Indian iron ore spot prices increase in last week

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced that the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on February 25th 2008.

The change is with respect to prices posted on February 18th 2008

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

Mr Roongta inaugurates construction of oxygen plant No 2 at SAIL RSP

It is reported that Mr SK Roongta chairman of SAIL has inaugurated the commencement of major project activities of Rourkela Steel Plant’s Tonnage Oxygen Plant III in a ceremony held at the construction site.

Other members of the SAIL board including Mr BN Singh MD of Rourkela Steel Plant besides several senior executives and employees of the Steel Plant were present on the occasion.

Tonnage Oxygen Plant III, which will have a capacity of 700 tonnes per day, is being set up to meet the additional requirement of oxygen by 2009, arising due to the installation of coal dust injection technology in existing blast furnaces and also for meeting the enhanced production levels of crude steel by introduction of simultaneous blowing in steel melting shop number 2.

The new oxygen plant will supply high purity gaseous oxygen, nitrogen and argon also incorporates the facility to produce liquid oxygen, nitrogen and argon.

Anti POSCO faction fears police action in disguise

SNS reported that POSCO Pratirodh Sangram Samiti, which has been leading the anti project movement for over 2 years, is apprehensive of the police storming its stronghold at Dhinkia village on the plea of possible Naxal intrusion.

Mr Abhay Sahu leader of the PPSS held a meeting at Patana village recently to discuss strategies on countering any such forceful entry by the police. The meeting held at Patana recently decided to battle it out and warned the police against any such misadventure.

It may be noted here that the administration has not been able to enter Dhinikia for more than two years and the police deployment is limited to the periphery of the village. Mr Sahu and other activists are virtually holed up in Dhinkia. But with the deadline for commencement of ground leveling work for the project approaching the PPSS cadres are edgy. The government has announced that work will commence on April 1st 2008.

Indian Railway Budget 2008-09 for freight business

Reductions & Concessions
1. 5% reduction in freight rates for Petrol and Diesel
2. 14% reduction in freight rate of Fly-ash
3. Liberalization of Traditional Empty Flow direction incentive scheme
4. 30% discount on entire traffic in place of incremental traffic booked from goods shed
5. Increase in discount on incremental traffic booked from private sidings from 30% to 40%.
6. 6% freight concession for traffic booked from other States for stations in North Eastern States.

New Initiatives
1. Target for loading fixed at 850 MT in 2008-09.
2. Blue Print prepared for High Density Network.
3. Top priority being given to port rail connectivity projects.
4. New and dedicated iron ore routes to be upgraded and constructed
5. Work on Eastern freight corridor from Ludhiana to Dankuni and Western freight corridor from Delhi to JNPT to start in 2008-09
6. Procurement of Rolling Stock: All time high of 20,000 wagons, 250 diesel and 220 electric locomotives to be manufactured
7. New Wagon Leasing Policy and Wagon Investment Scheme formulated to increase availability of wagons in the system
8. Discounts for development of bulk and non-bulk goods terminals

TATA Steel places order for melt shop equipments

TATA Steel awarded SMS Demag Germany, an order to supply an X Melt converter melt shop and a CSP plant. The order is for supply of the mechanical equipment and the X Pact electrical and automation systems. Commissioning of the plants is scheduled for the end of 2010.

The supply for the X Melt steelworks includes two converter vessels as well as the gear units with pneumatic emergency drive, lance equipment and the converter lining facilities. Each of the two converter vessels will have a tapping volume of maximum 170 tonnes of steel. Both vessels together have a nominal annual production of 2.8 million tonnes. They will be equipped with the maintenance free lamella suspension technology developed by SMS Demag. The respective primary exhaust gas systems of the two new converters operate according to the proven Baumco system, using wet cleaning and the subsequent re use of the resulting fumes to improve energy efficiency. On the secondary side, dedusting of the environment is effected by means of two electrostatic precipitator units.

The CSP plant is rated for an annual capacity of 2.4 million tonnes of hot strip 900mm to 1,680mm wide and 10mm to 20mm thick. Depending on the requirements of the process and the final product, the slab thickness can be steplessly adjusted in ranges of 50mm to 70mm and 70mm to 90mm. The CSP plant consists of two vertical bending machines, the two roller hearth soaking furnaces with swivel ferry, a six stand rolling mill, a laminar strip cooling section and two down coilers. A seventh finishing stand and a third coiler may be added at a later stage.

TATA Steel intends to use the CSP plant for focusing on high grade products. Beside carbon steels, the product mix includes non grain oriented electrical steel strip, pipe grades and dual phase steels.

The scope of supply of the X Pact electrical equipment and automation system for the X Melt steelworks and for the CSP plant includes the electric drive systems, the basic automation system including visualization system, the technological control systems as well as process models. The entire automation system will be tested and optimized under near-operating conditions using the Plug & Work concept, thus substantially reducing the commissioning phase.

In 2007, TATA Steel awarded SMS Demag a contract for the modernization of its existing hot strip mill in Jamshedpur and for the construction of a new oxygen steelworks with continuous slab caster at the Kalinganagar works.

Indian SS consumption to increase due to wagon building

India's stainless steel consumption will rise by at least 140,000 tonnes over the next one year or so after the railway minister announced plans to build new freight wagons and passenger coaches from the metal.

Mr Lalu Prasad Yadav union railways minister told Parliament that 20,000 new freight wagons would be needed in 2008-09 and they would be constructed from stainless steel. He added that all new passenger coaches would be made from the commodity by the following year.

Mr NC Mathur president of the Indian Stainless Steel Development Institute said that "Each freight wagon will use 7 tonnes of stainless steel. 20,000 such wagons will be made requiring 140,000 tonnes of stainless steel nickel free grade in the coming year or so."

BPSL to extends its CSP facility at Orissa plant

Bhushan Power & Steel Limited has placed an order with SMS Demag for the extension of its CSP facility. The order comprises the installation of a second casting strand and the extension of the rolling mill by a sixth stand and a second coiler.

The CSP plant of Bhushan Power & Steel in Orissa is still under construction and will go into operation as a single strand facility in the spring of 2008. In its present extension stage, the mill attains an annual capacity of 800,000 tonnes with a maximum strip width of 1,300mm.

From mid 2010, the plant capacity will increase to 1.6 million tonnes each year due to the installation of the second casting strand and the second coiler. At the same time, Bhushan Power & Steel will be able to reduce its minimum strip gage from 1.5mm to 1.2mm by means of rolling with six stands.

BSL signs two JV with Bowen Energy Limited

Bhushan Steel Limited announced that it has signed two JVs with Bowen Energy Limited of Australia regarding exploration and commissioning of coal mines in Australia.

Indian Railway Budget Estimates and Annual Plan 2008-09

Budget Estimates
1. Freight loading target - 850 million tonnes
2. Revenues in Freight earnings to be INR 52,700 crore
3. Passenger earnings to be INR 21,681 crore
4. Gross Traffic Receipts to be INR 81,901 crore

Annual Plan
Annual Plan of INR 37,500 crore. Thrust areas include enhancement of high density network routes, improvement and expansion of traffic facility and network, construction of flyovers, bypasses and up gradation of goods sheds.
1. New Lines- INR 1,730 crore
2. Gauge conversion – INR 2,489 crore
3. Electrification – INR 626 crore
4. Metropolitan Transport Projects – INR 650 crore
5. Track renewal – INR 3,600 crore
6. Bridges - INR 600 crore
7. Signal & Telecommunication works – INR 1,520 crore
8. Road over and under bridges - INR 700 crore
9. Manning of unmanned level crossings – INR 600 crore
10. Passenger amenities - INR 852 crore

Targets
1. New Lines - 350 kilometers
2. Gauge conversion - 2,150 kilometers
3. Doubling - 1000 kilometers

Punjab based steel makers call for iron ore export ban

PTI reported that Punjab based steel producers have sought from union finance minister in the coming budget to completely ban or impose duty on the export of iron ore and abolish import duty on secondary steel in order to bring down the steel prices.

Besides, the industry, mainly concentrated in Mandi Gobindgarh, Khanna and Ludhiana also urged the government to reduce central excise duty on steel items form 16% to 8% which would help the steel consuming industry such as bicycle to get steel at cheaper rates.

Mr Vinod Vashisht president of All India Re Rollers Association said that "To save the small steel producers which mainly cater to light engineering industry, the government should either ban the export of iron ore or impose an export duty on it in order to discourage its export. These steps, besides curbing the artificial shortage in domestic market, will also result in sufficient availability of raw material such sponge iron to the small steel producers at a reasonable rates."

Meanwhile, Mr KK Garg president of North India Induction Furnace Association said that the industry also demanded from the government to keep imported scarp out of the preview of import duty. He added that "It is unviable for us to import scrap from other countries as the government has imposed custom duty of 5% on it. The government should look into it seriously and exempt it completely from import duty."

Mr Garg further added that steel industry is also of the view that the government should also bring down the central excise duty on finished steel to 8% from 16%. The industry is optimistic of moderating the prices of sponge iron by INR 3000 to INR 4000 per tonne if the government takes these steps.

Bhuwalka Steel to take over Benaka Sponge

Bhuwalka Steel Industries Limited announced that its board of directors at a meeting held on February 25th 2008 has cleared the taking over of Benaka Sponge Iron Private Limited at Bellary by way of all cash deal of INR 9.9 crore as a part of its strategy of backward integration.

Benaka is located in Belagal Village of Bellary and is very close to iron ore mining belt. Benaka has at present 2 Kilns of coal based sponge iron plant of the capacity of 100 tonnes per day each. Benaka is estimated to post a turnover of INR 56 crore with a net profit of INR 3 crore during 2007-08.

With this takeover, Bhuwalka Steel will have access to sponge iron to the tune of 60,000 tonne per annum immediately and also this site will be available for future growth.

Mr Suresh Kumar Bhuwalka MD said that Benaka will become subsidiary of Bhuwalka Steel Industries and will enable the group to step into Steel making through prime route by integrating facilities like sponge, power, steel melting shop and rolling under one roof.

Orix invests USD 20 million in Maithan’s steel unit

BS reported that Japanese conglomerate Orix Corporation has made USD 20 million investment in an INR 600 crore steel project being set up by Kolkata based Maithan group.

Maithan is setting up a 400,000 tonne capacity plant under Maithan Ispat in Duburi and will produce structural steel heavy sections. Structural steel has been commissioned and heavy sections will be commissioned in March 2008.

Maithan group has interests in ferro alloys, refractories, sponge iron and steel. In 2004, it had signed a MoU with the Orissa government, under which captive ore has been assured.

Steel transportation by rail to increase by 67% by 2011-12

Setting a target of over 10% increase in freight earnings during the next fiscal, Indian Railways said that it aims to transport 200 million tonnes of steel by 2011-12 up by 66.67% from the current level.

Mr Lalu Prasad Yadav union railway minister, while presenting the Railway Budget 2008-09 in the Parliament, said that "Indian Railways receives 120 million tonnes traffic from the steel industry every year and we have targeted traffic of 200 million tonnes from the steel industry by 2011-12."

Mr Yadav said that steel production is expected to increase to 110 million tonnes from 55 million tonnes by 11th plan. He added that most of the new dedicated iron ore routes will be constructed or upgraded for 25 tonne axle load and some routes will be made suitable for running 30 tonne axle load trains.

ArcelorMittal launches CSR plan in Jharkhand

BS reported that, after the selection of Torpa Kamdara region as the proposed site for its 12 million tonne integrated steel plant, ArcelorMittal has announced a slew of corporate social activities in the region.

In the first phase, ArcelorMittal proposed to start professional training institutes like industrial training institute, which would strive to impart training to the local youth. ArcelorMittal is under advanced consultations with the Jharkhand government regarding allocation of land for the ITI and hoped to start regular session within a year. Fifty scholarships would be awarded to deserving local school girls and boys of the region on merit, which on a tenure basis for three years would be renewed annually on the basis of their performance.

ArcelorMittal would also sponsor inter block hockey tournament for girls and boys for Khunti and Gumla districts. The tournaments would be organized with the support of district and state hockey federations.

Mr MP Singh VP M&A at ArcelorMittal said that the girls and boys in the area would be able to significantly improve their entrepreneurship, employability and earning capabilities through the training facilities and enhance the probability of their recruitment in the future operations of ArcelorMittal in Jharkhand.

Mr Singh said that “The government of India, Jharkhand government and various non-governmental organizations are quite conscious of the developmental needs of the area and have been promoting suitable developmental activities in the region. ArcelorMittal would be willing to support such efforts of the governmental and non-governmental organizations. This is part of the corporate responsibility strategy of ArcelorMittal wherever it operates to act as socially responsible leaders since the very first days of project implementation.”

Indian Railway Budget 2008-09 – Important announcements

1. A new rail coach factory to be set up in Kerala

2. A new wagon reconstruction unit to be set up at Garkha in Chapra District.

3. Modernization and development of Workshops at Jamalpur, Lilluah, Perambur and Ajmer

4. Taking over of Mokama and Muzaffarpur wagon factories.

5. Setting up of a 1000 MW thermal power plant, a joint venture of Indian Rail Bijli Company Ltd. with NTPC, at Nabinagar District of Auragabad in Bihar

Jindal Saw Q3 2007 net profit surge by 854% YoY

Jindal Saw Limited has announced the following audited results for the October to December 2007 quarter and also for October 2006 to December 2007 period

The results for October to December 2007 quarter
Jindal Saw Limited has posted a net profit of INR 5738.80 million for the October to December 2007 quarter up by 854.3% YoY as compared to INR 601.30 million for October to December 2006 quarter. Total income has increased from INR 11936.20 million in October to December 2006 quarter up by 35.1% YoY as against INR 16134.40 million for October to December 2007 quarter.

The results for October 2006 to December 2007 period
Jindal Saw Limited has posted a net profit of INR 8763.80 million for October 2006 to December 2007 period while, total income is INR 67968.50 million.

The audited consolidated results for October 2006 to December 2007 period
It has posted a net profit of INR 13293.70 million for October 2006 to December 2007 period while, total income is INR 74673.80 million.

Indian Railway Budget 2008-09 – Steelmakers relieved

Steel and cement sectors heaved a sigh of relief as Mr Lalu Prasad Yadav union railway minister maintained the status quo in terms of freight rates.

Mr H M Nerurkar COO of TATA Steel said "The budget promises a lot of action and it has many initiatives that can be taken forward. We would also like to congratulate the Minister for presenting a surplus budget of 25,000 crores and provisions for use of IT and also proposal for investment in infrastructure. There has been no increase in the freight in comparison to last year and there has been no adverse effect compared to previous year. But we were expecting a reduction in freight for raw material and steel as the Indian freight rate is the highest in the World.”

Mr Y Siva Sagar Rao joint MD of JSW Steel said “Doubling of some railway lines would definitely ease the movement of iron ore, but the wagon availability should improve further. As all steel plants are expanding and the railways share would increase, there is a need for special attention for the rake availability.”

Mr RK Sharma secretary general of Federation of Indian Mineral Industries said “It is good to note that freight charges have not gone up. But I hope the railways do not increase freight during the course of the year like last year. During last one year the freight has been revised five times that resulted in 52% hike.”

Ramunia wins USD 685 million pipeline job

Reuters reported that two subsidiaries of Malaysian oil and gas services firm Ramunia Holdings Bhd have won a USD 685 million contract to build a submarine pipeline off India's west coast.

As per report India's Oil and Natural Gas Corporation Ltd awarded the contract.

Indian Railway Budget 2008-09 - Future Vision

Vision 2025 document aims at setting the roadmap for coming 17 years for customer centric and market responsive strategic initiatives.

1. Information Technology Vision 2012 aims at radical changes in IT applications on a common platform with focus on improvement in operational efficiency, transparency in working ad better services to the customers.

2. Multi-Departmental Innovation Promotion Group at Apex Level.

3. Public-Private Partnership schemes to be launched for attracting an investment of INR 100,000 crore over the next five years for developing world class stations, rolling stock ad other logistics.

4. Commercial use of Railway land by Rail Land Development Authority to give a boost to Railway Revenues.

TATA Steel to expand steeljunction initiative

The Telegraph reported that TATA Steel will expand its retail network in the next 1 year and plans to increase the number of its steeljunction stores to 50 from 5 at present by March 2008.

Mr Sarvesh Kumar retail initiative chief of TATA Steel said that “We will expand more in the east and enter either the northern or the western part of the country next year.” He added that it spent the last 2 years fine tuning the retail model for future expansion.

TATA Steel started its steel retail business steeljunction in 2005 from Calcutta. The existing stores are located in and around the city. Steeljunction provides items such as TMT bars, steel furniture and cooking utensils. It started with a 23,000 square feet store at Topsia on the Park Circus Eastern Metropolitan Bypass connector. It later set up four smaller stores of 1,800 to 3,000 square feet area around the big one.

TATA Steel will follow the same model in its future ventures, one large flagship store and smaller ones around it. The smaller stores will come up on franchisee basis. The flagship stores will be built and managed by the company itself. The hub and spoke model will also help manage the supply chain. Big stores will provide back-end supply support to smaller ones.

BHEL bags INR 1,075 crore EPC contract from GSEG

Bharat Heavy Electricals has bagged an EPC contract worth INR 1,075 crore from Gujarat State Energy Generation for setting up a 350 MW gas turbine based combined cycle power plant at Hazira in Gujarat. The project is slated for completion within a period of 27 months.

BHEL's scope of work in the present project envisages design, engineering, manufacture, supply, erection and commissioning of one frame 9FA gas turbine generator set, one steam turbine generator set and one heat recovery steam generator with state of the art controls and instrumentation C and I, associated auxiliaries and balance of plant, in addition to complete civil works and select spares.

While the gas turbine will be manufactured at BHEL's Hyderabad plant, the HRSG and state of the art control system will be manufactured at its Trichy plant and Electronics Division in Bangalore, respectively.

Indian Railway 2007-08 performance highlights

1. Double digit growth in traffic earnings maintained in first nine months.

2. Growth in passenger earnings 14%.

3. Expected growth in goods earnings 14%.

4. Gross Traffic Revenues 16% higher than the previous year and 2% higher than the Budget Estimates.

5. Operating Ratio likely to improve from the budgeted 79.6% to 76.3%

6. Return on Capital – An all time high of 21%

7. Cash Surplus before dividend expected to be a record INR 25,000 crore

8. Net Revenue expected at INR 18,416 crore and surplus after payment of dividend expected at INR 13,534 crore

Iron ore price negotiations - Vale settles with CSC

Companhia Vale do Rio Doce, the world’s largest iron ore producer, concluded the iron ore fines price negotiations for 2008 with Taiwan China Steel Corporation.

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

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

Steel billet trading commences on the LME

London Metal Exchange announced the commencement of two steel billet futures contracts for Mediterranean and Far East.

London Metal Exchange said that the trading is available initially on the Exchange’s electronic platform, LME Select and on the Telephone market. Open outcry trading via the LME ‘Ring’ will commence on April 28th with the first prompt date on July 28th 2008.

It added that from the soft launch, the Exchange will begin publishing daily evaluated steel prices and open interest volumes for both contracts. From April 28, the full suite of LME market data including official and unofficial prices, open interest and warehouse stocks will be available.

Ms Liz Milan project director of LME steel said that “The purpose of the soft launch is to generate a build-up of liquidity in advance of the full launch in April. It also enables those new to the concept of futures to understand the different types of steel price and contract data that will be published by the Exchange.”

Rio Tinto wants 143% coal price hike - Report

Reuters reported that Australia's Rio Tinto Ltd is seeking to raise its 2008 contract coal price for Japanese utilities by up to 143%, reflecting a global supply pinch showing no signs of easing.

As per report, marketing executives from Rio Tinto's Australian coal unit, who met with Japanese customers in Tokyo last week, have offered coal to utilities, including Chubu Electric Power Co for about AUD 135 a tonne versus AUD 55.65 a tonne last year.

An Australian source familiar with the negotiations said that "The initial indicative price is about AUD 135 a tonne. There is a lot of strength in the market given that so many supply avenues are choked and it doesn't look like the supply valve will be released any time soon."

An industry source in Japan also familiar with the price negotiations said that "The Japanese side may be giving up hopes of settling at prices below AUD 100. Some utilities may also accept AUD 110, although some may think it is high.”

Industry observers said Japanese utilities were taking a wait and see stance until the supply picture from China clears up. A Singapore based trade said that "If China does resume exports in April at five to six million tonnes, then obviously prices will fall.”

Rio's offer comes two weeks after trade journal McCloskey reported that rival Xstrata Plc tabled prices at AUD 125 a tonne. But industry sources said Xstrata's offer, which expired on February 15th 2008 was made before it declared force majeure on coal shipments from its collieries in Queensland state when heavy rains damaged roads and blocked rail lines. The force majeure declaration, impacting two of Xstrata's mines with a combined annual capacity of about 12 million tonnes, exacerbated already tight supplies in Asia.

Utilities there have been reeling from a decision by China to suspend coal exports until April and force majeure declarations issued by five other coal miners in Australia also hurt by the rains.

Gerdau to expand operations in Colombia

Gerdau Group announced that it has signed a USD 59 million purchase and sales agreement to buy 50.9% of the shares of Cleary Holdings Corp a company controlling a metallurgical coke production unit and cokable coal reserves located in Colombia.

The agreement is subject to approval by regulatory agencies in the Colombian market. Coke, which is made from coal, is used as one of the raw materials in the steel making process in integrated mills that operate with blast furnaces.

The unit has an annual installed capacity of 1 million tonnes of metallurgical coke and the reserves, according to preliminary estimates, total 20 million tonnes of coking coal. The entire coke production is mainly exported to the United States, Peru, Canada and Brazil. Approximately 1,300 people work for the company considering employees and service providers.

Mr André Gerdau Johannpeter CEO of Gerdau said that “This investment is part of Gerdau Group’s growth strategy and is another step towards ensuring the supply of fundamental raw materials for steel production.”

US Steel import in January 2008 up by 33% MoM

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the US imported a total of 2.658 million net tons of steel in January 2008 including 2.197 million net tons of finished steel up by 33% MoM and 37% MoM respectively.

Total and finished steel imports on an annualized basis are down by 4% and 1% respectively as compared to 2007. On an annualized basis, total imports of steel in 2008 would be 31.9 million net tons.

Among the products showing large increases in January 2008 against December 3007 were
1. Structural Shapes Heavy up by 152% MoM
2. Reinforcing Bar up by 132% MoM
3. Oil Country Goods up by 109% MoM
4. Hot Dipped Sheets & Strip up by 57% MoM
5. Cold Rolled Sheets up by 31% MoM
6. Hot rolled Bars up by 27% MoM
7. Hot Rolled Sheets up by 24% MoM

For January the largest volume of finished steel imports from offshore were
1. China 272,000 net tons up by 50%MoM
2. South Korea 232,000 net tons up by 260% MoM
3. Japan 121,000 net tons up by 38% MoM
4. India 102,000 net tons up by 88% MoM
5. Germany 86,000 net tons down by 5% MoM

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI also plays a lead role in the development and application of new steels and steelmaking technology. AISI is comprised of 31 member companies, including integrated and electric furnace steelmakers, and 130 associate and affiliate members who are suppliers to or customers of the steel industry.

Linde technology to boosts tube production at ArcelorMittal Shelby

ArcelorMittal Shelby Tubular Products, which is a North American market leader for seamless and welded tubular products for end user applications in markets such as automotive, oil and gas and construction, needed to boost their seamless tube mill output for larger billet dimensions while minimizing energy and maintenance costs and in the second half of 2007, Linde Group converted a rotary hearth furnace for billet reheating on a turnkey basis.

A compressed project timeline from contract signing to commissioning was necessary to meet the objectives and time constraints of their project plan. The formerly air fuel fired furnace was equipped with a REBOX® oxyfuel solution including flameless technology. The conversion was made in two steps first using oxygen-enrichment for a period of time and then implementation of the all flameless oxyfuel operation.

Linde said that “Excellent results have been achieved, fulfilling the performance guarantees, including 25% increased reheating capacity and 50% reduced fuel consumption. Moreover, the temperature uniformity improved, producing better piercing results. The scale formation was reduced by 50%, and the emission levels of NOX and CO2 were significantly minimized.”

REBOX® oxyfuel solutions are employed in over 110 reheating and annealing furnaces. The use of oxyfuel will further improve important parameters such as fuel consumption, throughput capacity and emission levels. Compared to air fuel solutions, oxyfuel can boost production throughput up to 50% as well as reducing fuel consumption and CO2 emission by 50%. The first installation of this kind took place at Timken in the US in 1990.

The Gases Division of The Linde Group is a leading supplier of industrial and medical gases and related services. The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide.

ThyssenKrupp to modernize its Duisburg caster

Siemens Metals Technologies announced that it has received an order from ThyssenKrupp Steel to modernize the continuous caster in the oxygen steelworks at the company's Duisburg-Bruckhausen facility in Germany. The order has a volume of several million euros and modernization of the continuous caster is scheduled for completion in May 2009.

Siemens said that in the course of the project, the caster will be fitted out with new basic and process automation systems, a new control system and new process computers. The integrated automation solution will replace the Simatic S5 based equipment also supplied by Siemens in 1996. The integrated automation solution from Siemens ensures a high degree of availability and easy operator control.

In the Duisburg-Bruckhausen steelworks of ThyssenKrupp, two converters with a heat weight of 380 tonnes are the basic items of equipment used for steel production. The two strand caster of the oxygen steelworks has an annual production capacity of around 3 million tonnes and is therefore among the largest of its kind in the world. After leaving the caster, the slabs with a width of up to 2.6 meters are immediately processed. The close interrelationship of the continuous caster, on the one hand and the upstream and downstream process steps on the other places high demands on the automation and control systems, especially in terms of availability, clarity and ease of operator control.

The Simatic PCS7 control system is the heart of the Siemens automation solution. The equipment-specific user functions will also be integrated here. In addition, the user system will be supplemented with diverse new functions, including DynaWidth for rapid online change of the slab width and DynaFlex for hydraulic mold oscillation. Moreover, the fuzzy-logic mold level control function, which has been used here since 1996, will be implemented on Simatic PCS7.

BlueScope to inject AUD 2 billion into NSW operations

ABC News reported that BlueScope Steel is planning to invest more than AUD 2 billion at its Port Kembla steel making operations in Wollongong in New South Wales over the next three to four years.

As per report Bluescope Steel is to start construction of a co generation plant towards the end of 2008 at a cost of between AUD 700 million and AUD 1 billion. It added that relining the blast furnace at the steelworks is due to start in March next year at a cost of AUD 370 million.

Mr Paul O'Malley CEO of Bluescope said tht the company is absolutely committed to the Illawarra as part of its core business, but cannot always source the resources it needs from the local economy. He said that "So we have to look more broadly to bring in the skills and capabilities, but in terms of how we best go about that Noel Cornish and his team there are focused on that. We have hundreds of people working on these projects and I'm sure they will ensure that we use as much capability from the local area as possible."

MEPS forecasts substantial steel price hikes in EU

UK based MEPS said that EU mills are benefiting from a lack of competitive third country imports as low inventories at distributors need to be replenished and customers are accepting that prices must go up as producers try to recover higher input costs.

MEPS added that “ArcelorMittal has announced a 12% to 15% hike for April deliveries. First quarter order books filled up quickly as buyers placed business ahead of the anticipated price rises. Although a small number of deals have been done at higher prices, it is too early for period two settlements to be finalized. Consequently, the figures in our flat products price tables are indicative of those agreed for late first quarter orders.”

MEPS said that “Business levels in Germany are acceptable. Customers are faced with price hikes in the second trimester but it will be early March before serious discussions begin. A number of buyers believe that the mills' demands are too much and that EUR 40 to EUR 50 per tonne would be a more realistic target, with perhaps a further EUR 30 per tonne in the third quarter. Stocks at the service centers are back to normal levels now and some distributors have tried to build inventories ahead of any price advances. There are no attractive third country quotations. Chinese and Indian producers have stopped offering and Russian prices are too high.”

MEPS added that “Values are moving up in the French market as buyers express concern at the magnitude of the proposed rises. Should the situation reverse quite soon, distributors could be in trouble. Negotiations for April are not yet completed but certainly first quarter prices are no longer valid as the mills have closed their books. The figures in our table refer to the last period one deal that took place. Buyers are expecting to pay EUR 70 to EUR 80 per tonne more. The large quantities of strip products held by service centers and end users were adjusted by the end of 2007 and stocks are now close to normal levels, so customers are forced to return to the market.”

MEPS said that “The threat from Chinese imports has lessened considerably in Italy, partly due to logistic difficulties at Chinese ports and also because of the changes to export duties. In addition, maintenance closures at Italian domestic mills have also served to tighten supply. This limited availability, together with low inventories and escalating raw material costs, has enabled local producers to push through some significant increases during recent price settlements. They will be seeking further rises in the coming months, despite relatively slow demand at present.”

MEPS also said that “In the UK, Corus expects to lift second quarter strip product prices by £80/106 per tonne, depending on specification. The company said that more hikes cannot be ruled out. Although met with disbelief by some customers, the proposed values will still be attractive compared to current International figures. Real demand is not strong and there are indications of weakening end user order books going forward, due to current difficulties in financial markets. However, the inventories that built up in the latter half of 2007 have now worked their way through the system. Consequently, distributors have started purchasing again.”

MEPS said that “Belgian customers are anticipating sharp increases as raw material expenditure soars. There is no negative pressure whatsoever from non-EU imports. The home market is strong. Inventories at service centers and end users are low and restocking continues. Demand is still good. Distributors are recouping any mill rises from their customers.”

MEPS added that “The Spanish market is quiet. Demand is slowing down because the economy is performing less well. Sales to the construction sector have fallen back dramatically. In general, service centers do not have a lot of orders but their stocks were back to normal by the turn of the year and now some gaps are appearing for certain sizes and specifications. Although the target prices proposed for period two by European suppliers are still substantially below International market levels, some buyers still feel the full amount will be difficult for the mills to implement.”

Zinifex H1 of 2008 profit up by 74% YoY

Zinifex Limited announced that it delivered a record half year profit of AUD 1,309.7 million for the period ended December 31st 2007, up by 74% YoY.

Mr Andrew Michelmore CEO of Zinifex said that this result was driven by the substantial proceeds raised from the sale of Zinifex's smelting assets which contributed AUD 960.6 million to net profit and AUD 1,785 million of cash. He added that "Over the half, Zinifex successfully completed its transformation to a dedicated mining business. This has not only re focused the strategy of the organization but resulted in a significant cash injection into the company.

Mr Michelmore said that "Zinifex's ongoing business, the Century and Rosebery mines together with our exploration and development activities, contributed a profit of AUD 281.2 million down some 43% YoY. As a result, cash held increased six fold to more than AUD 2.2 billion at December 31st 2007. Production performance at both the Century and Rosebery mines was excellent with zinc output up by 8% YoY and lead output up 12% YoY resulting in stronger sales volumes.

He added that "This was largely the result of a combination of significantly lower zinc prices and a stronger Australian dollar against the US currency. While zinc stocks remain at historically low levels, zinc prices have fallen on market expectations of more zinc supply in 2008 and 2009 shifting the zinc market from a deficit to a surplus position.”

Mr Michelmore said that "The majority of this increased expenditure was directly related to the increased production and our growth ambitions with exploration and development spending rising three-fold to AUD 36.7 million. However, like the rest of the resources industry, over the half year we experienced increased costs with freight rates in particular rising.”

Ovako awards rotary hearth furnace contract to Linde

Ovako Hofors Works of Sweden announced that it has awarded The Linde Group the contract for a new rotary hearth furnace for reheating of semis. The furnace will be equipped with a REBOX® flameless oxyfuel system. This will be the third such oxyfuel fired furnace in Hofors.

The release said that the first installation of oxyfuel in a reheat furnace at Ovako was made by Linde 13 years ago. Since then the majority of the furnaces in Hofors have been converted into all oxyfuel operations. In general, this has resulted in 35% increased heating capacity and 35% less fuel consumption. REBOX® flameless oxyfuel operation additionally leads to low NOX emission and high temperature uniformity.

The new rotary hearth furnace will play an important part in Ovako’s production of materials for the growing wind mill market. The Gases Division of The Linde Group will deliver a turnkey installation project including guaranteed capacity, emission levels and quality. Commissioning is scheduled for February 2009.

Ovako is a leading European, long special steel products company. It annually supplies 2 million tonnes of low alloy and carbon steel to the rolling bearing, heavy vehicle, automotive and engineering industries.

The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide. Following the acquisition of The BOC Group plc, the company has gases and engineering sales of approximately EUR 12 billion per annum.

Production back to normal at Rautaruukki’s Raahe Works

Rautaruukki’s Raahe Works in Finland announced that workers returned to work on Saturday February 23rd 2008 and the production was back to normal during the weekend and it is expected other operations will normalize during the course.

Rautaruukki says the unlawful strike that started on February 21st stopped hot rolling at the works until Saturday morning. Steel production ran at half capacity during the strike. But despite the strike, all functions essential to the personnel, processes and environmental safety were maintained.

The action was contrary to valid collective bargaining agreement. On February20th 2008, the Labor Court judged the trade union branch’s threat to call a strike on February 21st 2008 as unlawful and ordered the branch to pay the Federation of Finnish Technology Industries compensatory damages for breaking the commitment to industrial peace.

Separate information will be provided about the financial effects of the strike on the company once these become known.

South Korean coal imports in January up by 9% YoY

According to latest customs statistics show, South Korean coal imports in January were up 9% YoY to 7.6 million tonnes.

As per the statistics imports from both China and Indonesia have declined to 1.7 million tonnes and 2.1 million tonnes t respectively. It added that Australia was South Korea’s leading coal supplier with 2.7 million tonnes.

Brumby secures 6 extra Pilbara iron ore tenements

West Perth based gold and base metals explorer, Brumby Resources Ltd announced that it has expanded its portfolio of Pilbara iron ore tenements with the acquisition of six Yule River tenements from Resource and Investment NL. The tenements, located about 40 kilometers south west of Port Hedland, will increase Brumby's total Yule River Project land holdings to over 1,300 square kilometers and total Pilbara land holdings to over 3,600 square kilometers.

Under the terms of the acquisition, Brumby will obtain the rights to all minerals produced from the tenements in consideration to RNI of a 1% Net Smelter Royalty (NSR) on future production. An NSR of 0.5% is also payable to the original vendor of tenement E45/2939. Brumby will manage the tenements and be responsible for meeting all expenditure commitments and costs.

Brumby said early field work will focus on exploring for iron ore deposits similar to the +100 million tonne Balla Balla iron ore deposit located 50km to the west of the holding.

Mr Geoff Jones MD of Brumby said that "We are delighted to be able to further consolidate our Pilbara ground holding via this large acquisition of land and we intend to start exploring the tenements during the course of 2008 following the granting of statutory approvals. We believe that this acquisition, in conjunction with our recent purchase of the Goldsworthy iron ore rights and Pardoo East iron ore targets, enables Brumby to pursue a very active exploration program in the upcoming field season on a range of tenements highly conducive to iron ore and just as importantly, close to quality transport and infrastructure."

Villares Metals eyes 92,000 tonnes finished products in 2008

BNamericas reported that Brazilian specialty steel producer Villares Metals expects finished products output of roughly 92,000 tonnes in 2008 as compared to 85,000 tonnes in 2007.

Mr Franz Struzl president of Villares told reporters that "We have been increasing our volumes every year since 2004, when Austrian specialty and tool steel and materials group Böhler Uddeholm purchased Villares Metals from Brazilian specialty producer Aços Villares.

He added that Villares Metals churned out some 68,000 tonnes of finished products in 2004, around 75,000 tonnes in 2005 and roughly 79,000 tonnes in 2006. The company's main consuming sectors in 2007 include the automobile segment in addition to the oil and petrochemical industries.

Mr Struzl said that shipments abroad were worth USD 199 million in 2007, up by 37% YoY compared to the previous year. "Despite a positive market development we are concerned with the exchange rate."

Mr Herwig Petschenig commercial director of Villares Metals said that "We always give priority to the domestic market and in 2008, we will target a similar equation in our sales volume of 60% to the local market and 40% for exports."

In terms of physical sales, 60% of shipments carried out by Villares Metals in 2007 focused on the domestic market and the balance was shipped to other countries.

Japanese silicomanganese and ferrosilicon prices up

YIEH reported that Japanese electric furnaces in the Kanto region settled price negotiation of silicon manganese and ferrosilicon.

As per report silicon manganese price increased by JPY 35,000 per tonne than February, reaching JPY 225,000 per tonne and ferrosilicon price raised by JPY 15,000 per tonne to JPY 132,000 per tonne from the previous month.

The report further added that on the other hand, Japanese steel enterprises will begin to negotiate ferroalloy prices for April to June 2008 in the beginning of March. According to a trader, silicon manganese price may hit JPY 240,000 to JPY 250,000 per tonne.

Congo bans tin mining in Walikale district of North Kivu

Reuters reported that the Democratic Republic of Congo has banned tin mining in the Walikale district of North Kivu, the largest tin producing region of the country.

Mr Martin Kabwelulu mines minister of Congo told reporters that in the provincial capital Goma that all mining in the district was to be halted because of lack of security. He said that at least 80 soldiers have died in the region, which accounts for more than half of the country's output. But he didn't specify the period in which the deaths occurred.

According to mining authorities, the Walikale district produces most of North Kivu's cassiterite, as well as smaller amounts of diamonds and gold. North and South Kivu exported a total of 7,000 tonnes of cassiterite in 2006, although industry experts estimate the real figure was closer to 12,000 tonnes, because a large amount of exports were undeclared.

Nyrstar considers buying zinc mine and other smelter

Reuters reported that Belgium based Nyrstar would consider expanding into mining or buying other zinc smelters, amid rampant consolidation in metals industries.

Mr Paul Fowle CEO of Nyrstar at the annual American Zinc Association conference told Reuters that "I don't think we need to have it, but we're not averse to having it if we had a merger opportunity that included getting into some mining. We are looking at a variety of things. It's still early days."

Mr Fowler said Nyrstar was also looking at acquiring other zinc smelters, but was less likely to diversify into other metals. He added that "The only other metal that is similar to ours in terms of how it's mined and processed is copper. Right now, with what's going on between BHP and Rio, if that merger goes through, the copper business is going to be just about wrapped up."

Belgium based Nyrstar began on September 1 as a joint venture combining zinc smelting assets of Belgium's Umicore and Australia's Zinifex.

Feng Hsin raises rebar and steel prices by TWD 1,000 per tonne

The China Post reported that Taiwan’s Feng Hsin Iron and Steel, a major steel supplier, has raised wholesale prices of rebars and steel sections both by TWD 1,000 per tonne due to increased cost.

As per report with the price hike, the company's rebars and steel sections are sold at TWD 26,700 and TWD 27,400 per tonne. The price increase came after international iron ore operators raised prices by some 65%.

According to industry experts, Feng Hsin has been known to offer a discount of TWD 500 a tonne. But with the supply of rebars running short, that discount may be slashed to less than TWD 300.

US weekly crude steel production down by 1.5% YoY

American Iron & Steel Industries reported that in the week ending February23rd 2008, US’s raw steel production was 2.158 million net tons while the capability utilization rate was 90.5%. Production was 2.126 million net tons in the week ending February 23rd 2007, while the capability utilization then was 89.5%. The current week production represents 1.5%decrease from the same period in 2007.

Production for the week ending February 23rd 2008 is up by 0.6% from the previous week ending February 16th 2008 when production was 2.144 million net tons and the rate of capability utilization was 89.9%.

Adjusted YTD production through February 23rd 2008 was 16.816 million net tons at a capability utilization rate of 87.9%. That is a 6.6% increase from the 15.763 million net tons during the same period last year, when the capability utilization rate was 87%.

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

Taiwanese black tube mills increase export prices

YIEH reported that Taiwan’s carbon steel mills are expected to raise its prices sharply in March 2008 due to prices of iron ore increase sharply.

As per report Taiwan’s black steel pipe mills are adjusting prices in advance in order to offset the high raw material cost. The increase in price is USD 100 to USD 130 per tonne.

However, although the price of material raises sharply, the downstream customers still accept it and the orders are almost fully booked by black steel pipes till end of June.

Straits Asia net profit in 2007 down by 40.7% YoY

Straits Asia Resources, the Indonesian coal mining subsidiary of Australia's Straits Resources, said that its net profit fell by 40.7% YoY to USD 28.6 million in 2007 as production volumes in the second and third quarter of the year dwindled due to adverse weather conditions.

Straits Asia said that its sales fell by 10% YoY to USD 251 million as coal production volumes dropped to 3.38 million tonnes in 2007 from 3.5 million tonnes in 2006. It added that but as weather conditions improved, coal production rebounded to 1.21 million tonnes in the fourth quarter from 995,000 tonnes a year ago.

Mr Richard Ong CEO of Straits Asia said that "I am pleased to say that 2008 has started very well. The weather has been favorable at both Sebuku and Jembayan mines. In any event, Sebuku's much increased pumping capacity means we should be able to withstand even the worst weather that we faced in 2007.

He added that Sebuku's mining capacity has been upgraded to 387 million tonnes from 103 million tonnes, Singapore-listed Straits Asia said. The newly acquired Jembayan mine is also expected to boost the group's production capacity in 2008.

Outotec to modernize KGHM's copper smelter in Poland

Outotec announced that it has agreed with KGHM Polska Miedz SA on the modernization of KGHM's HM Glogow II copper flash smelting furnace in Poland. The value of the contract is over EUR 10 million.

Outotec's scope of delivery covers the engineering, supply of proprietary equipment for concentrate feeding and auxiliary burners, a waste heat boiler, automation as well as commissioning and other related services.

KGHM Polska Miedz is using Outotec's Direct Blister Flash Smelting technology in its copper smelters in Poland. The company is now intensifying its smelter operations and increasing its annual production capacity to 230,000 tonnes of copper. The modernized plant is scheduled to be commissioned in August 2009.

PT TBBA to borrows USD 180 million for power plant

Reuters reported that a unit of Indonesian coal miner PT Tambang Batubara Bukit Asam Tbk would borrow IDR 1.64 trillion (USD 180 million) in bank loans to build a 200 MW coal fired power plant in south Sumatra.

The subsidiary, PT Bukit Pembangkit Innovative in a statement said that the Banjarsari power plant would boost electricity supply in South Sumatra.

Parts of Java, Indonesia's most crowded island, and the resort island of Bali were plunged into darkness last week as bad weather hampered coal deliveries to power plants.

Indonesia's power sector has been beset by problems because of ageing plants, high costs and low funds as tariffs are highly subsidized and still among the lowest in the world.

Adriana update on Lac Otelnuk drill program

Adriana Resources Inc announced preliminary assay results on 16 of its 26 hole 2007 diamond drilling program at its Lac Otelnuk Iron Project in the Labrador Trough of Quebec in Canada.

Results from the first 16 holes has confirmed the presence of magnetite iron in the upper, middle and lower iron formation units, thereby significantly increasing the potential for a much larger deposit than previous drilling indicated.

Drilling completed in the 1970s, 36 holes totaling 1,656 meters was primarily limited to the upper iron formation unit 15 to 38 meters thick of the North Zone of the deposit and mainly tested only one of three contiguous cherty banded magnetite units. Drilling in 2007 was designed to test all three stratigraphic units of the South Zone of the deposit known to extend over a strike length of 9,000 meters.

The drilling program is the first phase of a proposed 70 drill hole program, intended to define a multi billion tonne inferred mineral resource.

Brazilian iron ore export in 11 months of 2007 surge by 9.9% YoY

According to related statistics, Brazil exported about 246.5 million tonnes of iron ore during the first 11 months of 2007, an increase of 22.295 million tonnes or 9.9% YoY.

Among them, China ranked the first biggest export country with 96.622 million tonnes, Japan ranked the second with 28.748 million tonnes. Germany was the third with 22.422 million tonnes.

The export in whole 2007 is estimated to be 270 million tonnes.

Macarthur Minerals secures deposit from LDP Holding

Macarthur Minerals Limited announced that LPD Holdings Pty Ltd had released a CAD 1 million non refundable deposit to it as part of a CAD 110 million deal to develop the Lake Giles magnetite iron ore and base metals project in the prospective Yilgarn region of Western Australia.

Mr David Barwick chairman & CEO of Macarthur said that the payment represented a significant milestone for the Lake Giles project and that Macarthur Minerals had now satisfied all pre conditions of the Heads of Agreement with LPD Holdings. Macarthur Minerals will apply 85% of the CAD 1 million deposit together with CAD 2.8 million raised from a recent Private Placement, to expand the company's current RC drilling and exploration program.

Mr Barwick added that “By the end of February the Company will have competed 90 holes at the Lake Giles project for 14,500m of RC drilling. Beyond this, Macarthur Minerals intends to proceed immediately to Stage 5 of our drilling program which will involve targeting a large untested area, known as Sandlewood, where 27 new drill sites have been prepared. After two years of exploration effort, approximately 10% of the project's 1155 square kilometer area has been explored and we're excited by the potential to add to the resource that has already been identified."

An additional eight an camp has been established to enable the Company to bring in a contract exploration specialist to conduct a ground magnetic survey and a second specialist to undertake a geological mapping program. The objective of this detailed work program is to identify additional drill targets. It added that the Company has commissioned Hellman and Schofield to prepare a second resource estimate using data from the current Stage 4 drilling program.

Japan purchases of scrap in November up by 4.9% YoY

According to Japan's Ministry of Economy, Trade & Industry, Japan purchased some 2.975 million tonnes of scrap in November 2007 up by 4.9 YoY.

Among them, common carbon scrap steel was 2.806 million tonnes up by 5.5 YoY; alloy scrap steel was 102,000 tonnes down by 9.7% YoY; pig iron scrap steel totaled 67,000 tonnes up by 8.1% YoY.

UAE steel prices continue to climb

Reuters reported that reinforcing steel bar prices in the UAE have risen in the past couple of months on strong domestic demand and a pick up in international billet prices. A tonne of rebar fetched around USD 830 in January 2008 and was around USD 860 last week.

The report cited a local trader as saying that "Billet prices continued to rise in February 2008 and consequently rebar prices went up. In some places in the country, prices were as high as USD 880 a tonne."

Gulf Extrusions opens office in Saudi Arabia

Gulf Extrusions, one of the largest aluminum extrusion plants in the Gulf, has announced the opening of a full fledged sales office in Dammam to capitalize on the Kingdom's major construction boom. The opening of the new office in KSA is in line with Gulf Extrusions' strategic expansion plan in the region, and will enable the company to consolidate its presence in the regional market.

The Saudi office will also allow Gulf Extrusions to provide an enhanced level of services to their existing clients in the Kingdom, while providing a greater opportunity to the company to attract new clients, at a time when the consumption of extruded aluminum in Saudi is more than the production.

Recent market figures reveal that Saudi Arabia has an estimated USD 200 billion worth of active projects under construction, keeping pace with the growing demand for residential, commercial and industrial projects from regional and international investors.

In 2007, the demand for aluminum extrusion in Saudi was 140,000 tonnes, while the production stood at 136,000 tonnes. Moreover, the demand for aluminum extrusion in the Middle East region as a whole is expected to reach an average of 450,000 metric tons in 2008, with KSA, Qatar, UAE and Kuwait accounting for most of the demand.

Mr Modar Al Mekdad GM of Gulf Extrusions said that "Saudi Arabia represents one of the most important markets in the region for Gulf Extrusions, with unprecedented real estate and construction activity taking place across the Kingdom. We are pleased to open an office in Saudi, which is a move that fully complements our market consolidation strategy in the country and the region as a whole."

Gulf Extrusions recently increased its production line by 40% as it moves ahead with its expansion program to accommodate the region's growing demand for aluminum extrusion products. It achieved more than a 30% increase in output capacity in 2007. Gulf Extrusions produces over 14,000 profiles, ranging from architectural sections to components for household items, AC grills and customized products. It also extrudes products of several European suppliers and companies under agreement.

Pakistan government to asks firms to start drilling coal

Daily Times reported that Pakistan’s government will ask foreign and domestic coal based power generating companies to start its drilling and exploration works in their respective allotted areas.

Sources in the Sindh Mines and Mineral Department told Daily Times that the notification orders would be sent very soon to all those companies that have signed MoU with Sindh Coal Authority and Sindh Mines and Mineral Department and have not started any exploration or drilling so far. Out of seven companies only two have started drilling work in their respective areas.

The source added that China National Machinery Import and Export Corporation has conducted its operations at Sonda-Jherruk, Thatta and proposed 10 cents per unit to generate electricity whereas Oracle Coal Field has commenced drilling for 150 MW, the first borehole of a seven hole program on Block VI of the Thar Coalfield.

Besides, AES Oasis Limited has signed MoU for establishment of 1,000 MW coal fired power plant at Thar. Ukrinterenergo of Ukraine has also inked MoU for Coal Washing Plant of 1 million tonnes coal annually. Dadabhoy signed for establishment of 200 MW coal fired power plant at Sonda Jherruck in district Thatta.

It further added that Soneri Energy Limited is in process of assessment of the Coal Bed Methane, coal and physically associated substances and coal by products. MoU signed by Associated Group for 500 MW Thar Block-IV. Al Abbas Group has also inked MoU with Sindh Government.

The Shenhua Group of China has signed an MOU with the Sindh Government to carry out detailed geological and hydro geological investigation to study the feasibility of setting up 1,000 MW coal fired mine mouth power plant based on Thar coal. The group, however, left the country after the disagreements with concern ministries but it is reported that ministry is trying to call back this group.

DP World holds trade meet in Bangalore

BS reported that the container terminal operator DP World and Cochin Port Trust have jointly organized an interactive session with the Bangalore EXIM trade to address the issues and concerns of the trade while shipping through Kochi.

Mr Elvis D’Cruz commercial manager of DP World, emphasized the importance of the EXIM business in Bangalore for the growth of Kochi Port. The meet was attended by over 100 members comprising exporters, importers, shipping lines, buying houses, and freight forwarders.

Mr Suresh Joseph GM of DP World gave a brief presentation on the developments that had taken place at the terminal, including the introduction of two rail services per week connecting Bangalore to Kochi, facilitation of transhipment using Kochi as a hub and the introduction of various customer friendly initiatives such as the IVRS, SMS and customer support system.

Mr Vipin Menoth traffic manager in charge of the port also spoke about the current portfolio and the future developments that were expected to transpire at the port.

Mr John Prasad chief GM of Concor has assured his support to the Bangalore trade, and also mentioned that the company would look at the opportunities of running more trains to Kochi depending on the trade’s requirement.

Multiforms wins AED 250 million cladding contract

Emaar Industries & Investments’ subsidiary Multiforms has won an AED 250 million contract from Saudi Oger, the primary construction contractor of the King Abdullah University of Science & Technology campus.

Under the contract, Multiforms will undertake stonewall cladding for six buildings and install curtain walls, louvers, titanium, cladding and doors to four main buildings. The external cladding will be completed within a year of commencement of work. The Multiforms cladding is expected to be a valuable addition to the developers' aim of having a minimal environmental footprint, without compromising on the aesthetic value.

Dr Ahmad Khayyat CEO of Emaar Industries said that "Following our partnership with Multiforms, the company is fast consolidating its reputation in undertaking challenging cladding works and has built a strong geographic footprint in the region and abroad. The work on KAUST further highlights the project execution skills of Multiforms."

Mr Firas Al Rifai CEO of Multiforms said that "We are extremely pleased to be part of this development that will set the standard of educational institutions in the region. Our design team will diligently oversee the details of the project to ensure that it is on par with highest international standards. It is an honor to have been chosen to play a direct role in enhancing the aesthetic value of this prestigious educational institution."

Multiforms is involved in the manufacturing, supplying and installation of a wide range of advanced architectural materials including an array of aluminum cladding, curtain walling, windows and doors. It has contracts secured for an array of projects in the UAE, the GCC region and Europe.

RAK to receive gas from Oman and UAQ

The emirate of Ras Al Khaimah is spending about USD 100 million to meet domestic gas demand by importing additional supply from cross border neighbor Oman and next door emirate Umm Al Quwain. Ras Al Khaimah needs 250 to 350 million standard cubic feet of gas daily to fuel its power intensive industry.

Umm Al Quwain is expected to transport 80 million standard cubic feet by 2008 after a 72 kilometer long pipeline was constructed to link the neighboring emirates, while Oman’s West Bukha field is expected to pipe 40 million standard cubic feet by April 2008.

Mr Ruurd Abma COO at RAK Gas Commission said that “We are currently investing more than AED 360 million in the infrastructural needs of the gas sector to meet the increasing industrial needs in the emirate, which is currently witnessing a boom.” He added that the investment will be used to build a network of pipelines as it expects gas to flow from Oman’s West Bukha offshore fields and to pipe gas from Umm Al Quwain’s gas fields. We in Ras Al Khaimah want to get more gas and how do we get it. Another thing is we want to increase security, supply and security is also an important issue here.”

Mr Abma also hinted that RAK is interested of additional supply from Iran. RAK hopes to extend the pipeline to receive gas from Iran’s Hengam, a joint field, which is known as West Bukha in Oman. He added that “It would be the easiest thing to drill on the Iranian side and pipe the gas through to Ras al Khaimah. Talks are still at a preliminary stage. There are political considerations and the terms of oil and gas deals with Iran aren’t so attractive.”

RAK’s gas demand is estimated at 300 million to 350 million cubic feet a day as it tries to sustain its industries, particularly the cement production companies, which is the emirate’s important energy consumer. It exercises flexibility by resorting to diesel fuel, heavy fuel or coal when gas supply is not enough.

Egypt starts gas exports to Israel

An official source said that Egypt has started exporting gas to Israel in accordance with a 2005 deal. The source added that "Egyptian gas has been flowing to Israel since last week but it has not yet been integrated into the Israeli network for procedural reasons and the pipeline would be fully integrated in a few days."

The new underwater pipeline runs 100 kilometers from the Egyptian Mediterranean city of El Arish to the Israeli port of Ashkelon, supplying gas pumped from a gas field in the north of the Sinai peninsula.

The Egyptian side has remained virtually silent on its progress since a MoU was signed in 2005. The MoA provided for the export by an Egyptian Israeli consortium, East Mediterranean Gas, of 1.7 billion cubic meters of gas a year over 15 years for a total of USD 2.5 billion.

Another gas supply contract was signed in 2006 between Israel's Dorad Energy and EMG, worth two billion dollars over 15 to 20 years. Dorad is due to complete Israel's first private power generator in Ashkelon by the end of 2009.

According to the oil ministry, Egypt's national gas production in 2007 was 62 billion cubic meters, of which 28.8% was exported.

Abu Dhabi to build new oil refinery

Mr Jassem Al Sayegh head of Abu Dhabi National Oil Company’s refining arm Takreer said that it will build a new oil refinery to boost its output capacity by 417,000 barrels per day.

Mr Sayegh said that the new refinery will be built in Ruwais, where it produces 400,000 barrels per day. He added that the project is still in the planning phase and would be completed in 2013.

Abu Dhabi’s refining capacity should increase to 885,000 barrels per day when the new plant enters service.

Baosteel's Q2 steel price hike above expectation

Oriental Morning Post reported that Baosteel steel price policy for the second quarter for billet & slab, wire rod, HRC, HRC raise by as much as 10% on average is far above the market's expectations.

Mr Yang Baofeng and analyst with Orient Securities said weighted average price of Baosteel's common steel products rises CNY 739 per tonne based on sales volume and price hike for each variety. He said it is the biggest hike ever. Mr Yang said the new prices are relative to the Q1 levels, which are below the spot market, indicating a compensation factor in the pricing move, while primary reason for the hike is substantially escalating costs.

The report said the unexpectedly high price hike is believed a manifestation of Baosteel's sound outlook over the spot steel price in the second quarter.

According to Baosteel notice, its billet &slab and wire rod gain CNY 600 per tonne, HRC gains CNY 500 per tonne to CNY 800 per tonne and common CRC CNY 800 per tonne in the new policy, while HDG is the variety posting highest price gain of CNY 1000 per tonne.

Shortly after the 65% benchmark ore price hike was settled, over 100 steel plants in China pushed up their ex works prices by 5% to 10% to offset the additional costs.

CISA urges mills to invest in overseas iron and coal mines

Reuters reported that the China Iron and Steel Association has urged its members to invest directly in overseas resources as a hike in iron ore prices and constrained coking coal supplies threaten their bottom line.

Mr Zhang Xiaogang secretary general of CISA said in a statement that "Chinese steelmakers should widen overseas cooperation, strengthen overseas mining investment and build up a secure, long-term base in iron ore and coking coal through controlling or joint stakes. He said price increases in iron ore, coking coal, coke and crude oil will keep domestic and international steel prices high.”

Chinese steel makers recently agreed with Brazilian miner Vale to pay 65% or 71% more for iron ore for the fiscal year beginning in April 2008. They are facing a potentially more serious crunch in coking coal supplies after China prioritized thermal coal supplies to power plants while weather impeded coal shipments from overseas.

New chairmen’s of Jigang, Laiwu and Shandong Steel appointed

It is reported that Shandong provincial government has appointed Mr Wangjun as the new chairman of Jigang and Mr Song Lanxiang as the new governor of Laiwu Steel. Meanwhile, Mr Zou Zhongchen would become the chairman of proposed Shandong Steel Group.

The move will pave the way for the desired merger between Shandong based Jigang and Laiwu Steel. The parents of Laiwu Steel Corp and Jinan Iron and Steel Co were ordered to merge into Shandong Iron and Steel Group, as part of a provincial plan to consolidate mills, shut older facilities and build a new 20 million tonne pr year Greenfield mill on China's eastern coast.
The Shandong government first proposed the plan in 2006 but has made slow progress due to various reasons. Chairmen of both groups stalled until their recent retirement.

According to data from China Iron & Steel Association Jigang has ranked as China's No 8 steelmaker with output of 10.83 million tonnes last year and Laiwu as the ninth with production of 10.79 million tonnes. Therefore, Shandong Steel Group would boast steel output of over 20 million tonnes vaulting into the first three biggest steelmaker in China after the merger.

Anshan to launch operations at a steel plant in Liaoning

XFN-Asia reported that Anshan Iron and Steel Group, parent of Angang Steel Company Limited, is expected to launch operations at a steel plant in northeastern China's Liaoning province in the second half of this year.

The report said the first phase of the plant, located near Yingkou port along Bohai Bay will cost around CNY 30 billion. It said the plant has an annual steel products capacity of 6.5 million tonnes including 2 million tonnes of thick steel plates and 4.5 million tonnes of hot rolled plates.

It added that the products will be used on ships and automobiles as well as home appliances.

Sinosteel plans share sale to fund asset buys

It is reported that Sinosteel Corp is likely to sell yuan backed shares in Shanghai in the third quarter of 2008 to raise about CNY 12 billion. According to people briefed on the matter, Sinosteel has picked underwriters including BOC International, JPMorgan Chase & Co and UBS AG for its proposed listings in Shanghai and Hong Kong.

The industry sources said the Hong Kong issuance of Sinosteel may come right after its mainland listing, while the amount to be raised is expected to be settled based on market conditions then.

A local investment banking source said "Sinosteel has long been eying a public stock sale and is determined to realize the goal by the end of this year. The dual listings will not only help it raise funds for expansion but also boost its profile for overseas acquisitions."

Another securities source familiar with the matter said "The proceeds of the stock sales will be used to foster its acquisitions of overseas metal resources in the coming two years. There's no doubt the company will rev up its business abroad after the listings."

Officials at Sinosteel were not available for comment yesterday.

Sinosteel has been pursuing overseas resources assets in the past few years by investing in a slew of metal exploration projects in such countries as Australia, Indonesia and Zimbabwe.

Baoshan orders continuous annealing and pickling line

Baoshan Iron & Steel Company Limited has placed an order with SMS Demag for the supply of a continuous annealing line and a continuous pickling line for hot and cold strip as well as a 20 roll cold mill. These facilities will process strips made of special grades such as nickel and titanium based alloys and special stainless steels. They will go into operation in Shanghai in early 2010.

In view of the demanding, high performance materials, a flexible plant configuration was chosen for the annealing and pickling lines. The usual coupled arrangement of annealing and pickling was dispensed with. Instead, separate annealing and pickling lines were installed which can process cold and hot strip. Each of the two lines is designed for an annual production of around 160,000 tonnes.

The 20 roll cold mill rolls the annealed and pickled strips down from their maximum entry gages of 7.1 mm to minimum final gages of 0.3 mm. The strip widths are in the range of 600 to 1,300 mm.

The strips produced on the lines are used in the manufacture of tubes and pipes, boilers and pressure vessels and in shipbuilding, mechanical engineering, steel building construction and bridge-building. The steel produced satisfies the stringent requirements relating to anticorrosion and anti-wear properties.

As part of the firm’s extension of production capacities for special and stainless steel grades, BSSB ordered a Steckel rolling mill from SMS Demag in summer 2007.

Chinese province wise iron ore production in 2007

China produced 707.073 million tonnes of iron ore in 2007 up by 18.0%YoY as compared to 599.215 million tonnes in 2006.

Hebei took the first spot with 309.540 million tonnes accounting for 43.8% of China’s total coke production. Top 5 provinces accounted for 78% share.

Province wise detail is as under

In million tonnes

(Sourced from MySteel.net)

Baogang steel production in 2007 up by 18%YoY

Asia Pulse reported that Baogang Group a major steel maker in north China's Inner Mongolia Autonomous Region produced 8.838 million tonnes of steel in 2007 up by 18%YoY.

Its output of iron reached 8.98 million tonnes up by 22%YoY, steel output reached 8.83 million tonnes up by 18%YoY and billet materials reached 9.26 million tonnes up by 18%YoY respectively. Sales revenue jumped 20.12% to a record CNY 3.2849 billion in 2007.

Chongqing Steel raises rebar prices

It is reported that Chongqing Steel further raised its latest EXW prices for rebar products on the basis of prices published on February 23rd 2008:

Rebar price up by CNY 50 per tonne.
HRB335 14mm rebar is now priced at CNY 5050 per tonne
HRB335 12mm rebar is now priced at CNY 5150 per tonne
HRB335 16mm to 25mm rebar is now priced at CNY 4950 per tonne
HRB335 28mm rebar is now priced at CNY 5000 per tonne
HRB335 32mm rebar is now priced at CNY 5050 per tonne

Wire Rod prices remain unchanged.
Latest price stands at CNY 4950 per tonne for Q235 6.5mm high speed wire rod and CNY 4940 per tonne for 8mm and 10mm Q235 high speed wire rod.

Prices listed above are inclusive of 17% VAT effective as of February 25th 2008.

(Sourced from MySteel.net)

Chinese engineering machinery products price to go up

It is reported that the general production cost in engineering machinery industry in China will be raised due to the price soar of iron ore and steel products.

An insider from Xiamen Xiagong Group Company Limited said “Major products in the industry have raised price since January”.

He also said that the scope of price rise was small at present, but price rise would have possibilities in later time.

White goods prices in China expected to rise

China Knowledge reported that China's white goods manufacturers are likely to raise product prices, due to the rising raw material costs.

A leading domestic white goods manufacturer, Haier said that the price rise resulted from the rapid cost increase in human resources and raw materials such as steel. For instance, prices of major types of steel have increased by CNY 400 to CNY 500 per tonne in the country from February 13th 2008 to February 21st 2008. Besides, the oil price increase has also helped push up the transportation costs.

Haier has initiated the price increase by 5% to 10% on goods, mainly washing machines and refrigerators, followed by other domestic white goods manufacturers. However, Mr Liu Jun a market observer with Donghai Securities said that the general price rises would be no higher than 5%.

Meanwhile, the foreign brand Siemens has put up all its home appliances prices by 3% to 5% from January 4th 2008. As such, others manufacturers such as Panasonic, LG and Bosch are all on a move to raise prices.

China to establish worlds biggest coal port group

It is reported that Hebei province will establish three modern comprehensive ports of Qinghuangdao port, Tangshan port and Huangye port and complete world biggest coal transport port groups on the basis of Qinghuangdao port and Huangye port.

In next three years, Hebei will invest huge fund in construction of ports, handling capacity is likely to top 592 million tonnes and container capacity will reach 1.2 million TEU.

China Precision awarded High Tech Enterprise certification

China Precision Steel has announced that it was awarded the "High-Tech Enterprise" certification by the Science and Technology Commission of Shanghai Municipality in December 2007.

Dr Wo Hing Li chairman & CEO of China Precision Steel's said "We are pleased to receive this prestigious certification, which indicates our products and services meet the high standards set by the Science and Technology Commission of Shanghai Municipality. The certification provides access to numerous government benefits including certain tax benefits subject to further approval by relevant tax authorities and increases China Precision Steel's visibility in the precision steel industry."

The release added that the certification is awarded to high tech enterprises with technologically intensive competitive advantages and leading products that utilize advanced corporate management systems. In 2007, 288 companies in various industries were awarded the certification. The certification is valid for one year.

China Precision Steel is a niche precision steel processing company principally engaged in the production and sale of high precision cold-rolled steel products and provides value added services such as heat treatment and cutting medium and high carbon hot-rolled steel strips. China Precision Steel produces high precision ultra thin, high strength cold rolled steel products primarily for automotive components, food packaging materials, saw blades and textile needle manufacturing companies in the People's Republic of China. However, China Precision Steel is expanding into overseas markets such as Nigeria, Thailand, Indonesia and the Philippines, and intends to expand into Japan, the European Union and the United States in the future.

Mechel to list mining assets of USD 20 billion

Reuters reported that Steel maker Mechel plans to spin off its mining assets, including Russia's largest coal field, to create a company valued at no less than USD 20 billion.

Mr Igor Zyuzin CEO of Mechel who also has the largest financial interest in Mechel said he planned to list at least 20% of the mining company in an initial public offering. He did not say when or on which bourse the proposed listing would occur.

Mr Zyuzin said "We intend to spin off separate companies, including our mining assets. I don't rule out that there will be companies spun off in the near future. He said we value the mining assets of the company at no less than USD 20 billion."

Mechel's mining assets include the Yuzhny Kuzbass Coal Co and the Korshunov iron ore mine in Siberia. The company also paid over USD 2 billion at an auction last year to acquire control of assets in the eastern Russian region of Yakutia.

Mr Mukhamet Tsikanov VP of Mechel said the company was also considering listing its metallurgical and energy assets separately. He did not say when, or how much, the company planned to raise.

Mechel, which plans to invest USD 2.7 billion upgrading its existing assets by 2011, owns steel plants in Russia and Romania as well as a nickel plant and a ferroalloy plant in Siberia.

Severstal to invest USD 140 million in Arctic coal

It is reported that Russian mining and steel major Severstal will invest USD 140 million in upgrading its coal mines in the Komi Republic in 2008.

As part of the investment program, Severstal's subsidiary in the region, the Vorkutaugol Company will get improved industrial safety and working conditions for miners. In addition, provision of support for the development of Vorkuta and the Komi Republic as a whole will be arranged for.

MMK confirms interest in MEA

Thomson Financial reported that Magnitogorsk Iron & Steel Works may purchase a steel mill in Iran in order to supply the local market there.

A spokeswoman for Magnitogorsk Iron & Steel Works said “The Middle East, including Iran is a net consumer of our export metal.”

The spokeswoman added that “The Iranian market holds good prospects for us, it is growing rapidly and we are keen for objective reasons to strengthen our positions there, although it would be premature to talk about any specific projects. She said we are only examining the opportunities for growth.”

The Russian news agency added that Mr Viktor Rashnikov chairman of MMK visited several Iranian plants earlier this month, including Esfahan Steel, Mobarakeh Steel, Khuzestan Steel and Gol e-Gohar Iron Ore Mining.

MMK declined to comment on whether it planned to bid for any of these steel mills.

Russian and Hungary ink natural gas pipeline construction

It is reported that Russian and Hungary are about to sign an agreement on the construction of a natural gas pipeline and underground gas reservoir in Hungary after talks between Mr Alexey Miller CEO of Gazprom and Mr Janos Veres finance minister of Hungarian.

As per report Mr Veres has also been in talks with officials from the Russian Ministry of Industry and Energy. The agreement is the final link in the South Stream pipeline route from Russia along the Black Sea floor to Italy. It will be singed at the end of the week. Hungary continues to support the competing Nabucco pipeline project as well.

Gazprom is responsible for 65% of Hungary's natural gas imports. The new pipeline in will have a capacity of at least 10 billion cubic meter per year. The division of the costs and obligations of the project will be subject to additional agreements between Gazprom and the Hungarian MOL.

South Stream will lead from Russia to Bulgaria and branch there. A northern branch will continue to Serbia, Hungary and Austria and a southern branch will go through Greece to Italy. The pipeline will have a total capacity of about 30 billion cubic meter and cost USD 10 billion.

Russia increases ferrous metal roll production

According to the Russian Federal Statistics Service, in December 2008, production of metals and metal items grew by 2.3%YoY against the same period of 2007 and declined by 7.4%YoY against December 2007.

In January 2008, Russia produced 4.7 million tonnes of cast iron and blast furnace ferroalloys up by 4.1%YoY. Production of steel totaled 6.5 million tonnes up by 2.6%YoY including 3.8 million tonnes of oxygen converter steel up by 2.5%YoY, 1.7 million tonnes of electric steel up by 19.2%YoY.

SCM’s net income reached USD 3.8 billion

System Capital Management announced that its net income to USD 3.8 billion over 2007 and the total amount of long term financial investments grew to USD 5.5 billion.

System Capital said these impressive results indicate improvements in the holding’s transparency.

System Capital Management is Ukraine’s leading financial and industrial group operating in four core business areas metals and mining, energy, banking and insurance and telecommunications. It has revenues in excess of USD 6.719 billion and over 160,000 employees.

Russian Copper Company set to launch IPO

FIS reported that management of Russian Copper Company CJSC considers the opportunity of IPO to attract investments into the development of its assets in the territory of the Chelyabinsk region.

Ural Press Inform quoted Mr Dmitry Saburov Vice President of RCC as saying that all the company is to invest over RUB 43.789 million into the South Ural enterprises. Investments into Mikheevsky GOK CJSC will total over RUB 17.335 million, Uralhydronickel Limited RUB 8.319 million, Mauksky Mine CJSC more than RUB 261 million and so on.

Gazprom and Srbijagaz sign South Stream gas pipeline agreement

Itar-Tass reported that Russia and Serbia have concluded an agreement on the building of the South Stream gas pipeline.

The report said Mr Alexei Miller CEO of Gazprom and Mr Sasha Ilic acting director general of Srbijagaz put their signatures under the agreement on cooperation between Gazprom and state owned Srbijagaz Company in the implementation of the project for the building of a gas pipeline for the transit of natural gas by the territory of Serbia.

Mr Dmitry Medvedev first deputy PM of Russia and Mr Vojislav Kostunica PM of Serbia attended the signing ceremony.

Russia looking for heavy plate from Japan

YIEH reported that Russian TMK Group’s pipe producer, Volzhsky is seeking to purchase plate product for pipe making from Japan and it will be processed by Japan’s trading companies including Metal One.

As per report, since Vlozhsy has not yet made a firm request, Japanese firms are very cautious at present. Besides, Japan indicates that it is difficult to undertake supply before the testing of plate samples has finished. If Volzhsky does express strong demand for supply Japan will supply samples in advance.

Vlozhsky plans to enlarge its production of large diameter pipe in October reaching 650,000 tonnes.

Power Machines to supply equipments to Croatia

RIA Novosti reported that Power Machines, Russia's leading heavy machinery manufacturer will supply USD 72 million of equipment to a thermal power plant being built in Croatia.

Power Machines and Russian state controlled power plant builder Technopromexport signed recently a contract under which the heavy industry manufacturer will deliver power equipment for the Sisak-3 thermal power plant located some 50 kilometer from Zagreb, Croatia's capital.

Under the contract, Power Machines will deliver equipment in 2009 while the thermal power plant will be launched in the second quarter of 2010.

Power Machines established in 2000 is involved in the maintenance and modernization of equipment for steam, nuclear, hydro and gas turbine power plants.

Kazakhstan to increase natural gas output by 280% by 2020

RIA Novosti cited Mr Uzakbai Karabalin president of national oil and gas company KazMunaiGaz as saying that Kazakhstan intends to increase natural gas production from 29.6 billion cubic meters in 2007 to 114 billion cubic meter in 2020.

Mr Uzakbai Karabalin said "Natural gas production is expected to grow from 29.6 billion cubic meters in 2007 to 114 billion cubic meter in 2020. He said that most of the increase would be secured by putting new gas fields on stream in the west of the republic, as well as utilizing the resources of the Kazakh and Turkmen sectors in the Caspian shelf."

The company head said gas consumption in Kazakhstan is expected to grow from 13.3 billion cubic meters in 2007 to 18.7 billion in 2020.

Mr Gutseriyev sets up oil company in Azerbaijan

RIA Novosti reported that RussNeft ex head Mr Mikhail Gutseriyev completed a deal to buy two oil operators in Azerbaijan from Canada's Nations Energy.

Vremya Novostei said Mr Gutseriyev's allies began preparing the deal back last spring. As a result, Britain's Global Energy controlled by Mr Gutseriyev paid USD 340 million for an 85% stake in the Karasu Operating Company and 80% in the Kura Valley Operating Company.

Sources close to Mr Gutseriyev say quite possibly these oil assets will not be the last acquisitions by Global Energy in Azerbaijan, suggesting that Mr Gutseriyev and his allies are setting up a new oil company in the South Caucasus republic.

Mr Gutseriyev former CEO of RussNeft resigned on July 30th 2007 amid accusations of tax evasion and running an illegal business. The Interior Ministry issued an arrest warrant last year and applied to Interpol for him to be put on the international wanted list. He is believed to be living abroad according to the ministry's investigators.

RussNeft, one of Russia's top ten crude producers with recoverable reserves of more than 630 million tonnes faces substantial back tax claims.