SAIL RSP posts best ever production in January 2008

PTI reported that Steel Authority of India Limited’s Rourkela Steel Plant has posted an outstanding performance for January 2008 and all time best cumulative performance during April 2007 to January 2008.

RSP registered its best monthly production figure January in sinter, hot metal, crude steel and total saleable steel mill. Its output of 294,329 tonnes of sinter, 200,097 tonnes of hot metal, 192,212 tonnes of crude steel and 181,801 tonnes of saleable steel reflected an extraordinary capacity utilization of 113%, 118%, 119% and 128% respectively.

Its production in plate mill plates was 42,016 tonnes, a hot rolled plate was 29,687 tonnes and CRNO was 7,109 tonnes.

RSP also achieved best ever dispatch of steel with 184, 801 tonnes in January 2008.

CPI continues opposition of POSCO project

Kalinga Times reported that the Communist Party of India on weekend demanded that Orissa government should hold discussions with different stakeholders before going ahead with the survey work for POSCO-India's proposed steel project in Jagatsinghpur district.

Mr AB Bardhan general secretary of Communist Party of India at a press conference said that “The State government should hold talks with different political parties and the POSCO Pratirodh Sangram Samiti before taking any step to facilitate implementation of the steel project.”

Mr Bardhan, reiterating his party's stand to continue its opposition to the POSCO steel project, also demanded immediate withdrawal of police from the three gram panchayats of Dhinkia, Nuagaon and Gadakujang in Jagatsinghpur where land had been earmarked for the steel project.

Mr Bardhan criticized the rehabilitation and resettlement package announced by POSCO India for those who would be displaced by the project alleging that big money was being used to deceive the people in the three gram panchayats. He said that “All the stakeholders had not been consulted before finalization of the package.”

RINL April to January sales up by 12% YoY

Rashtriya Ispat Nigam Limited announced that it has achieved highest ever sales turnover of INR 1062 crores in January 2008, best since inception for any January month. The turnover includes INR 51 crores export proceeds also.

With this, the cumulative sales of RINL during April 2007 to January 2008 touched to a high of INR 7827 crores up by 12% YoY as compared to INR 6969 crores during April 2006 to January 2007.

RINL’s domestic sales also went up by 13% YoY and exports grew by 4% YoY during the period. RINL’s sale of special steels during this period was 1.393 million tonnes up by 59% YoY as compared to 0.873 million tonnes in April 2006 to January 2007.

Ramsarup Industries buys Balasore Minerals

BL reported that Indian steel wire major Ramsarup Industries Limited has taken over Balasore Minerals Co, which has iron ore, limestone and dolomite mines located in neighboring Orissa.

According to a statement issued by the company here, the acquisition will ensure regular and long term availability of raw material for Ramsarup Lohh Udyog Limited.

Villagers protest against iron ore exports from Belekeri Port

The protestors alleged that stacking of iron ore near their village has been causing air and water pollution in the village as a result of which many villagers were suffering from breathing problem now.

They added that the iron ore exporters despite making huge profits are not taking any steps to improve the condition of the villagers and that their repeated pleas in this regard were ignored by the companies.

The road block was lifted after assurance from police authorities that they would talk to the three export companies to fulfill the demands of the villagers.

JSW Steel shareholders approve transport business entry

JSW Steel on weekend announced that it has received the shareholders' nod to enter new business areas like transport. It said that the shareholders, at their extra ordinary general meeting on December 28th 2007, accorded their approval for carrying on the business of carrier of passengers and goods and merchandise by air, sea and surface.

As per the announcement, JSW Steel has also been allowed enter the segment of maintaining airways, shipping lines, roadways and other transport services, in addition to acting as clearing agents, forwarding agents, travel agents, charterers, tour agents and freight contractors.

JSW Steel at present owns a railway yard within its plant area through which it transports iron ore to the steel production facility. It is also in talks with German railroad operator Deutsche Bahn for a tie up to transport iron ore to the its plant at Toranagallu in Karnataka.

Friends of Earth urge Indians to abandon POSCO project in Orissa

Kalinga Times reported that POSCO India has unveiled its rehabilitation & resettlement package last week for the hundreds families that would be losing their land and livelihood sources for its venture.

Stating that it would provide house and compensation for the families that would be displaced by the steel project as per the state government's R&R policy, POSCO said that displaced families from government land will also be provided house in the rehabilitation colony.

It added that “During construction no permanent job will be available. One nominated member of each project affected family will be engaged in construction job though the contractor. The job would be mandated by suitable provision in the contacts.”

The engagements will be gradual and will have the following order of preference
1) Landless labor family working in betel vines
2) Displaced family from private land
3) Displaced family from government land
4) 100% land losing family
5) Partial land losing family
6) Other left out family in the 3 gram panchayats who are not directly affected by the project

POSCO said that “The scope of direct employment will arise after commissioning of the plant. One nominated member of each displaced family and 100% land losing family will be provided training and employment. One nominated member of other land affected families will be provided training free of cost for gaining employment in outsourced jobs which would be mandated by suitable provision in the contracts. Training will be provided to one member of other left out families from the three gram panchayats to enhance their skill for employment or self employment.”

As regards the compensation to free encroachment of government land, it said that cultivation in government land such as betel vine, prawn pond, paddy and fruit bearing trees as well as landless laborers working in betel vines will be compensated. It added that “Betel vine workers who will be rendered jobless after dismantling of betel vine structure will be paid reasonable amount of unemployment allowance for a period of six months or till they get wage employment under the contractor. After survey and demarcation a joint enumeration will be done by government and POSCO to prepare a list of betel vine workers for issuing eligibility cards for employment as daily wage workers in POSCO India's construction work through contract agencies.”

For the fishermen community living in the proposed project site, a jetty would be constructed. Those displaced families who would opt for self employment will be provided motorboats and nets for fishing.

CIL invites bid for e tendering service

Coal India Limited and its 8 subsidiaries have invited bids on January 22nd 2008 from experienced service providers for electronic tendering and reverse auction services in order to procure equipment, consumables, spare parts and other stores. The proposed system will allow bidders to submit their bids to CIL and its subsidiaries through an electronic bidding process.

The selected service providers will have to provide e tendering and reverse auction services to CIL or its arms to enable them to introduce e-tendering and reverse auction in respect of procurement of selected range of equipment.

The service providers are expected to host the e tendering and e procurement system and the reverse auction platform on their own secured portal on their server and related telecommunication, computer hardware and set up, operate and maintain it during the contract period.

CIL and its subsidiaries have considered 4 options for carrying out e procurement, which include e tendering with e price bids, e tendering with e price bids followed by reverse auction, e tendering with reverse auction and bare reverse auction. Intending bidders must also have experience in conducting electronic tendering and reverse auction for procurement of goods worth INR 2,720 crore each.

CIL and its 8 subsidiaries have firmed up an ambitious plan to procure equipment worth INR 35,000 crore in the next 5 years to increase coal production to 520 million tonne by 2011-12 and later to 664 million tonne by 2016-17 from the current level of 363 million tonne.

Jai Balaji net profit in Q3 surges

Jai Balaji Industries Limited has posted a total income of INR 3.51 billion for October to December 2007 quarter up by 202.8% YoY as compared to INR 1.159 billion in October to December 2006 quarter. Net profit was recorded at INR 230.3 million up by 278.1% YoY as against INR 60.9 million.

The total income of the company for the nine months ended Dec 2007 rose to INR 8.79 billion from INR 3.65 billion, while net profit advanced by nearly 270% to INR 740.2 million from INR 200.1 million in the corresponding period previous year.

Friends of Earth urge India to abandon POSCO project in Orissa

Friends of the Earth International have appealed to masses for sending message to Indian prime minister for abandoning POSCO’s proposed project in Orissa, as it considers the whole issue as a massive resources sell out by Indian government despite 2 year long protests by people of Orissa.

On its web site http://www.foei.org/en/get-involved/take-action/posco-india it has posted a form and has urged people to take out 2 minutes to fill the form and send an e mail opposing the project. It said that “Let India’s Prime Minister know that the world is watching. Urge him to abandon the POSCO project.

The text of the proposed email is as under

To
Dr. Manmohan Singh
Prime Minister of India
South Block, Raisina Hills New Delhi, India

Sir
I am writing to request that you abandon the POSCO integrated mining steel plant port project, as it is unlikely the project can be initiated without massive bloodshed. You must be aware that women and children have placed themselves at the first line of defense at the barricade, beyond which neither the state nor the corporation has been able to enter to date. Industrialization and development must benefit people. It cannot occur at their cost.

Considering the steadfast opposition, and the willingness of people to give up their lives rather than their lands to POSCO, I am convinced this project is unjustified, even immoral. The enthusiasm shown by Orissa state and your own office in promoting the interests of this South Korean multinational is highly irregular.

To see the world's largest democracy at war with its own people is indeed a sad moment for all of us who believe in the democratic ideal. The conditions in and around the POSCO project site are nothing if not war-like. Reports of platoons of heavily armed police, frequent flare-ups of violence and bomb blasts, and posturing of state muscle do not bode well for Indian democracy. I hope that POSCO's offer of INR 50,000 crores in investment is not tempting this great democracy's leaders to forget their obligations to its citizens. However, this hope may be misplaced. I am aware of newspaper reports that demonstrate your office has personally intervened to pressure agencies to grant regulatory permits, despite the considered opinions of officials that such permits should not be granted.

I appeal to your good sense and conscience to heed what the villagers of Jagatsinghpur are saying. They have said “NO” to POSCO, and I request you to end their strike by complying with their demands and abandoning the project.

Sincerely
Name
Country

Russia offers support for iron ore technology to Jharkhand

Ranchi Express reported that Russia has offered its modern technology to Jharkhand for augmenting the quality of iron ore used in steel manufacturing.

As per report, Mr Vyacheslav I Trubnikov Russian ambassador to the Republic of India had a brief interaction last week with Mr Madhu Koda chief minister of Jharkhand and offered Russian support for enriching the quality of iron ore available in Jharkhand.

Mr Trubnikov while addressing a gathering of industrialists and intellectuals here at a program organized by Confederation of Indian Industry on Friday spoke at length about the State's industrialization potential and Russia's association with it.

Usha Martin to raise operating margin to 24% in 2008

BS reported that Usha Martin Limited is looking to increase its operating margin to 24% in 2008-09 from the present 19%. It would also double its steel making capacity to 700,000 tonnes by 2009-10 from the current production capacity of 350,000 tonnes.

Mr Rajeev Jhawar MD of Usha Martin said that “We would invest INR 21 billion altogether for enhancing the company's capacity of steel production and minerals supply and developing self-sufficiency in power production by 2010. Of this total amount, we have already spent INR 7 billion.”

He added that about INR 16 billion would be invested to double steel production capacity, setting up of a captive power plant at Jharkhand and enriching the company's mineral resources. The remaining INR 5 billion would be spent on developing the company's value added products like wire ropes, wires and bright bars.

Usha Martin would set up a 20 MW captive power plant at Jharkhand by next fiscal to supply power to their existing wire rope manufacturing unit at Ranchi. It has posted a consolidated net sales growth of 16% YoY for October to December 2007 quarter at INR 5.5 billion as compared to INR 4.8 billion during October to December 2006 quarter. Net profit was recorded at INR 412.3 million up by 3% YoY as against INR 399.5 million. It has also posted a growth of 12% YoY in its global wire rope production in the third quarter.

Usha Martin has created a worldwide distribution, service and marketing network spread across the US, Britain, Europe, Africa, the Middle East, South Asia and Australia. It has manufacturing units in Ranchi and Jamshedpur in Jharkhand. Its overseas units are located in Britain, Thailand, the United Arab Emirates and the US.

POSCO India announces R&R package

Kalinga Times reported that POSCO India has unveiled its rehabilitation & resettlement package last week for the hundreds families that would be losing their land and livelihood sources for its venture.

Stating that it would provide house and compensation for the families that would be displaced by the steel project as per the state government's R&R policy, POSCO said that displaced families from government land will also be provided house in the rehabilitation colony.

It added that “During construction no permanent job will be available. One nominated member of each project affected family will be engaged in construction job though the contractor. The job would be mandated by suitable provision in the contacts.”

The engagements will be gradual and will have the following order of preference
1) Landless labor family working in betel vines
2) Displaced family from private land
3) Displaced family from government land
4) 100% land losing family
5) Partial land losing family
6) Other left out family in the 3 gram panchayats who are not directly affected by the project

POSCO said that “The scope of direct employment will arise after commissioning of the plant. One nominated member of each displaced family and 100% land losing family will be provided training and employment. One nominated member of other land affected families will be provided training free of cost for gaining employment in outsourced jobs which would be mandated by suitable provision in the contracts. Training will be provided to one member of other left out families from the three gram panchayats to enhance their skill for employment or self employment.”

As regards the compensation to free encroachment of government land, it said that cultivation in government land such as betel vine, prawn pond, paddy and fruit bearing trees as well as landless laborers working in betel vines will be compensated. It added that “Betel vine workers who will be rendered jobless after dismantling of betel vine structure will be paid reasonable amount of unemployment allowance for a period of six months or till they get wage employment under the contractor. After survey and demarcation a joint enumeration will be done by government and POSCO to prepare a list of betel vine workers for issuing eligibility cards for employment as daily wage workers in POSCO India's construction work through contract agencies.”

For the fishermen community living in the proposed project site, a jetty would be constructed. Those displaced families who would opt for self employment will be provided motorboats and nets for fishing.

Vedanta to invest USD 14 billion in metals & energy sector

BS recently reported that Vedanta Resources Group is planning to invest USD 14.58 billion in the next 3 years in non ferrous metals and energy sector including USD 3 billion committed in 2007.

The report cited Mr R Kishore Kumar CEO of Sterlite Industries India as saying that it would heavily invest in copper, lead, zinc and aluminum and energy. He added that it would be increasing its captive power generation capacity to 3000 MW by 2010. In addition, the group was planning to generate of 7200 MW of energy by 2012.

Mr Kumar said that it would invest USD 1.15 billion in copper, USD 925 million in lead, USD 1.9 billion in zinc and USD 6.9 billion in energy.

He further added that Sterlite had signed MoUs with entrepreneurs to develop downstream products as part of increasing copper consumption in India. It intends to develop a cluster for downstream copper projects near by its plant at Tuticorin in Tamil Nadu.

NTPC to import 67% more coal next fiscal - Report

Bloomberg reported that National Thermal Power Corporation Limited is planning to import 67% more coal next fiscal year to curb the impact of record fuel prices as its meets soaring electricity demand.

Mr T Sankaralingam chairman of NTPC said that “NTPC will seek annual contracts to supply cheaper grades for its 18 coal fired plants. He added that “We have been talking to people for lower grade coal because our boilers are all designed for low grade coal. Almost all of NTPC's imports are from Indonesia and it plans to increase overseas purchases to 4 million tons next year from 2.4 million tonnes this fiscal.”

Mr Sankaralingam added that NTPC may have to pay 39% more to import the fuel in the year starting April 2008. He said that at current prices NTPC will on average pay as much as USD 75 per tonne for imports next year as compared with USD 54 in the year to March 31st 2008.

NTPC, which reported a 15% fall in third quarter profit to INR 17.8 billion, needs to ensure coal supplies to meet its target of almost doubling capacity to 51,000 MW the next 4 years from the current 28,664 MW. It plans to spend INR 130 billion to add power capacity in the year starting April 2008. India faces a 13% power shortage during peak hours and the government has set a target to boost output by 60% in the next five years to 210,907 MW.

Punj Lloyd Q3 2007 net profit up by 105% YoY

Punj Lloyd Limited has announced unaudited results for October to December 2007 quarter

Punj Lloyd Limited has posted a net profit of INR 391.60 million for October to December 2007 quarter up by 105.7% YoY as compared to INR 190.30 million in October to December 2006 quarter. Total income has increased from INR 6694.10 million in October to December 2006 quarter to INR 12582 in October to December 2007 quarter up by 87.9% YoY.

The consolidated results are as follows
It has posted a profit after minority interest and share of profits of associates of INR 917.20 million for October to December 2007 quarter up by 89.9% YoY as compared to INR 482.80 million in October to December 2006 quarter. Total Income has increased from INR 14635 million for October to December 2006 quarter to INR 21629.30 million for October to December 2007 quarter up by 47.7% YoY.

BHPB approves CAPEX for Western Australian iron ore business

BHP Billiton has announced approval for USD 1.094 billion capital expenditure to underpin accelerated growth of Western Australia iron ore business. This amount represents pre approval expenditure for rapid growth project 5, which is expected to increase Western Australia iron ore business’s installed capacity to more than 200 million tonnes per annum during calendar year 2011.

This pre approval funding will be used to commence duplication of the railway track between the Yandi mine and Port Hedland and begin the expansion of the inner harbor at Port Hedland. Construction of this second railway is expected to begin in May 2008, subject to various government approvals. The early funding will also allow early procurement of long lead items and detailed engineering studies to expand capacity at Yandi and Area C.

Mr Ian Ashby president of BHP Billiton Iron Ore said that "The core of the Pilbara is progressively moving to the Yandi Area C mining hubs. Double tracking the rail to this area will create the rail capacity to support our planned expansion to more than 300 million tonnes per annum. In parallel with this project, we are advancing our studies on the outer harbor development at Port Hedland. Combined with the rapid growth project 5 rail work, the port expansion would complete the major infrastructure requirements to support an operation of over 350 million tonnes per annum."

In the last quarter BHP Billiton delivered rapid growth project 3, which expanded the capacity at Area C by 20 million tonnes per annum and rapid growth project 4 is on track to increase installed capacity to 155 million tonnes per annum in calendar year 2010. The approval for the balance of the rapid growth project 5 capital is expected during the second half of calendar 2008.

BHP Billiton’s growth program to date includes the following recent projects, which were completed within approved operating currency budgets and schedules
1) RGP2, which was approved in October 2004 and increased capacity by 8 million tonnes per annum. Construction was completed in 2006.
2) RGP3, which was approved in October 2005 and increased capacity by 20 million tonnes per annum to 129 million tonnes per annum. Construction was completed at the end of 2007.
3) RGP4, which was approved in March 2007 and will increase capacity by 26 million tonnes per annum to 155 million tonnes per annum. Construction will be completed in 2010.

Thermal coal prices cross USD 100 level

Bloomberg reported that coal prices jumped to a record at Australia's Newcastle port a benchmark for Asia surging past USD 100 per tonne for the first time as snowstorms in China, power cuts in South Africa and floods in Queensland cut output.

According to the globalCOAL NEWC Index power station coal prices at the New South Wales port increased USD 23.09 to USD 116.44 per tonne in the week ended February 1st 2008.

China, with coal deliveries disrupted by snowstorms will halt exports this month and in March, while Anglo American Plc closed mines last month in South Africa on power shortages. In Australia BHP Billiton Mitsubishi Alliance is among four miners that declared force majeure on deliveries after heavier than usual rain flooded pits.

Mr Graham Wailes coal analyst at AME Mineral Economics Pty in Sydney said that “It is all stemming back to China, where it looks as if they've got some real problems. And South Africa is having its dramas. The pressure's on, it's a bit of a short term squeeze.''

The price increase comes as coal suppliers and buyers are set to begin negotiations on annual contract prices to take effect April 1.

Iron ore price negotiations – UBS sees 55% jump

Investment bank UBS has predicted that global steel companies will end up paying 55% more in 2008 than 2007 as tense contract negotiations now under way with major mining companies.

In a recent research note, UBS said that mining companies are looking for a 70% increase in contract pricing while steel makers are insisting on 30%.

It added that "We believe that the dynamics of the iron ore market remain firmly in favor of the mining companies. Spot prices for iron ore continue to trade roughly 200% higher than the 2007 contract level. We have raised our price increase assumption for the upcoming 2008 contract to 55% from 35%."

Delta Mining bags Western Cluster Iron ore deposit in Liberia

It is reported that Johannesburg based Delta Mining Consolidated Company has won the bid to develop the Western Cluster Iron Ore Deposit in Liberia.

Delta Mining Consolidated was one of seven companies that submitted a bid for the Western Cluster iron ore deposits in Liberia. According to a South African state news agency BuaNews report other bidders include TATA Steel, Sinosteel Corporation, Xingxing Group, Rio Doce South Africa, ArcelorMittal and Bahlodi Africa.

Delta Mining Consolidated said it has received no written confirmation from the Liberian government, but it has been public knowledge for several weeks that the company was on a short list for the tender."

In the event that the bid is successful, Delta Mining Consolidated will move quickly towards the signing of a formal agreement between itself and the Liberian Government. Delta Mining Consolidated will be required to mine and manage the concession for a minimum period of 25 years with the option of renewal for additional agreed periods.

The Western Cluster consists of three iron ore deposits namely the Mano River Iron Ore deposit, formerly mined by the National Iron Ore Company; the western portion of the Bomi Hills Iron Ore deposit formerly mined by the Liberia Mining Company and the never exploited Bea Mountain Iron Ore deposit. The Liberian government combined the deposits in July last year following an investment analysis that showed that developing the deposits as one entity would be more attractive.

Compliance, ITOCHU and LG to develop Raven coal project

Compliance Energy Corporation announced that it has signed an exclusive MoU with ITOCHU Corporation and LG International Corporation for the development of the Raven Coal Project located on Vancouver Island in Canada.

Under the terms of the MoU the parties will make an initial payment of USD 600,000 to secure exclusivity in the project and subject to the favorable outcome of due diligence will fund the next USD 5.4 million in payments to earn up to a 50% interest in the Raven Coal Project. The USD 5.4 million will be spent as, USD 2.4 million to complete the purchase of the property and up to USD 3 million for environmental assessment studies and a bankable feasibility study.

The MoU provides for a due diligence period up to May 31st 2008 at which time the company and the parties expect to have definitive agreements signed.

The Raven Coal Project located in the Comox Coal Basin of Vancouver Island, British Columbia covers an area of approximately 3100 hectares and has 39,093,000 tonnes of measured and indicated and 59,004,000 tonnes of inferred coal resources as reported in the Company's technical report prepared by OR Cullingham Resource Consultant Limited.

ITOCHU Corporation is a major Japanese trading house and, among other things, has extensive experience in the development of coal mines and the marketing and sale of coal globally and has investments in coal mines in Australia and Indonesia. ITOCHU had annual revenues of USD 22 billion US and net income of USD 1.5 billion in the fiscal year ended March 2007.

LG International Corporation is a leading general trader in Korea with a worldwide overseas branch network and has abundant experience in coal mining development and the marketing and sales of coal worldwide. It has annual revenues of USD 5.8 billion US and investments in coal mines in Russia, Australia and Indonesia.

ArcelorMittal SA lifts prices by up to 12%

ArcelorMittal South Africa has confirmed that it would increase the prices of its flat steel products by 10% and long steel products by 12% with effect from March 1st 2008.

Mr Tami Didiza spokesperson of ArcelorMittal SA said that the international steel market was currently experiencing significant price increases. He added that “Products such a hot rolled coil and low carbon wire rod are selling above USD 700 per tonne which is well above our domestic prices.”

ArcelorMittal SA also implemented hikes of between 5% and 10% for flat steel products and between 3% and 8% for long steel products.

South Korean utilities coal stock fall to under 2 weeks

Reuters reported that thermal coal stocks at South Korean utilities have fallen to less than two weeks worth of supplies. The report cited a local company source as saying that "Because of supply disruptions from China, our stocks have fallen to less than two weeks worth of supplies. This goes for other utilities as well."

On top of the halt in Chinese supplies, Asian coal supplies have been strained by force majeure declarations issued by Australian coal producers and power outages in South Africa. Some Indonesian sellers said although they have received offers as high as USD 115 a tonne for spot shipments of high-grade coal, they are reluctant to sell at that level as they believe prices could climb higher in coming weeks.

Industry sources said that an Indonesian producer sold a Panamax shipment to Japanese utility Tohoku Electric at USD 110 a tonne, for coal with calorific value of 6,500 kilo calorie per kilogram on a gross as received basis. However, a source from a mid size Indonesian producer said the firm has just sold a Panamax shipment at USD 105 a tonne for coal with a calorific value of 6,322 kilo calorie per kilogram.

Earlier in the week, another source from a South Korean utility said the power generators would have to seek Indonesian or Australian coal to make up for the loss from China.

South Korea's 5 main state owned power generators normally keep coal stocks of between 2 weeks and 3 weeks of supplies, below the industry recommended levels of 30 days to 45 days.

Baffinland and Rogesa ink LoI for iron ore supply

Baffinland Iron Mines Corporation has last week announced the signing of a letter of intent for the future sale of up to 1 million tonnes per year of iron ore to ROGESA Roheisengesellschaft Saar mbH, 50:50 JV of AG der Dillinger Huettenwerke and Saarstahl.

Under the Letter of Intent, ROGESA would purchase up to 800,000 tonnes of lump and 200,000 thousand tonnes of fine iron ore per year to meet additional needs, each over a long term period, to start in 2014. The Letter of Intent is an expression of interest only, and any binding contract of purchase and sale will be subject to, among other things, a production decision by Baffinland, and the future negotiation and consummation of a final sales contract with ROGESA.

Baffinland's Mary River Project is focused on the European market for the sales of its lump and fine iron ore. It has currently targeted 16 million tonnes to be placed within the European market on an annual basis. This level of European market penetration would represent some 90% of Baffinland's intended initial output of 18 million tonnes per annum.

This represents the fourth letter of intent signed with an end user steel company. ROGESA is one of several companies that Baffinland is currently negotiating sales contracts with for the Company's planned bulk sample program. Approximately 250,000 tonnes is proposed to be mined over the current winter and trucked to Milne Inlet before being transported to Europe as feed for production scale trials in various blast furnaces beginning in the third quarter of 2008. The results of this program will form an important final geological and metallurgical test prior to the establishment of contractual sales and purchase agreements with steel producers.

Mr Michael Zurowski executive VP of ROGESA said that it is the fourth company to sign a letter of intent with Baffinland. He added that “In due course, we expect to execute additional letters of intent as Baffinland establishes its future customer base."

Mr Gordon McCreary president & CEO of Baffinland said that "Baffinland is pleased with the continued strong support of ROGESA and indeed the entire breadth of the European steel industry. Baffinland has introduced the Mary River Project to several potential customers and each has expressed an interest in the planned bulk sample. It will be important to advance this interest and these letters of intent, into sales contracts to enable Baffinland to develop this truly important project."

Baffinland is a Canadian publicly traded junior mining company that is focused on its wholly-owned Mary River iron ore deposits located on Baffin Island, Nunavut Territory in Canada.

JPMorgan Chase raises 2008 coal prices forecast

JPMorgan Chase & Co last week said annual coal contract prices will rise more than earlier forecast because of an increase in demand from India and constraints on global exports. It raised its estimate for 2008 contract prices for power station coal to USD 90 per tonne from earlier USD 70 per tonne.

Mr David George analysts for JPMorgan said ''Given the strong growth in demand for seaborne coal with limited new supply, we see overall strength for the international coal market. In addition to China we expect growth in Indian demand. Contract prices for thermal coal are presently USD 55.65 per tonne for the year that started April 1st 2008 while coking coal contract prices are USD 98.38.”

According to the globalCOAL NEWC index prices for thermal coal burnt in power stations, jumped 3.9% to a record USD 93.35 per tonne last week at Australia's Newcastle port. Coking coal prices are being driven up by reduced output in northeastern Australia due to flooding.

Ancient Iron Ore mine found in Peru

Mr Kevin Vaughn Purdue Assistant Professor of Purdue University has discovered an intact ancient iron ore mine in South America, suggesting pre Incan civilizations were mining the ore.

The researchers determined that the mine is a human-made cave that was first created around 2,000 years ago. An estimated 3,710 metric tonnes was extracted from the mine during more than 1,400 years of use. The mine, which is nearly 700 cubic meters, is in a cliffside facing a modern ochre mine.

Mr Vaughn, who studies the Nasca civilization that existed from AD 1 to AD 750, said the newly discovered mine is the only hematite mine recorded in South America prior to the Spanish conquest. Hematite is a type of iron also known as ochre.

He said the discovery of the 2,000 year old mine in the Ingenio Valley of the Andes Mountains in southern Peru demonstrates iron ores were important to ancient Andean civilizations.

In 2004 and 2005, Mr Vaughn and his team excavated Mina Primavera, which is located in the Ingenio Valley of the Andes Mountains in southern Peru. The research team performed field checks and collected some samples in 2006 and 2007. The findings of the excavation are published in December's Journal of the Minerals, Metals & Materials Society.

Vaughn hypothesizes that the Nasca people used the red pigmented mineral primarily for ceramic paints, but they also could have used it as body paint, to paint textiles and even to paint adobe walls. The Nasca civilization is known for hundreds of drawings in the Nasca Desert, which are known as the Nasca-Lines and can only be seen from the air, and for an aqueduct system that is still used today.

ThyssenKrupp VDM GmbH increases nickel alloy capacity

It is reported that ThyssenKrupp VDM GmbH is working intensively to cement and strengthen its position as one of the world’s leading suppliers of high performance nickel alloys and to achieve this goal, various measures with investments of more than EUR 70 million have been launched as part of a forward strategy. They include the relocation of wire production from Bärenstein to Werdohl, where the company’s headquarters is based and a state of the art production line for nickel alloy and high alloy special stainless steel wire has been created which officially began operation lastweek.

Approximately 550 tonnes of wire per month will be produced in an 11,000 square meter building. The investment has cost around EUR 12 million. The roughly 160 employees in Bärenstein have found new jobs within ThyssenKrupp VDM.

Dr Jürgen Olbrich chairman of “The move took place while production continued, allowing us to guarantee supplies to our worldwide customers at all times. With the new and extensively modernized wire production line ThyssenKrupp VDM is ideally equipped for the future.”

Dr Michael Rademacher vice chairman of ThyssenKrupp Stainless AG said that “Competitive wire production was no longer possible at the previous site in Bärenstein. Increased demands on equipment, logistics and production efficiency made it necessary to move to the company’s main base. Rolled, heavy, fine and flat wire as well as heating elements and welding wire are now produced at the Werdohl plant.”

The program also includes the expansion of remelting capacities and the building of a forging line at the company’s Unna site.

Global supply issues impacting US coal prices and supply

It is reported that a rash of major coal supply issues around the world has made US export coal more attractive and more expensive.

BNP Paribas's Lance He said about the Chinese market, “Given the tight supply, we believe incremental coal demand would mainly trade at spot prices. We expect large coal makers' spot sales to increase in 2008. We expect coal makers to enjoy average selling price hikes in 2008.”

Floods in Australia, the world’s second largest coal exporter, temporarily shut down mines and forced several producers to declare force majeure, driving coal prices in that region most headed to China to record highs on limited supply. Also affecting global markets was the news that China announced a two month halt to coal exports, as it becomes more concerned with its domestic power needs. Turning off the Chinese supply for two months has impacted global prices.

Living Steel launches 3rd International Architecture competition for sustainable housing

Living Steel has once again launched the 3rd International Architecture Competition and asking architects to take up the challenge to develop sustainable housing for the world’s burgeoning housing shortage. Architects with the task of creating energy efficient, single family detached housing in Russia that minimizes climate change emissions and can withstand temperature extremes, yet is affordable to build and to buy.

Judged by some of the leading architects around the world, total prizes and honoraria are EUR 100,000, with the winning design awarded EUR 50,000. The winning architects will use the exceptional qualities of steel to construct their design at Cherepovets in Russia, where temperatures can range from minus 49 degree centigrade to plus 34 degree centigrade.

Mr Scott Chubbs Program Director of Living Steel said “This competition is the chance to be a positive force in the growing global need for economical, environmentally responsible housing. We’ve put together an exciting format that will allow ten teams of two architects each to present their best ideas for filling this critical need.”

He said “We want to give architects the opportunity to imagine their extreme ideas making an extreme impact for our world and for the people that will call their vision ‘home. We are anticipating a great time of exploring a score of possibilities for home and community, not only to meet this competition challenge, but to offer the world viable, sustainable solutions for comfortable and affordable housing for similar regions.”

The 3rd International Architecture Competition follows two other successful Living Steel competitions that are entering the demonstration building construction stage in Brazil, China, India, Poland and the United Kingdom.

MEPS reports SS price dip in January globally

MEPS reported that January transaction prices for austenitic stainless grades fell in most parts of the world.

MEPS said that “Exceptions were the United States and Spain. Mills in these countries currently use a reference period for surcharges based on alloy costs recorded two months prior to delivery of the steel. The remaining nations have either no alloy surcharge or the term for calculation is based on the price of inputs in the month before delivery of the stainless product.”

MEPS said that “Surcharges are not universally applied but it is said that stainless producers in China, Taiwan and South Korea are seriously considering introducing them in the near future. A limited system is in force in the Japanese market. Acerinox, the Spanish producer, which maintains the previous EU method for alloy surcharge calculations, is said to be prepared to move in line with the other major regional flat products manufacturers.”

MEPS added that “If Acerinox do introduce a system for calculating alloy surcharges similar to that undertaken by its competitors, it will simplify the current complex situation across the EU. This month, Spanish and US alloy surcharges for the 300 series are just below the December outturn. However, in the remainder of Europe, figures decreased significantly. In February, US and Spanish austenitic surcharges will be lower but in the rest of Europe a higher value will be recorded.”

US steel import decline in December 2007

According to Mr David Phelps president of American Institute for International Steel Inc, US imports declined again in December to 1.98 million tonnes by 15% from November’s low level and by 34.3% compared to December 2006. For the year the decline from record 2006 levels was 26.6%.

He said that “Overall, 007 was an average year for total imports at 33.2 million tonnes with the second half reductions reflecting high inventories, the weakening dollar, more attractive steel prices in other markets and high freight rates. The good news for steel importers is that by December, inventories had reached the bottom, prices began to improve and there is a hope that freight rates may moderate.”

He added that “It is clear that the US steel market is robust in early 2008 with rapidly increasing prices and a general view that the domestic industry will fare well in the first half. We expect that import ordering will improve slowly during the first half. However, fears of a recession leave us with uncertain market conditions for the second half of 2008.”

Total Steel imports in December 2007 were 1.976 million tonnes decrease by 14.9% as compared to 2.322 million tonnes in November 2007, and a 34.3%YoY decrease compared to December 2006. For YTD figures, imports decreased 26.6% compared to 2006 or from 45.3 million tonnes in 2006 to 33.2 million tonnes in 2007.

Hyundai Steel to raise H beam prices

It is reported that South Korea's second largest steelmaker Hyundai Steel will raise prices for the fourth time this year, after the costs of raw material scrap iron jumped to a record.

Mr Park Cheon Tark a spokesman for the Incheon based company said the price of large H-beam products, steel used in frameworks of buildings will rise 8% to JPY 839,000 per tonne from JPY 779,000 per tonne on February 1st 2008.

According to Mr Lee Eun Young an analyst with Mirae Asset Securities Company Hyundai Steel needs to raise prices to revive growth after suffering its first profit drop in a year on rising raw materials costs. Today's increase will boost annual sales by CNY 220 billion and rival Dongkuk Steel Mill Company may follow suit.

Mr Lee Chang Mok a steel analyst with Woori Investment & Securities Company said that ''The steelmaker probably will have to raise prices again later as costs of scrap continue to climb. Demand for construction steel has been picking up, enabling it to pass on costs to customers. The Korean steelmaker posted 7.38 trillion won in sales last year.

Mr Godsell to retire from Anglo American board

Anglo American Plc has announced that its non executive director Mr Bobby Godsell will retire from the board at the conclusion of the AGM to be held on April 15th 2008. Mr Godsell joined the board in 1999 and has been with Anglo American since 1974.

Sir Mark Moody Stuart chairman of Anglo American said that "On behalf of the board, I would like to thank Mr Bobby for his very significant contribution to Anglo American over some 34 years. Mr Bobby served as CEO of AngloGold from 1998 and its successor company, AngloGold Ashanti until his retirement in 2007. Mr Bobby brought a wealth of expertise and experience to his Board roles and we wish him every future success."

BlueScope completes acquisition of IMSA from Ternium

BlueScope Steel Limited has announced that its subsidiary BlueScope Steel North America Corporation has completed the acquisition of IMSA Steel Corporation from Ternium SA for approximately USD 730 million. During the transaction, Credit Suisse acted on behalf of BlueScope Steel while Goldman Sachs represented Ternium.

Mr Paul O'Malley MD & CEO of BlueScope Steel said that "The acquisition of this high quality US business marks a significant milestone in the implementation of BlueScope Steel's North American strategy. We are delighted to welcome more than 2500 employees into our global company and we are now moving swiftly to integrate ASC Profiles, Metl Span, Steelscape and VP Buildings into BlueScope Steel North America. The expanded company now has an outstanding geographic footprint and market offer. We will service customers throughout North America with coated steel products, customized pre engineered buildings, steel building components and insulated foam panels.”

Mr Brian Kruger president of BlueScope Steel North America said that "We are very pleased to welcome ASC Profiles, Metl Span, Steelscape and VP Buildings to BlueScope Steel. With the inclusion of VP Buildings, we now have an expanded presence in the customized pre engineered buildings market with an unprecedented distribution network of builders. Metl Span and ASC Profiles provide entry into the building panels and components market with two well known brands. We expect the demand for insulated panels across North America to grow significantly over the next several years reflecting the increased pressure on energy consumption and the anticipated changes in US energy regulations. Metl-Span, the market leader in the supply of insulated foam panels in North America, positions us well to seize this opportunity. Steelscape provides us with well recognized metallic coated and painted steel products as well as the opportunity of increasing the pull through of hot rolled coil from BlueScope Steel's Port Kembla Steelworks in Australia."

Mr Kruger added that "The addition of the four businesses significantly boosts our presence in North America and the combined businesses will represent approximately 25% of BlueScope Steel's total revenue. Our strategic intent is to broaden our scope and geographic reach and to expand our developing downstream multi-brand, multi channel strategy."

According to Mr Kruger, plans for realizing the value creation opportunities are progressing well. He added that within 3 years, BlueScope Steel expects to realize synergies of approximately USD 40 million per year from

a) Increased product sales through the expanded distribution networks
b) Manufacturing improvements
c) Procurement savings due to economies of scale with an expanded footprint
d) Logistics savings with more effective utilization of carriers and shipping lines
e) Increased pull through of BlueScope Steel hot rolled coil products from Port Kembla Steelworks, to downstream distribution channels including Steelscape on the US west coast

IMSA Steel Corporation has 4 distinct businesses with manufacturing facilities throughout the United States and sales throughout North America

1) ASC Profiles Inc: A manufacturer of building components including architectural roof and wall systems and structural roof and floor decking with 10 production facilities
2) Steelscape Inc: A west coast producer of metal coated and painted steel coils with three production facilities
3) Metl Span Llc: A manufacturer of insulated steel panels for commercial, industrial and cold storage buildings with 5 production facilities
4) Varco Pruden Buildings Inc: A manufacturer of pre-engineered building systems for the construction market with 5 manufacturing facilities

FNB Capital to invests in Marwas Steel Company

It is reported that FNB Capital Corporation LLC has provided capital financing for the purchase of Marwas Steel Company of Scottdale, PA. The purchase was led by Mr James Philipkosky of MLP Steel, LLC. Financial details were not released, but the company will remain local.

Mr Stephen Gurgovits Jr president & CEO of F.N.B Capital Corporation said that "Although vastly different from the days of giant steel mills, the steel industry continues to be an important business in greater Pittsburgh. Marwas Steel has successfully found the right mix of products and customers to assure future growth. We are very excited to be a part of this transaction."

FNB Capital Corporation LLC is headquartered at Ross Township in Pennsylvania. A subsidiary of FNB Corporation, it specializes in providing subordinated debt, private equity and other types of financial capital to small and medium sized commercial enterprises, focusing on recapitalizations, buyouts, generational transitions, mergers and acquisitions, and other growth capital needs.

Arch Coal update on 2007 results

Arch Coal Inc has posted net income available to common shareholders of USD 81.3 million on income from operations of USD 75.1 million and EBITDA of USD 142.9 million in October to December 2007. In the fourth quarter of 2006, it earned net income available to common shareholders of USD 79.5 million on income from operations of USD 60.5 million and adjusted EBITDA of USD 117.7 million.

For the full year 2007, Arch earned net income available to common shareholders of USD 174.7 million as compared with USD 260.6 million for full year 2006. It also earned USD 471.7 million of adjusted EBITDA in 2007 as compared with USD 545.0 million in 2006, when market conditions were more favorable.

Total sale in million tons
Costs in USD per ton

Mr Steven F Leer chairman & CEO of Arch said that "During 2007, Arch Coal achieved our second best year of earnings in the company's 10 year history as a public corporation. We are proud of the financial performance achieved in 2007, especially considering the weakened state of US coal markets during much of the year. Also, we are particularly pleased with our fourth quarter results, which benefited from strong execution at our mines as well as positive momentum in global coal markets. Looking ahead, we are optimistic that domestic coal markets will continue to improve in 2008, driven by the strength of international coal markets. We also expect the company to deliver a record performance in 2008, with meaningful expansion in operating margins, earnings per share and EBITDA."

Mr John W Eaves president & CEO of Arch said that "Our operations ran exceptionally well during the fourth quarter, and turned in a solid performance for the full year 2007. Each operating region made a substantial contribution in the quarter just ended, particularly in terms of cost containment and margin expansion. We applaud these efforts and look to build upon this performance in 2008. Additionally, the early start up of our Mountain Laurel operation has exceeded our expectations and contributed meaningfully during the fourth quarter. With the flexibility to sell a substantial portion of the mine's output into booming metallurgical and domestic pulverized coal injection markets, and with the mine's extremely competitive cost structure, we expect to significantly expand our operating margin in 2008."

Eskom asks DME to speed up mining rights process

It is reported that South Korean utility Eskom has identified the long term growth in supply of coal as a significant challenge for future generation capacity.

Mr Rob Lines GM of Eskom said that projected demand for coal for existing and new power stations, which would average at 4% a year, far outstripped the projected production and supply of the commodity over the next decade. He added that the current shortfall in the production of coal was already of concern to Eskom. The projected demand for coal that Eskom would require this year was 125 million tonnes as well as an additional 11 million tonnes to ease the energy crisis South Africa was presently experiencing.

While Eskom was keen to enter into new contracts with junior mining companies for the supply of more coal, Mr Lines insisted that this would not be possible until the company had received its new order mining right.

Mr Fleur Honeywill MD of junior miner HCI Khusela Coal stated that Eskom was the one entity that could assist junior companies in acquiring their mining licenses. He added that it was essential that Eskom assisted junior miners in acquiring their mining rights owing to the fact that these companies were in a position to supply more coal to Eskom immediately but could not because of the delays in being granted these rights.

Iguaçu forecasts recovery of revenues in 2008

Mr Rogério Marins president of Brazilian steel can producer Metalgráfica Iguaçu said that it expects to report gross revenues of roughly BRR 110 million for 2008. He added that "I think we could see a recovery in the cooking oil segment this year due to strong environmental movements against the use of plastic, which are taking place in countries such as China.”

Mr Marins said that "The outlook for this sector is very positive because there has been a recovery in salaries and availability of jobs. Once people have a higher salary, they eat better."

He said that “Meanwhile, the good performance of the food sector in 2007 did not offset the negative impacts of cooking oil producers that switched to plastic packaging. As a result, gross revenues declined some 10% to 15% compared to 2006's BRR 111 million. As such, the company is modifying idle production lines that focused on cooking oil cans to manufacture cans focused on other areas of the food industry. He added that "We also plan to develop new projects for new markets, but I can't disclose more information on the issue."

Metalgráfica Iguaçu has manufacturing facilities in the Brazilian states of Paraná and São Paulo.

Outokumpu Q4 profit slides down

Outokumpu has reported a fall in quarterly profit. Its operating profit for the fourth quarter fell to EUR 15 million from 378 million a year ago.

London Mining enters into market making agreement

London Mining announces that it has entered into a market making agreement with Kaupthing ASA, a subsidiary of Kaupthing Bank Hf, effective from January 30th 2008.

Incorporated and registered in the UK, London Mining is developing mines to supply the global steel industry. It has operational mining, exploration and development projects located in Brazil, Sierra Leone, Greenland and Mexico. In 2007, London Mining raised over USD 125 million in equity and USD 60 million in debt to finance development and expansion of its operations to meet the demand of world steel consumption.

Its core short term objectives are
1. Ramping up production to over 5 million tonnes per annum from its operating itabirite iron ore mine in Brazil
2. Bringing into production a previously mined specular hematite iron ore operation in Sierra Leone
3. Completing feasibility studies on the Wadi Sawawin project under a joint venture with the National Mining Company of Saudi Arabia
4. Completing feasibility studies on a major magnetite iron ore deposit in Greenland
5. Continuing exploration under a 49% JV or an exploration magnetite deposit in Mexico.

Gulf steel makers urged to consolidate for survival

Arabian Business reported that Gulf steel producers have been urged to consolidate in the face of growing competition from China and the falling value of the dollar.

Mr Soliman Demir chief economist for Kuwait based Gulf Investment Corporation, while speaking at speaking at the Abu Dhabi Economic Forum, said that Gulf steel producers must consolidate if they are to survive in the coming years, faced of growing competition from China and the tumbling value of the US dollar.

Mr Demir said that surging Chinese exports of cheap steel would force Gulf produces to cut prices in order to remain competitive. He said "Local producers will face an attack on prices from cheaper Chinese companies. The rising cost of raw materials linked to Gulf Arab states' currency peg to the weak dollar would increase production costs.”

Mr Demir said that the only way for Gulf companies to succeed as profit margins get squeezed would be to consolidate giving companies better platforms for negotiations and the ability to ride out cyclical downturns in the sector. He explained that "If you look at the industry in the GCC, the picture is not encouraging. You can not survive if you are small. The ten largest companies in the world represent about 27% of global steel production. Only three companies in the whole of the GCC produce more than three million tonnes per year.”

Mr Demir pointed out GCC's abundance of energy and geographical location as advantages over other steel producing nations. He said that as the leading producer of hydrocarbon based energy in the world, the GCC and wider Middle East region execute the energy intensive production process more cheaply, which would drive down costs and make them more competitive.

1st vehicle manufacturing and assembly plant launched in Jordan

Jordan Times reported that Ayass Motors has announced the launch of Jordan’s first vehicle manufacturing and assembly plant during a ceremony held last week under the patronage of His Majesty King Abdullah.

The company will start its operations by producing 5,000 vehicles during its first year and will increase its production capacity to 12,000 vehicles annually in order to compete on a local, regional and international scale. These vehicles include pickups with single and dual drive cabins, small vehicles and 4 wheel drive sport cars.

According to a press release, the vehicle plant will provide job opportunities for about 300 engineers and workers in the early stages, the majority of whom will be Jordanians who will be trained in China. In the long-run, Jordanians will replace foreign labor used in the early stages of the project.

Ayass Motors is the first Jordanian company specialized in vehicle manufacturing and assembly using the latest automotive manufacturing technologies in the Middle East, as it specializes in manufacturing a variety of vehicles under the name “Ayass Motors” according to the highest international standards.

Mr Mazen Ayass chairman of Ayass Motors acknowledged the need for high efficiency and immense production capabilities and stressed that the company has focused on developing skills and experience since the early stages of establishing Ayass Motors He said “Our overall aim is to provide our customers with high quality vehicles at competitive prices. This product is the outcome of Jordanian, Chinese and Iraqi collaboration and will be sold to customers according to Jordanian and international quality standards, providing a premium vehicle, all produced in Jordan.”

Transworld inaugurates mega logistics centre at Jafza

Al Bawaba reported that logistics and shipping solutions provider Transworld Group of Companies inaugurated of its AED 45 million state of the art mega logistics centre within the Jebel Ali Free Zone in Dubai.

Fully equipped to accommodate 23,500 pallets, the facility’s expanded warehouse will also boast of a separate temperature controlled storage centre, which can hold more up to 800 pallets. With an overall cargo capacity of over 1620 TEU and a 10.8 meter high double deep racking system, the facility also incorporates 22 loading and unloading bays with hydraulic dock levelers and large staging areas for special cargo handling.

Mr S Ramakrishnan chairman of Transworld Group of Companies said that “The Middle East is in the midst of an exciting global, regional, and local development in terms of transport and logistics due to the phenomenal growth in trade particularly between Europe and Asia, which is being driven by the region’s strategic geographic location. We intend to address the current surge in demand for outsourced logistics in Dubai through the expansion of our logistics centre in Jebel Ali Free Zone, where we are now better equipped to offer complete supply chain and distribution solutions.”

The demand for third party logistics is booming in the Middle East, thereby fuelling the number of companies supplying 3PL services in the region. This has created a competitive marketplace where customers can dictate their terms and companies must differentiate themselves from competitors in order to survive.

Competitive bidding for coal based power projects proposed

Dawn reported that a committee of several top bureaucrats and caretaker ministers was constituted by Mr Mohammedmian Soomro caretaker prime minister of Pakistan last week with minister for petroleum and natural resources as its head to take decisions on the issues related to coal based power projects.

As per report the committee has proposed the controversial international competitive bidding for tariff of coal integrated power generation projects of 1,000MW and 2,000MW. The report said that “A decision was made to float international competitive bidding for integrated coal mining and power projects of 1,000 MW to 2,000 MW.’’

The report cited a source as saying that it was also decided to adopt unorthodox approach for working up a fast track system for processing and finalization of such proposals.

The Sindh government would prepare a blueprint of the project while funds would be provided by the federal government. The federal government would be asked to provide extra water from irrigation system for this conduit.


The report added that instructions are being issued to Wapda to expedite the laying down of a transmission line to receive power, to be generated from Thar based coal-fired electric generation projects. Wapda is also being given the task to construct a conduit and canal that should be sufficient for 20,000 MW projects.

Earlier, the NEPRA had announced a tariff of 7 cents to 8 cents per unit but a private group interested in generating electricity of 1,000 MW had demanded a tariff of 11 cents per unit. The project of electricity generation from coal resource in Sindh has been delaying for the last six years and a Chinese group, Shin Hua withdrew from this project two years ago.●

ADBIC plans USD 6.5 billion investments

Reuters reported that state owned Abu Dhabi Basic Industries Corp plans to invest USD 6.5 billion to build a plastics factory and expand a steel plant, part of the emirate's drive to reduce its reliance on oil.

Mr Abdullah Saeed Al-Darmaki VP for petrochemicals at Adbic on the sidelines of an investment conference in the UAE capital told Reuters that the plastics plant will be ready next year. He said that "The investment in the plant will total AED 14 billion (USD 3.82 billion).”

Mr Hussain al-Nowais chairman of ADBIC told Reuters that it will invest a further AED 10 billion in expanding a steel plant by 50% until 2010. He said "We are creating the largest integrated steel plant in the region that will have capacity of 3 million tonnes per annum.”

Emirates Steel Industry was set up five years ago with capacity of 600,000 tonnes per year before being taken over by Adbic. Its capacity now is 2 million tonnes per year.

Phase 2 of Jebel Ali port expansion to ends in 2008 end

Gulf News reported that DP World will complete the phase two expansion of its Jebel Ali harbor Container Terminal 2 of Jebel Ali Port by the end of this year, a senior official said.

The expansion works at Container Terminal 2 will raise Jebel Ali port's handling capacity to 15 million TEUs and enable it to accommodate mega ships of more than 12,000 TEUs, which are expected to enter the industry soon.

Mr Mohammad Al Muallem senior VP and MD of DP World UAE said that it is constantly developing strategies, modernizing facilities and introducing new operational processes to meet the needs and expectations of customers. He said "We are not mere port operators, but an essential and efficient link in the supply chain.”

He highlighted the projects such as the port gate automation and the e-token service recently introduced through Dubai Trade, which enables customers to clear their containers without the need to queue at documentation counters; the security management system that recently obtained ISO 28000 certification and the new control room that permits monitoring and supervision of all operations at the port.

Mr Al Muallem noted that DP World ranks fourth in the world in managing and operating marine terminals. He said the remarkable success of being ranked among the world leaders in port operations is due to combined efforts. He said "Progressive strategic planning and focus on meeting customers' future needs are the key elements behind our success formula. We have achieved this rank by expanding our network of operations in the Indian subcontinent, Far East, the Americas, Australia and also the UAE. We have 42 terminals in 22 countries, and our future plans include 53 terminals in 27 countries."

Iranian GDP growth in H1 rises to 6.7%

Iranian media reported that as per Central Bank of Iran, Iran's economic growth reached 6.7 per cent in the first half of the Iranian year which started on March 21st 2007.

It said that "Based on preliminary estimates of the central bank, Iran's economy in the first six months of the year has continued to grow, compared to the same period last year.”

Iran, the world's fourth largest crude oil exporter, has benefited from high oil prices in recent years but is struggling with steadily climbing inflation.

OPEC decision on crude output upsets IEA

Doha Times reported that International Energy Agency has tacitly accused OPEC for increasing pressure on a vulnerable world economy by its refusal to pump more oil to help bring down crude prices.

IEA said that “While OPEC has decided to leave output unchanged, crude oil supplies remain tight as the IEA has noted for the past 6 months. Very high oil prices may be adding additional pressures to currently significant economic risks.”

OPEC members at a meeting in Vienna argued that a financial crisis triggered by the sub prime mortgage sector in the US, rather than a lack of oil, was the most pressing problem for the global economy.

The IEA represents the interests of oil consuming countries.

Turkey to move into world's top 10 economies in 15 years

Mr Ali Babacan foreign minister of Turkey recently said that Turkey expects to move into the world's top 10 economies in 15 years as it steps up major reforms and becomes a more European country.

Mr Babacan said that currently Turkey ranks 17th on the list of global economic powers. He added tat "It will be in the top 10 by the year 2023 according to our and some international organizations' projections. Turkish policy since 2002 has been to have a peaceful and prosperous neighborhood."

Mr Babacan, while attending the World Economic Forum, has stressed the Turkey's transformation over the last 5 years and its determination to continue economic, political and social reforms. He said that "For those who ask what kind of country Turkey is going to be in the next 10 to 15 years, it is going to be more and more of a European country."

Mr Babacan said that Turkey is preparing for European Union membership despite oppositions led by Mr Nicolas Sarkozy President of France, who has tried to shift the goal of talks to a lesser partnership. He added that “As a Muslim nation that is democratic, secular and multicultural, Turkey will add huge strength to the EU by expanding its cultures, ethnic groups and values and making the bloc a truly global voice, not just a Christian club. A Europe of one religion is a very dangerous approach."

He said that whether Turkey becomes an EU member will not be decided just on whether it meets EU criteria but will be a political decision as well. He added that Turkey is also preparing to become a major economic power, opening 10 embassies in sub Saharan Africa and diplomatic missions in India and elsewhere to expand its international access.

POGC and Edison agree to developed South Pars gas field

Tehran Times reported that Iran’s Pars Oil & Gas Company and Italian energy company Edison SpA has agreed on the development of South Pars gas field phase 12.

Mr Ali Vakili MD of Pars Oil said that negotiations between the two sides will be finalized soon. He added that among companies eager to invest in South Pars project, Edison is leading the field.

Talking about Pars LNG project, Mr Vakili added that Iran will not extend the June 2008 deadline for Royal Dutch Shell Plc and France’s Total. Pars LNG project was scheduled to come on stream in 2009 but has been deferred until 2011.

Mr Mohammad Javad Ahmadi Abhari director of investments and participation at National Iranian Gas Exports Company said that it plans to give half of the 40% stake held by France's Total in the Pars LNG project to potential buyers of the liquefied natural gas. He added that "Currently, 50% of the project's shares belong to the National Iranian Gas Exports Company, 40% to France's Total and 10% to Malaysia's Petronas."

66 steel makers account for 80% of Chinese steel production in 2007

It is reported that 5 top Chinese steel makers Baosteel Group, Anben Steel Group and Jiangsu Shagang Group, Tangshan Iron & Steel Group Co Ltd and Wuhan Iron & Steel (Group) Co Ltd produced 117.998 million tonnes accounting for 24.1% of China’s total steel production in 2007.

Top 66 steel makers produced 386.592 million tonnes accounting for 80% of China’s total production

2007 volume in million tonnes

1. Above 20 million club, consisting of 10 steelmakers, produced 179.970 million tonnes accounting for 36.8% share

In million tonnes

2. Above 10 million club, consisting of 13 steelmakers, produced 92.292 million tonnes accounting for 18.9% share

In million tonnes

2. Above 5 million club, consisting of 34 steelmakers, produced 100.836 million tonnes accounting for 20.6% share

In million tonnes

2. Above 1 million club, consisting of 9 steelmakers, produced 13.494 million tonnes accounting for 2.8% share

In million tonnes

BHPB bid for Rio – China reported to be looking for legal blocks

The Observer reported that Chinese government is preparing to launch an unprecedented legal challenge in a bid to block BHP's planned takeover bid for Rio Tinto.

As per report, high ranking officials from the Chinese embassy in London have approached several law firms over the past month for help in blocking the takeover and Chinese embassies elsewhere in Europe and the US are also believed to have been seeking advice on ways of blocking the takeover.

Mr Mike Pullen of law firm DLA Piper told the newspaper "Rio and BHP may not have any assets in China but the Chinese government would argue that a takeover would affect its domestic market. There's no precedent to such a challenge."

As the world's largest steel producing country, China is concerned that a combined entity would exert control over a third of the world's seaborne exports of iron ore.

Chinese HR export prices to go up due to production cuts

It is reported that Chinese hot rolled export offers were on the rise last week due to better overseas demand and short supply in the domestic market as steel producers continued to raise export prices so as to get better profit than those from domestic market.

As per reports, export offers for commercial 4.75mm to 11.5mm HRC have risen to USD 715 per tonne to USD 720 per tonne FOB from USD 705 per tonne to USD 710 per tonne FOB.

But there was little transaction at the updated levels last week as Chinese mills are not going to ink new contracts due to Chinese Spring Festival.

Shanghai based trader said "Despite good transactions in the past weeks, we would rather give up the business than to speculate at moment as market. The high prices, continuous appreciation in RMB and possible failure of inland transportation resulted from heavy snow are regarded as the major risks."

An export director with an East China based steel producer said steel makers shoot up export quotations in succession citing limited supply. There would be a sharp decrease in HRC output in February due to lack of coal and electricity, which is resulted from heavy snow.

The expected output reduction would certainly bolster the further price increase in both domestic and export market.

China to take 7 steps to ensure coal supply

At a State Council Information Office news conference a concerned official of the National Development and Reform Commission said that in the wake of the widespread disaster caused by rain, snow, and freezing temperatures, all concerned areas and departments are conscientiously implementing arrangements from the central authorities, actively fighting the disaster and assisting victims, and taking a series of measures to cope with the situation.

1 To organize well the production at coal mines and increase the supply of coal. All coal producing provinces, autonomous regions, and municipalities are actively organizing state owned key coal mines and local state owned coal mines to maintain normal production during the Spring Festival holiday period and guarantee a basic quantity of production. At the same time, they are arranging for production at other coal mines where conditions are safe. They are working hard to increase the supply of coal for the generation of electricity. The large coal enterprises Shenhua Group, China Coal Energy Group, and Datong Coal Mine Group have taken the initiative to adjust arrangements for Spring Festival vacation and will continue production during the Spring Festival period. Organizations are strengthening safe production monitoring and inspection to prevent any major production accidents.

2. To strengthen the organization of transportation and ensure that it is unimpeded. At the same time railroad organizations are carrying out rescue and relief work, they are dispatching scientifically, bypassing, stepping up the rush transport of coal for electricity generation and disaster relief supplies, and explaining the situation to delayed travelers and urging them not to make their trip. Public Security and transportation authorities are going all out to organize the reopening of roads closed by the effects of bad weather. In accordance with arrangements from the State Council, those authorities have activated a mechanism to transport live and fresh agricultural products and ensure the movement of essential vegetables, meat, and grain.

3. To arrange electricity production rationally, and ensure that the electricity grid operates safely and steadily. All electricity generating enterprises are working hard to increase stockpiles of coal for electricity generation. They are stepping up equipment maintenance and production management. They are ensuring the steady production of electricity, and ensuring a normal heat supply to residents.

4. To strengthen electricity demand-side management and implement orderly use of electricity. Certain areas which are short of electricity have already activated their orderly use of electricity plans. In accordance with the principle of "assurance and restriction," priority is going to ensuring the demand for electricity for people's lives, hospitals, schools, railroad hubs, communications facilities, financial organizations, agricultural production, and other uses which involve the interests of the masses or national security organizations. Those areas are upholding the rational and conservative use of electricity, and implementing staggered peak electricity usage. They are taking comprehensive measures to control electricity use by high energy consuming, high emission enterprises and sectors with surplus capacity.

5. To strengthen production dispatch and ensure supplies of oil and gas. Sinopec and China National Petroleum Corporation are going further in implementing all the State Council measures to ensure the supply of finished oil products. They are seeing to the production, transport, and sale of finished oil products and natural gas. They are taking convenience measures such as "green channel" refueling vehicles to ensure that their subordinate filling stations have unlimited supplies and do not impose limits or sell out, and ensure that vehicles transporting vegetables and live and fresh agricultural products can get fuel.

6. To strengthen coordinated dispatch, and earnestly support key locations. The National Development and Reform Commission and other concerned parties have activated an economic operations coordination mechanism. They have set up a system for daily reporting of monitoring and measurement information, they have stepped up dynamic monitoring and measuring of key areas and key sectors, they have strengthened comprehensive coordination of the linkage between production, transport, and demand of coal for generating electricity, they are taking electricity plants which are the backbone support to the electricity grid as their focus and going all out to ensure the supply of coal. At the same time, they have gone further in formulating and improving emergency plans.

7. To go all out in organizing disaster relief, ensuring the basic living needs of the masses. Disaster-hit areas are mobilizing all kinds of forces, working hard with concerned State Council organizations, repairing damaged roads and electricity, communications, and water supply facilities as quickly as possible, making living arrangements for the masses affected by disasters, and minimizing losses.

According to reports, to further improve the organization and leadership of coal, electricity, fuel, and transportation and disaster relief, the State Council has decided to set up an emergency command centre for coal, electricity, fuel, and transportation and disaster relief. The office of the emergency command centre has been set up at the National Development and Reform Commission.

Iron ore price negotiations – Chinese mills reduce spot purchase

It is reported that Australian ore mining giant Rio Tinto has shifted focus to Chinese traders for selling spot iron ore as it has met with strong resistance from Chinese steel mills.

As per reports, China Iron & Steel Association last week gathered leading Chinese mills to discuss countermeasures and to boycott Rio's act of reducing iron ore supplies wherein steel mills decided to withdraw from the spot market for Rio’s iron ore.

The report said that Rio Tinto has been forced to approach domestic trading houses in light of thin buying interest from the mills, and lowered the offer price by USD 20 per tonne.

In the mean time, China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has also convened a conference in Beijing urging domestic traders to halt buying spot ore from Rio Tinto and refuse any Indian ore above the ceiling price set at the meeting. The move is ended at helping Baosteel gain a bigger say in the ongoing ore talks.

Chinese coke prices to go up due to supply pressures

The latest data from Shanxi Coking Industry Association reflect that most coke manufactures plan to raise coke price this month due to the shortage of coal resource and transport and it is forecasted that increment is likely to rise CNY100.

In 2007, Shanxi province produced 98 million tonnes of coke up by 6.5% YoY and the export volume reached 9 million tonnes valued at USD 1.7 billion up by 50%YoY.

According to Mr Luo Bingsheng executive vice president of China Iron and Steel Industry Association the new round of price rise reflects the relationship between supply and demand, the coke stock of some iron and steel enterprises just can maintain three days.

Chinese SS majors increases prices for February

It is reported that Chinese SS majors have announced a price hike for February supplies

China’s biggest stainless producer, Taiyuan Iron & Steel has announced to increase prices by about CNY 200 per tonne for February 2008.

Lianzhoung Stainless Steel Corp has announced the price increase by CNY 500 per tonne for February 2008.

The move reflects the soaring prices of raw material and as such it is predicted that domestic stainless market will improve after Chinese New Year Holidays and the market demand could pick.

Chinese Rebar and Wire rod price stay firm

It is reported that Chinese domestic construction steel prices were stable last week while export offers remained firm.

On Shanghai market, HRB335 20mm rebar remained at CNY 4280 per tonne, HRB400 material at CNY 4380 per tonne. Those for commercial and hi speed wire rod are being quoted at CNY 4280 per tonne and CNY 4400 per tonne respectively.

Export price for rebar are prevailing at around USD 730 per tonne to USD 740 per tonne FOB and some steel producers have inked contracts for shipment to South East Asia. It is reported that most products will flow to Vietnam and Singapore where prices are much better than other countries of the area.

Few rebar exports to Middle East due to little profit margin and competitive cargo from Russia and Turkey. Offers destined for there have jumped to US790 per tonne to USD 800 per tonne CFR from USD 770 per tonne CFR in last two weeks. But traders who are familiar with Middle East Market indicate that conclusion price for Chinese origin rebar should be at around USD 700 per tonne FOB. People believe that Chinese cargo should be USD 30 per tonne to USD 40 per tonne lower than that from Turkey.

Turkish sources said that local steel mills are offering rebar to Europe at USD 740 per tonne to USD 750 per tonne FOB, April shipment. After successful exports of 150,000 tonne of rebar to the United States at USD 750 per tonne FOB, Turkey steel producers have been trying to raise EU bound offers to the same level. Their offers to such Middle East countries as Syria, Lebanon and Israel are a little bit lower.

While offer for wire rod is much better than that of rebar. Most producers have shoot up price to USD 780 per tonne FOB and transaction prices are reported to be at USD 750 per tonne FOB. There has been more wire rod exports recently thanks to higher market price in South East Asia. Export volume is anticipated to increase for February and March shipments.

China deploying containers for coal shipments

Xinhua reported that China has mobilized all its railway container trucks to ensure power coal transport. Their only other use is to be for moving relief materials so as to ease the power constraints plaguing the country's snow ravaged central, southern and eastern regions.

Chinese ministry of railway revealed that more than 42,200 container trucks were loaded with thermal coal on Friday up from 12,000 from the previous day. The line between Datong in coal producing province of Shanxi and Qinhuangdao, a port city in Hebei Province, a railway which is exclusively used for heavily loaded coal transport trains, also set a new daily freight record of 1 million tonnes.

The unprecedented rush for coal power transport came after China's cabinet installed an emergency command center on Friday morning to coordinate contingency measures for coal, oil and power supply, and transport and disaster relief in the country's snow hit regions.

About half the country's cargo trains, some 300,000 in all, are railway container trucks for the transport of such staple goods as minerals, building materials, timber and steel products. The Railway Ministry didn't say when the order would be stopped.

Chinese coal mines to remain open during holiday

It is reported that hundreds of Chinese coal mines that usually close for the Lunar New Year will work through the holiday this week to ease shortages. But small mines that were closed for being too dangerous will not be allowed to reopen.

The State Administration of Work Safety announced over the weekend that the country has asked some major state owned coal producers to maintain production because of the bad weather. Mines normally stop operating for up to 3 days over Chinese New Year for maintenance and allow their miners to go home for the holiday. But this year, that will be cut back to 1 day.

Mr Huang Yi spokesperson of State Administration of Work Safety said "We are urging coal mines to stay open during the Spring Festival or reschedule their maintenance plans. Statistics show at least 80% of the country's state owned coal producers will continue working during the holiday."

The administration has also said that despite the crunch, the country will not allow production to resume at the cost of safety. Mines that have been shut down for safety reasons will not be allowed to reopen.

Ukrainian exports of scrap in 2007 down by 8% YoY

Ukrainian News reported that Ukraine’s exports of ferrous scrap metals in December 2007 rose by 37.4% MoM or 11,050 tonnes as compared to 40,590 tonnes in November 2007 but down by 24.2% YoY as compared to December 2006. In December, earnings from export of ferrous scrap metals rose by 39.4% MoM or USD 3.47 million to USD 12.28 million.

Ukrainian exports of ferrous scrap metals in 2007 fell by 8% YoY or 59,100 tonnes compared to 2006 to 675,760 tonnes valued at USD 194.17 million.

In 2006, Ukraine’s exports of ferrous scrap metals fell by 41.7% YoY or 525,910 tonnes as compared to 2005 to 734,860 tonnes valued at USD 168.69 million.

Ukraine set to join WTO next week

Ukrainian Journal reported that Ukraine’s accession to the World Trade Organization was put on the agenda of the group’s General Council meeting on February 5th 2008 ending 14 years of accession talks.

Ukraine will probably be accepted to the WTO at the meeting, immediately opening way for Ukraine’s talks with the European Union over free trade.

Nigeria seeking cooperation with Ukraine in the metal industry

It is reported that Mr Oleh Skoropad Ukrainian Ambassador to Nigeria met with Mr Ahmed Gusau Minister of State for Mines and Steel Development of Nigeria on January 30th 2008 to widen cooperation in metal industry.

The ambassador informed the minister of the way the Ukrainian metallurgical sector is developing, the participation of Ukrainian specialists in the development of the same sector in Nigeria, at the metal mills in Jos and Ajaokuta in particular.

Mr Ahmed Gusau said his country has a good knowledge of Ukraine’s potential in the area of metallurgy and, therefore, considers it is necessary to develop cooperation in this particular field.

He expressed support for the project of modernization of rolling mills in Jos, which is conducted with the participation of Ukrainian investors, and indicated hope that Ukrainian specialists will be also invited to take part in the process of expanding the metallurgical complex in Ajaokuta.

Mr Ahmed Gusau said invited Ukrainian businessmen to take part in the development of mineral deposits in Nigeria, coal, zinc and lead deposits in particular, and noted that his government can give incentives to investors.

STOIC to improve coke chemical production at Severstal

FIS reported that CherMK Severstal is implementing the second phase of the modernization of the management system for its coal preparation processes for coke chemical production.

STOIC, the winner of the tender is developing project documentation, conducting assembling and startup and adjustment works of the automated system of control and management of coal dosing in coal preparation unit No 1. The system is to be put into operation at the beginning of February.

Severstal's to supply steel to Hyundai Motors

It is reported that Severstal is in t