will employ approximately 25 operations employees and will be used primarily for product development and internal requirements.

Aleris International Inc is a global leader in aluminum rolled products and extrusions, aluminum recycling and specification alloy production. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates 47 production facilities in North America, Europe, South America and Asia, and employs approximately 8,800 employees.

US ports among the biggest polluters - report

New research from Energy Futures finds ports for container ships are among the biggest sources of pollution and greenhouse gas emissions in the US and recent efforts to curb pollution are not yet making a noticeable difference.

Among the proposals to cut port pollution levels are an increase in the use of alternative fuels as well as pollution and emission reduction technologies; the creation of a Federal strategy to clean up ports, coupled with Federal-level funding to finance such a program and the development of global standards for ports' environmental conditions.

Steel prices in Algeria to hit record high by April 2009 – Report

El Khabar reported that steel producer Brazilian Fali is intending to increase the steel prices in Algeria by 65% reaching DZD 10,000 by April 2009. A tonne of steel will be traded at 10,000 DZD, 4 times higher than the price applied 5 years ago.

Mr Larbi Chamane head of Algeria’s Real Estate Developers National Union warned against a construction material shortages crisis with a tonne of steel being traded at 6000 DZD and cement almost unavailable in the market.

He said that record prices of construction materials are the cause of the bad quality of the constructed houses as builders would replace the steel by another cheaper material, without considering such a step as cheating because the houses will not meet the standards stipulated by the law.

Kingdom Holding to invite tenders for Mile High Tower in Jeddah

MEED reported that Riyadh based Kingdom Holding Company will launch tenders for the major construction packages on its project to build the world's tallest tower in Jeddah. The tenders will follow a final investment decision on the project.

The tower in Jeddah, also known as the Mile High tower, could reach 1,600 meters in height, making it twice the height of the current tallest building in the world Burj Dubai, which is under construction. While the final height and number of storey are yet to be finalized, the budget is expected to be up to USD 10 billion.

UK's Hyder Consulting is working in a JV with Arup as engineer on the project. Saudi firm Omrania is the project architect and the US' Bechtel is the construction manager.

According to Mr Rukn Eldeen project manager with Omrania, the tower plot will be 170,000 square meters.

The towers projected height means wind will be a major factor in the design, and Eldeen says the company has spoken to wind consultants and lift manufacturers to deal with the logistical challenge of transporting elevator passengers to such a height.

Airport developments in Gulf valued at over USD 43 billion

Gulf Times reported that Airport developments in Gulf countries are valued more than USD 43 billion, which is expected to significantly increase the number of visitors and industry participants at the forthcoming Airport Show in Dubai.

UAE accounts for roughly half of the Gulf's ongoing airport projects, including USD 10 billion project in Jebel Ali and the USD 6.8 billion expansion of Abu Dhabi International Airport.

Saudi Arabia is modernizing King Abdul Aziz, Madinah and Tabuk Airports at an investment of USD 11.3 billion

New Doha International Airport in Qatar is expected to see USD 5.5 billion investments

The region's airport expansions are driven by rapid economic growth and increased passenger traffic, according to research conducted by Streamline Marketing Group, organizers of.

Airport Show will attract companies involved in construction, operations, technology and services. Taking place in June, the event is expected to feature a line-up of more than 550 exhibitors, with 12 national pavilions representing Britain, Germany, France, Singapore, Chine, Australia and New Zealand and several other countries.

OPEC may cut output as oil demand likely to drop

Mr Chakib Khelil president of OPEC said that he expects oil demand to decrease in the second quarter of 2008 and that the group may agree to cut production at its next meeting.

Mr Khelil said that “We do not expect to put more oil in the market. Inventories are very high and international demand is expected to decrease in the second quarter. OPEC is going either to keep production or reduce it. Prices are high because of speculation and geopolitical problems. The market has already consumed the idea that OPEC is going to reduce production.

Crude oil for April 2008 delivery rose by 0.6% to settle at USD 98.81 a barrel on the New York Mercantile Exchange on February 22nd 2008. The April 2008 contract rose by 3.5%. Prices are up by 62% YoY.

Iraq's oil sector attracts over 70 firms – Report

It is reported that more than 70 global companies are competing to help develop the oil industry in Iraq, which owns the world's third largest proven oil reserves.

According to New Zealand Herald, big oil firms such as Royal Dutch Shell and Total have been positioning themselves for years to gain access.

Iraq produces about 2.3 million barrels of oil a day, a fraction of its 115 billion barrels of proven crude oil reserves, surpassed only by Saudi Arabia and Iran.

Egypt GDP may increase by 7.4% in 2008 – Merrill Lynch

According to the latest Merrill Lynch research report, Egyptian gross domestic product would accelerate further from 7.1% in 2007 to 7.4% in 2008 on the back of strong investment driven domestic demand. But the growth is likely to lose some steam and drop to 6.3% in 2009.

Egyptian economy has increasingly become broad based over the past 5 years, due to strong private sector investments and consumption expenditure.

As per report, Egypt’s export market is increasing its reliance on European and Asian markets and decreasing its dependence on the US market. Egypt’s exposure to the US market is one of the highest in the region and a US recession will take its toll on Egypt’s exports. In 2007, the share of the US in Egypt’s exports and imports dropped to 31% and 22%, respectively. Egypt’s exports to the European Union rose to 40% in 2007 as against 34% in 2002, while exports to Asia accounted for 13% up by 2% over the past 5 years.

SEWA plans AED 561 million service upgrade

Khaleej Times reported that Sharjah Electricity & Water Authority is carrying out generation and desalination projects worth AED 561.4 million to meet growing demand caused by the expansion of the Al Hamriyah and Khorfakkan areas.

Mr Al Waleed Khalid bin Khadem director general of SEWA said that “The projects will provide 140 million gallons of drinking water and 2,580 MW of electricity, which will meet the emirate’s additional water and power demand until 2018. The demand of water and power in Sharjah registers an annual rate of 9% to 10%.”

Mr Khadem said that the new electricity generation plants at Al Hamriyah Power & Water Desalination Station will be based on the combined cycle system that provides high productivity and efficiency and low fuel and operational costs.

The first phase of the project will help to produce 20 million gallons of water per day and is scheduled for completion in summer 2009, with commissioning by summer 2010.

He further added that the power generation section of the Al Hamriyah Power & Desalination Station will also be expanded. With the completion of the project in 2018, the power generation capacity will reach up to 2,580 MW daily. He said “The applied combined cycle system will help to increase the productivity of the new turbines and the generation of more megawatts. The first phase results in the generation of 400 MW and will be completed by 2010, with an additional 1,875 MW to be produced between 2011 and 2018.”

Egypt will begin start gas exports to Syria from March

Mr Sufian Allaw Syrian oil minister said that Egypt will begin exporting natural gas to Syria from March 2008 after the third phase of the giant pipeline project is completed.

Mr Allaw said that it has been agreed that by March 21st 2008, 900 million cubic meters of Egyptian gas will be pumped daily to Syria's Deir Ali power station in Syria in the first year. He added that it would eventually increase to 2 billion cubic meters.

The project was signed in 2001 to supply Egypt's natural gas to Jordan, Syria and Lebanon for 30 years. The first phase that links Egypt with the Jordanian Red Sea port of Aqaba was finished in 2003 while the second stage linking Aqaba with the town of Rihab north of the Jordanian capital of Amman was completed in 2003.

The projects cost more than USD 1.2 billion and it will eventually run from El Arish through Jordan and Syria to the Turkish border with a total length of 1,200 kilometer.

Syria's oil production has declined from 600,000 barrels per day in 2000 to some 360,000 in 2006, and Damascus is trying to compensate by relying more heavily on natural gas.

300 MW Tarfaya wind farm bids due in October

MEED reported that pre qualified companies have been invited to submit proposals for the 300 MW Tarfaya wind farm in Morocco by October 15th 2008. Office National de l'Electricite is the client.

The estimated USD 500 million projects cover the development, financing, design, engineering, procurement, construction, commissioning and operation and maintenance of the farm. A total of 16 companies were pre qualified in August 2007.

UK's Garrad Hassan and Partners is the technical advisor, Chadourne & Parke of the US is the international legal adviser, while Naciri & Associes and Gide Loyrette Nouel is the local legal adviser. HSBC and BMCE Capital are the financial advisers.

Demand for power in Morocco is expected to grow by 8% a year in the coming years. It is aiming to develop 1,000 MW of wind power capacity by 2012.

Dana Gas inks MoU with Ikarus Petroleum

Dana Gas has announced the signing of a MoU with Kuwait based Ikarus Petroleum Industries. Mr Rashid Saif Al Jarwan GM of Dana Gas and Mr Suhail Abograis CEO of Ikarus Petroleum signed the MoU to cooperate on gas projects in the Middle East and North Africa.

The MoU will focus specifically on petrochemicals and downstream projects, including in Dana Gas Cities under development at several locations across the region. The Dana Gas City proprietary concept involves developing local gas based industries, encompassing integrated community optimizing natural gas utilization.

As part of the MoU, Dana Gas, and Ikarus have agreed to discuss and list any and all projects that may be of mutual interest and that are consistent with each company's strategic objectives. They have also undertaken to fully cooperate and coordinate in studying, assessing and negotiating projects and engaging technical and financial consultants, and to cooperate in conducting feasibility studies for any project.

Mr Al Jarwan said that “Dana Gas and Ikarus and are committed to developing the gas industry throughout the MENASA region, and what better way to accomplish this goal than to align our two companies and share knowledge and resources. Through this MoU, we are laying the groundwork for further cooperation between Dana Gas and Ikarus, as well as other companies in the future.”

Mr Abograis said that “Both Dana Gas and Ikarus recognize the potential mutual business advantage to be gained from sharing knowledge and resources, and on this basis we have decided to cooperate on projects relating to the gas industry in the Middle East and North Africa region.”

Iranian South Pars phases 9 & 10 84% completed

Mehr News Agency reported that Iranian South Pars development plan phase 9 and 10 is now completed by 84%. With more than 88% progress in constructing offshore platforms, over 91% progress in laying sub sea pipelines and 82% physical progress in building the onshore refinery, the project is approaching exploitation stage.

Offshore platforms comprises two wellhead platforms equipped with minimum production facilities in addition to two relief platforms, each bridge connected to the associated wellhead platforms.

Sub sea pipelines are two 32 inch pipelines with a capacity of 1 billion standard cubic feet per day. The pipelines will transport the unprocessed offshore hydrocarbon production from each wellhead platform to the onshore gas treatment plant.

Onshore facilities include one gas treatment plant in Assaluyeh with capacity for 2 billion standard cubic feet per day, with its processing units, utilities production and distribution, general facilities and necessary buildings. After treatment the gas will be sent to the domestic gas network and extracted condensate will be stored in tanks for export.

It may be noted that drilling operations of phase 9 started in March 2007 by Sagadrill 2 and has progressed 40%. Phases 9 and 10 will produce natural gas, ethane, gas condensates, LPG and sulfate.

STAHL tests explosion protected crane for Qatar Gas

Germany based STAHL CraneSystems has announced the successful testing of its first explosion protected crane for Qatar Gas at its Jebel Ali facility in the UAE.

The crane was tested with a safe working load of 80 tonnes and a proof load of 100 tonnes. The first factory load test was conducted for 2 cranes part of an order of 6 explosion protected double girder EOT cranes. The testing took place under the inspection and witness of officials of Qatar Gas and Bureau Veritas.

Mr Viswanathan Raman MD of STAHL CraneSystems FZE said that "This order from Qatar Gas is the single biggest order in the history of our company. We are glad that we have been able to meet the requirements of our Qatar Gas."

STAHL CraneSystems has designed and built a unique test rig, where cranes up to a safe working load of 120 tonnes proof and a span of 25 meter can be tested in the future.

Chinese domestic plate prices witness major surge

It is reported that steel plate prices in China, which have been on increase since start of 2007, witnessed a major jump in last few days after the announcement of 65% price hike in iron ore levels.

As per market reports, Yingkou Steel’s 16mm commercial grade plate in Shanghai market is being quoted at CNY 5780 per tonne up by CNY 480 per tonne as compared to February 13th 2008, when Chinese markets opened after Chinese Spring Festival.

As per report, the current plate export offers from tier 1 mills are at USD 900 per tonne on FOB basis levels and from tier 2 mills at USD 860 to USD 880 per tonne on FOB levels.

But no evident change in export offers has been reported, despite surge in domestic market, as they are finding it hard to conclude business at current levels. Most steel makers are reported to be in wait and watch mode.

Baosteel may hike steel prices this week

Reuters reported that Baoshan Iron and Steel Company may hike steel product prices by 12% to 17% in the second quarter of 2008 to offset sharply higher iron ore costs. The price increases are expected to be announced this week.

The report quoted unidentified Baosteel sources as saying that Baosteel may raise the price of its hot rolled sheets by CNY 500 per tonne from CNY 4,042 in the first quarter while hiking the price of cold rolled sheets by CNY 600 per tonne to CNY 800 per tonne from CNY 4,796 per tonne.

Mr Luo Wei a Shanghai based analyst with China International Capital Corp said that “The price gain beat our expectations. Steelmakers' profit in the second quarter will gain as prices more than offset the rise in raw material costs.''

Source wise Chinese import of iron ore in 2007

Chinese import of iron ore soared in 2007 to 383.093 million tonnes from 33 countries.

Imports from 3 main sources Australia, Brazil and India accounted for 84.2% of total iron ore imports

In million tonnes

Panzhihua succeeds in trial production of high aluminum steel

It is reported that Panzhihua Steel has recently produced 38CrMoAl high aluminum steel through converter bloom continuous casting process. This material is mainly used in aircraft industry, regular weapon and machinery manufacturing.

As per report recently the material had usually been produced through electric furnace die casting process in China and maximum aluminum content was less than 0.7%.

Foreign producers of 38CrMoAl steel are few and far between and the technology of protecting slag for continuous casting as raw material is kept as top secret.

Export prices of this high aluminum steel are as high as CNY 30,000 per tonne.

China Orient to increase stake in Foshan Jinxilan CR JV

Chinese steelmaker China Oriental Group Company Limited said that its 97.6% owned subsidiary Hebei Jinxi Iron and Steel Company Limited would buy a 34.71% stake in Foshan Jinxilan Cold Rolled Sheet Company Limited for USD 7.573 million.

As per report, Hebei Jinxi Iron and Steel Company Limited will purchase a 21.5% stake in Foshan Jinxilan Cold Rolled Sheet Company Limited from Accordpower Investments Ltd for USD 4.691 million and the other 13.21% from Foshan Jinlan Aluminum Company Limited for USD 2.882 million.

Based in Foshan City in Guangdong Province in South China, Foshan Jinxilan Cold Rolled Sheet Company Limited is a 60:40 JV between China Oriental Group and Foshan Jinlan Aluminum. It is engaged in producing cold rolled and galvanized products but failed to reach the designed capacity due to fund shortages.

After the completion of the aforesaid deal it will lift its registered capital to USD 55.152 million from currently USD 29.8 million.

Cape Lambert ink MoU with China Metallurgical

Thompson Financial reported that Australian iron ore miner Cape Lambert Iron Ore Ltd has signed MoU with China Metallurgical Group Corp for the sale of its Cape Lambert iron ore project in the Pilbara region of Western Australia.

Cape Lambert Iron Ore Ltd said that as per the MoU, China Metallurgical Group Corp has paid a deposit of AUD 10 million with the sale consideration of AUD 400 million payable in three tranches. It said China Metallurgical Group Corp has also secured an exclusive right, until April 30th 2008 to conduct due diligence for the acquisition of the project.

The deal would also see China Metallurgical Group fund construction of a processing plant at the Cape Lambert project.

Earlier in the month Cape Lambert said studies by an international research centre confirmed much of the silica in a concentrate sample could be removed without much alteration to the iron units. The tests showed that the silica levels could be nearly halved. Following the research, the concentrate assayed 66.4% iron and 4.8% silica, which made it suitable to be considered by steel mills as blast furnace pellet feed.

China Metallurgical Group is a big state owned conglomerate that has been at the forefront of building additional steel making capacity in China and can boast financial interests in five continents. Metallurgical is also partnered with Citic at the nearby Sino Iron ore project.

7 trapped in coal mine flood in Shanxi

Xinhua cited China local work safety administration as saying that at least seven people have been trapped following a coal mine flood in the coal rich Northern Province of Shanxi.

An official with the administration said that the flood occurred around 8:20 PM on Sunday at the Donghe Coal Mine and initially trapped eight miners. One miner was rescued but at least seven others were still trapped.

Rescuers are working to save the trapped miners and local coal mine officials are investigating the cause of the accident.

The mine, owned by the Taiyuan Coal Gasification Corporation Limited, a state owned company is located in Tailin township in Puxian County, Linfen in southwest Shanxi. Its annual capacity is 660,000 tonnes.

Update on Sinosteel plant in Jharkhand state of India

Iron ore trading major Chinese Sinosteel, which had announced plans to set up its first integrated steel plant in Jharkhand and a cold forged rolls unit at Haldia in West Bengal, has provided update on the progress in the matter.

Mr Hongsen Wang MD of Sinosteel India Private Ltd while speaking on the eve of the International Steel Seminar being organized by Steel Scenario journal said that "We are in the mining, designing and equipment supply business and participated in the construction of big steel plants in China, but it will be for the first time that we are putting up an integrated steel plant."

Mr Wang said Sinosteel has submitted the proposal to the government for setting up the steel plant in Jharkhand for which the company would invest two billion dollars. He said "It will be a 5 million tonne plant but in the first phase we will start with 2 million tonne where 3,000 acre would be required for the project.”

He said the company has prepared a report for its plant which would come up between Silli and Chandil and was being vetted through MECON.

Mr Wang added that "We will try to get a captive mine and apply for the mining lease. We will, however, not wait for the captive mine. We will start construction as soon as we get the land. He said 30 acre had been acquired for the project in Haldia which would be set up at a cost of USD 25 million.”

Chinese province wise ferroalloy production in 2007

It is reported that China produced 17.467 million tonnes of ferroalloys in 2007 up by 22.1%YoY as compared to 14.306 million tonnes in 2006.

Inner Mongolia took the first spot with 3.063 million tonnes accounting for 17.5% of China’s total ferroalloy production. Top 5 provinces accounted for 55.1% share.

Province wise detail is as under

In million tonnes

NDRC finding ways to reduce the iron ore imports

It is reported that after 65% hike in iron ore prices Chinese government is trying to find ways to cope up with the situation and is considering various steps including reduction in iron ore imports.

Mr Zeng Shaojin the executive VP of China Mining Association disclosed that China’s Ministry of Land and Resources, National Development and Reform Commission, Ministry of Commerce and other related departments are negotiating to reduce the import of iron ore and the corresponding work will be carried out gradually.

Mr Shaojin added that “At the same time, China Steel Industry Association, China Metallurgical Mining Association and China Mining Association etc are organizing the member units to asses the current situation as 65% price increase is unacceptable for Chinese steel enterprises.

Chongqing Steel increases construction steel prices

It is reported that Chongqing Steel has raised prices for some construction steel products based on prices published recently.

Wire Rod price up by CNY 50 per tonne.
Latest EXW price stands at CNY 4900 per tonne for Q235 6.5mm high speed wire rod and CNY 4890 per tonne for 8mm and 10mm Q235 high speed wire rod.

Rebar price up by CNY 50 per tonne.
HRB335 14mm rebar is now offered at CNY 5000 per tonne
HRB335 12mm rebar is now offered at CNY 5100 per tonne
HRB335 16mm to 25mm rebar is now offered at CNY 4900 per tonne
HRB335 28mm rebar offered at CNY 4950 per tonne
HRB335 32mm rebar is now offered at CNY 5000 per tonne.

Prices listed above are inclusive of 17% VAT, effective as of February 22nd 2008.

Taiyuan Steel hikes March HRC prices

It is reported that Shanxi based Taiyuan Steel has released its HRC price for March 2008. HRC prices are raised by CNY 350 per tonne from that for February productions.

Q235 3.0mm HRC is quoted at CNY 4440 per tonne;
Q235 5.5mm HRC is now quoted at CNY 4360 per tonne.

Prices listed above are exclusive of 17% VAT effective as of February 22nd 2008.

Shenhua 2007 net profit up by 19.37% YoY

China's Shenhua Energy Co Ltd has announced that its net profit in 2007 went up by 19.37%YoY as compared to 2006.

According to Chinese accounting standards its net profit was CNY 23.148 billion in 2007 as compared to CNY 19.392 billion in 2006.

In CNY billion

17 jailed in China for coal mine blast claiming 105 lives

Xinhua reported that 17 people were given jail terms ranging from one year to life imprisonment for a coal mine gas blast that killed 105 miners and injured 18 others at North China's in Shanxi Province in December 2007.

According to the ruling of a public trial held in a stadium in Linfen City recently Mr Wang Hongliang the legal representative, actual investor Mr Wang Donghai of Ruizhiyuan Coal Mining Company Limited, and Mr Kong Huiping a manager in charge of production of Xinyao Coal Mine managed by the company were sentenced to life imprisonment. The city court said the other management including Mr Gao Jianmin the colliery manager, Mr Qin Sanshun vice manager were also jailed for up to 20 years.

The company was also fined CNY 185.2 million for illegal trade of explosives, illegal working on unproved coal bed and evading tax.

The court said the Ruizhiyuan kept increasing the output of No 2 coal bed in the Xinyao Coal Mine since 2004. It also worked on the No 9 coal bed without approval, despite its designed production capacity of 210,000 tonnes a year. To conceal their illegal operation, the company even built a secret pass between the two coal beds and shut the entry during authorities' inspection. The explosion occurred in a 40 meter tunnel of the No 9 coal bed which was not equipped with any ventilating facilities. Gas density accumulated beyond the safety limit and spark triggered the blast. The colliery managers delayed reporting the accident to local authorities while sending other workers down the shaft for rescue operations.

The explosion took place at 11:15 PM on December 5th 2007 at Xinyao Coal Mine in Hongtong County, when 128 miners were working in the shaft. The accident left 105 people dead, eight injured seven seriously and also caused an economic loss of CNY 42 million.

China to eliminate preferential power for aluminum producers

It is reported that China will eliminate the preferential power prices offered to high consuming aluminum smelters as part of a national campaign to improve energy efficiency.

The National Development and Reform Commission said it would begin by abolishing the favorable price policies offered to aluminum firms in southwest China's Guangxi and Sichuan provinces and northwest China's Gansu province.

NDRC said the prices paid by certain smelters and alumina producers in southwest China's Chongqing will rise by CNY 0.01 per kilowatt hour.

Henan Province prohibits coal prices rise for power plants

According to Henan Province Coal Industry Authority, the provincial government has prohibited rise in coal prices to prevent disruptions in coal powered electricity generation.

Considering the recent electricity supply situation, Henan province took decisive measures to ensure the normal operation of power grids and asked the coal production enterprises not to raise the coal prices.

Henan Province expects problems in electricity supply as power grid in Southern snow disaster area needs to resumed for normal operations and the industrial and agricultural production will continue to need more electricity.

SeverStal unveils USD 6 billion plan for Russia

The Times reported that Russian steel major SeverStal is to mount a USD 6 billion investment program in its home operations, including building several new plants and doubling output at one of its key factories this year.

By 2011, SeverStal plans to boost steel output by 25%. Severstal expects to sell 70% of its Russian produced steel in its home market as construction soars by 20% and large infrastructure projects, particularly in the energy sector, reshape the economy.

Mr Alexei Mordashov CEO of Severstal in an interview with The Times backed claims made this month by President Mr Putin that Russia's economic development could make the country the world's most attractive business location by 2020. He said “I think that is absolutely realistic, with our strong industrial base, natural resources and the education of our people, despite the turmoil of last decade.”

Mr Mordashov said that “We see the growth of a lot of Russian companies who have become world players in the energy sector, of course, in metal and we see also capital inflow into the country. With Russia's managerial capabilities, the country was on track to take its companies to a world class level.”

Mr Mordashov acknowledged that SeverStal would be affected by international events, but believed that the risk of recession in Russia was much lower than elsewhere. He said “The world has come through many crises in the last 20 years, in the middle Eighties, the middle Nineties, and came through much stronger. We are seeing what economists call decoupling. The Asian economies plus Russia and Brazil are becoming the second engine of world economic growth.”

Last year Russia's GDP growth was 8.1% and similar rises are forecast for the next few years. Mr Mordashov is hopeful that the strength of his home economy will help to shield the company from uncertainty in the global markets.

Russia to increase zinc exports

FIS reported that although the Russian market of zinc based products is gaining momentum, the situation is far from being balanced.

As per report, due to the expansion of existing capacities and construction of new facilities, zinc production will exceed 500,000 tonnes by 2012 whereas domestic consumption will total only 280,000 tonnes to 300,000 tonnes.

The report added that Russian galvanized capacity and demand also face similar imbalance on account for quality. As per report, Russia makes over 2.5 million tonnes of galvanized products but mostly suitable for construction segment and high end products required for auto industry are being catered from overseas suppliers to some extant.

Gazprom hits Ukraine with new demands

It is reported that Russian gas giant Gazprom last week made new demands against Ukraine, insisting the country must return 4 billion cubic meters of natural gas may posing a major challenge to Ukraine and may deplete its natural gas reserves.

Ms Yulia Tymoshenko prime minister of Ukraine, who spent five hours in talks with Mr Alexei Miller CEO of Gazprom last week at Boryspil airport after arriving from Moscow, said the new demands had surprised her government.

She said “It appears that the problems are significantly worse than has been assumed by the government. Ukraine, besides cash, also owes billions of cubic meters of gas that must be returned in kind.”

Ms Tymoshenko said that Ukraine will clear USD 1 billion debt that had been owed by Naftogaz Ukrayiny, the national oil and gas company, for gas supplies delivered in November and December 2007.

Naftogaz already paid a total of USD 284 million against the debt over the past seven days in two installments of USD 178 million and USD 106 million.

Gazprom has been earlier estimating the overall debt at USD 1.5 billion, which included USD 1 billion for gas supplied in 2007 and USD 500 million for gas supplied so far this year.

Raspadskaya Yuku combine to have 30% share of Russian coking coal market

It is reported that investment company FINAM has increased the assessment of shares of OAO Raspadskaya due to favorable conditions of the coal market, good production results of the company in 2007 and forthcoming merger with the Yuzhkuzbassugol.

Mr Denis Gorev analysts of FINAM forecast that "Already by October November 2007 the spot price of coking coal went up by 40% to 50% exceeded the level of the beginning of the year. We expect that this trend will continue in 2008. Soon, it is possible another increase in the price of coking coal and concentrate and growth could amount to about 20%.”

Raspadskaya, which has about 19% share of the Russian coking coal market, after merger with Yuzhkuzbassugol, would command share of more than 30% of the Russian production of coking coal.

Coking coal production in Russia in 2007 increased by 2% YoY to 69.6 million tonnes. The main reasons for such slow growth were numerous accidents at mines in particular at Yuzhkuzbassugol, which led to acute shortages of concentrate for coking in Russia and significantly increased prices.

Renault to acquire 25% stake in AvtoVAZ

It is reported that Renault has filed an application with the Federal Antimonopoly Service to acquire a 25% share in AvtoVAZ. The structure of the deal has not been determined yet. Renault will either receive a blocking package in the plant or it will buy a 12.8% share, which will increase to 25% by summer. Troika Capital Partners is the seller of the shares.

As per report, agreement on the sale of the shares will be signed on February 29th 2008. The first option for the deal, the purchase of 12.8% of the plant's stock with a subsequent increase could take place after the redemption of reacquired stock. The second option is the immediate acquisition of 25% of the stock.

Observers say the second option is less risky for Renault, because it allows it to obtain a blocking package as soon as the agreement is signed. The value of the deal should be USD 1.3 billion. However the first option seems to be more likely.

Experts say it is also the more transparent. The second option would not give Renault a blocking package immediately in any case because of the complex ownership structure. The main thing is to begin designing new models soon.

Rusal concludes feasibility study for Tayshetskogo plant

The Russian Aluminum announced that it has completed process of agreed plans for Tayshetskogo aluminum plant construction. Construction would start after approval of the draft plan and is scheduled for completion in the fourth quarter of 2011.

The refinery's capacity is 750,000 tonne of aluminum a year. Planned investments for the construction of this facility are about USD 2 billion. Tayshetsky plant will consist of 4 electrolysis buildings equipped with the most modern RA 400 cells. It will also have foundry, anode, power plants, scrubbing facilities, as well as a full range of infrastructure.

Plant construction feasibility report is prepared by international engineering company Bechtel Corporation, with the participation of specialists Engineering and Construction Division of Rusal.

South Korea and Uzbek to ink gas development JV

Yonhap reported that South Korea's state run Korea Gas Corp will sign a preliminary accord with Uzbekistan's state owned Uzbeknefgaz this week to jointly develop a gas field in the central Asian country.

The officials at the ministry of commerce, industry and energy said the 50:50 deal calls for the two sides to set up a joint firm to develop the Surgil gas block in western Uzbekistan near the Aral Sea.

Russian foreign trade in 2007 up by 23% YoY

PRIME TASS, with reference to the information of the Federal State Statistics Service on the basis of calculations of the Central Bank of Russia recently, reported that Russia’s foreign trade turnover in 2007 increased by 23.4% YoY and amounted to USD 578.2 billion.

In 2007, Russia increased its export by 16.9% YoY to the level of USD 355.2 billion and its import by 35.4% YoY to USD 223.1 billion. Russia’s positive foreign trade balance in 2007 amounted to USD 132.1 billion in comparison with USD 139.2 billion in 2006.

Russia and Byelorussia to establish cargo transit scheme

ITAR-TASS reported that Russia and Byelorussia will establish the united transport and logistics scheme for cargo transit through Kaliningrad.

The report said for this purpose the infrastructure of the future deep water port of Baltiysk and the ring rail road are being built now.

According to experts, the difficulty is unequal tariffs for transportation by rail from Kaliningrad and Klaipeda, established by Lithuania.