FIMI calls for abolition of export duty on iron ore

PTI reported that Federation of Indian Mineral Industries has reiterated its demand to the centre for abolishing export duty on iron ore and iron ore fines.

The report cited a FIMI representative as saying that the existing export duty of INR 300 per tonne being levied on iron ore and INR 50 on iron ore fines should be abolished forthwith to enable the industry compete with Australia and Brazil. He added that “We feel spot prices will vanish in the next one year and it will be long term prices, which would be in the range of about USD 70 per tonne.”

Mr Poddar a FIMI representative said that, while Australia and Brazil were spending billions of dollars in exploration activities, which included fast track reconnaissance permit, exploration licenses, availability of sophisticated aerial survey and others, Indian industry was facing several problems including on the infrastructure front. He added that in Karnataka mine owners faced problems from officials who refuse to issue permits to transport iron ore even to legal license holders.

Mr Poddar also said that FIMI and the Karnataka government had decided to develop Tadri port in Uttara Kannada district under a public private partnership with INR 1,000 crore investment. The state government was expected to clear the project in about 2 months.

Survey work for POSCO deferred

SNS reported that survey teams which had gone to Gadakujang panchayat in Orissa to resume work for the proposed POSCO India steel plant today, failed to carry out any work due to differences among the members of the united action committee and a tussle over award of a contract.

Initially, the UAC had told the district administration that it will cooperate and allow survey work to take place. But at a meeting held by the villagers of Nuagaon, serious differences cropped up among the member. Some of the locals alleged that work for placing poles and markers had been given to a Bhubaneswar based contractor, ignoring the claims of the locals.

The report cited Mr Nirvya Samantray a UAC member as saying that the contract agency had stocked up poles illegally for demarcation of land. A few others raked up the land valuation and compensation rate issue at the meeting.

The district collector Mr Pramoda Kumar Meherda, the additional district magistrate of Paradip Mr Dillip Mohanty, the district rehabilitation officer Mr Surjeet Das, the Kujang tehsildar Mr Debasish Singh and other officials once again met the villagers of Gadakujang at the panchayat office to seek their cooperation. The survey would resume from February 7th 2008.

The sarpanch of Nuagaon panchayat Mr Bhaskar Swain admitted that the meeting hampered the resumption of survey work. However, he said that a meeting would be held tomorrow between UAC members and the villagers to try and resolve the relevant issues and pave the way for survey work.

JSW Steel posts 13% growth in crude steel production in January

JSW Steel Limited has posted the highest ever crude steel production with 13% YoY growth in January 2008. It has also achieved the highest production in HR Coils and HR plate segments with 4% YoY and 54% YoY growth respectively.

The break up of product wise production is as below

In tonnes

TATA Power secures financing for Maithon power project

TATA Power Company Limited has announced that Maithon Power Limited, a 74:26 JV of TATA Power and Damodar Valley Corporation, has achieved financial closure for its 1,050 MW coal based thermal power project in Dhanbad district of Jharkhand. The project estimated to cost INR 4,450 crore, is being funded on a debt equity ratio of 70:30. The debt for the project is INR 3,115 crore and is being financed by various banks led by State Bank of India.

SBI Capital Markets is the sole financial advisor and arranger of debt for the project. The syndication was over subscribed by nearly INR 1,050 crore with the State Bank of India Group, taking the largest exposure to the tune of INR 1000 crore. The consortium of 17 banks, led by SBI include Allahabad Bank, Bank of Baroda, Canara Bank, Central Bank, Dena Bank, Indian Overseas Bank, J&K Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Tamilnadu Mercantile Bank, UCO bank and more.

Speaking on the occasion, Mr Prasad R Menon MD of TATA Power said that "The closure of financing for Maithon project is an important milestone. The attractive financing demonstrates the faith of the tenders in the promoters, their execution capabilities and expertise to complete the project in time. The unique terms of debt financing provides us more flexibility in the execution of the project as well as help in controlling costs."

MPL has also signed power purchase agreements with DVC for 300 MW and is the lowest bidder for 309 MW power requirements for distribution licensees of Delhi. It has obtained open access from Power Grid Corporation of India to transmit power through their infrastructure to the power deficit northern states.

Maithon Power Limited has obtained all major clearances and permits for the project. The site preparatory works are in progress and orders for main equipment have been placed. The long term coal linkage has been allotted from the nearby Bharat Coking Coal Limited mines and water allocation is from the adjacent Maithon reservoir. The project will comprise two generating units of which the first unit of 525 MW is expected to be commissioned by October 2010 and the second unit by March 2011.

KEC International forms JV with Power Engineers

It is reported that KEC International along with north American engineering company Power Engineers has formed a 50:50 JV company power KEC Power.

Power Engineers will provide technical assistance to KEC's new projects, while KEC International will supply towers. KEC will bid for transmission EPC business for power transmission projects in the North American market through KEC Power.

Recently, KEC had also announced that, its group companies RPG Transmission & National Information Technologies have merged into KEC International. Also, its investment division will be de-merged into a new company, which will be listed on the exchange. The merger will result in KEC becoming the largest transmission company globally with total tower manufacturing capacity of 161,000 tonnes per annum. RPGT has a surplus capacity of about 15,000 tonnes per annum, which will be utilized by KEC for its requirements in the international markets.

Also, KEC will be able to bring down overall costs and the merger will help the company to operate in various verticals such as telecom, railways related businesses, power transmission and rural electrification.

Japan to fund hydro power projects in India - Report

It is reported that Japan Bank of International Cooperation has evinced interest in giving development assistance loan to hydro power projects in India and has already initiated a study to identify potential projects for funding through its annual budgetary appropriations.

The funding agency is planning to engage consultants, comprising Japanese and Indian professionals, who will closely review the candidate projects that have so far been identified by the centre. The consultants will evaluate projects on basis of technical, social, environmental and economic considerations and will undertake detailed site surveys.

Centre has already taken a proactive policy to encourage more investments in the hydro sector and has recently passed a new hydro policy, in an effort to attract assistance from multilateral and other financial institutions, both domestic and international.

The study team will include experts in the field of civil design, geology and hydro power planning, hydrology specialists, economics, electricity specialists, power system specialists, environment and CDM specialists and development policy specialists will also be part of the expert team. The study report is expected to be ready by March 2008 and the final report is due for submission by June 2008.

The executing agencies and other relevant organizations, such as the power ministry, will undertake to furnish the study team with all relevant data, information and documents as and when required. They will also assign counterpart personnel and ensure issuance of entry permits necessary for the study team members to conduct field surveys.

Madhya Pradesh to invest INR 475 crore in power transmission

Madhya Pradesh government has decided to spend INR 475 crore to bring about qualitative changes in supply system and consolidate power transmission system by end 2008 work has already got underway at a cost of INR 214 crore.

Under this program, four 220 kV capacity sub stations will be installed each at Sidhi, Mandideep, Pipariya and Barod in the state. Similarly, after exact assessment of demand and supply, 12 new sub stations of 132 kV were also being carried out. These include sub stations at Khajuraho, Porsa, Katra, Mauganj, Byohari, Benigaon, Chanderi, Majhgawan, Ghosla, Nainpur, Chhanera and Ghairatganj.

It has also been decided to install additional transformers at 18 problem infested sub stations to ensure uninterrupted power supply. An amount of INR 189 crore will be spent on establishment of new sub stations and installation of additional transformers and existing sub stations. The 400 kV power lines will be extended in 294 circuit kilometer area and a net of 220 kV electricity line will also be spread in 577.78 circuit kilometer area.

Prakash Industries inks MoU with Chhattisgarh for 600 MW power plant

It is reported that Prakash Industries has entered into a MoU with the Chhattisgarh government to establish and operate a 600 MW thermal power plant.

The INR 2,400 crore project may be implemented by the company or by a special purpose vehicle formed for this purpose. It is expected to be operational within a period of 3 to 4 years and will be financed through a mix of equity and debt. The state government will assist the company in allotment of a captive coal block for the project.

Jindal Saw bags waste based power plant order in New Delhi

BS reported that Jindal Saw has bagged a contract worth INR 200 crore from New Delhi Waste Processing Co for setting up a 16 MW waste based power plant. NDWPCL outbid 29 companies such as TATA Power, Veolia Environmental Services of North America, GMR Group and Spain based Acciona Group among others for the proposed project. Its subsidiary Jindal Urban Infrastructure Limited will implement the project.

It has already identified land at Timarpur and will begin the construction work from February 20th 2008. It is currently in negotiations with companies for procuring equipment. The plant will run on around 6,000 tonnes to 8,000 tonnes of waste that is generated per day in Delhi and the raw material will be supplied to the company by New Delhi Municipal Corporation and Municipal Corporation of Delhi. The entire production from the plant will go to Delhi at INR 250,000 a kWh and the power plant is likely to go on stream by February 2010.

New Delhi Waste Processing Co Limited is a company jointly setup by GNCTD through Delhi Power Company Limited, IL&FS through UWPC and APTDC to facilitate development and implementation of waste processing projects in Delhi.

Jindal Saw Limited sees the urban infrastructure projects contributing a greater share of its revenue in the next 5 years as India increases spending on infrastructure projects to sustain high level of economic growth.

RIL to set up 51:49 JV with GMDC for lignite gasification plant

BL reported that Reliance Industries Limited and Gujarat Mineral Development Corporation are planning to set up a 51:49 JV company to undertake lignite gasification in Gujarat and Rajasthan by March 2008.

The two companies have identified 5 sites in Gujarat and 2 in Rajasthan where deep seated lignite is proposed to be converted into gas. Thereafter, the company will start exploration and drilling to confirm the presence of lignite that could be converted into gas.

The initial outlay for the new JV will be around INR 100 crore and exploration and pilot burns at the 7 locations will involve an investment of about INR 400 crore.

ONGC to set up 2,000 MW wind energy project in Karnataka

After successfully starting its pilot wind energy project in Gujarat, Oil & Natural Gas Corporation is now planning to invite bids for its second pilot project in Karnataka. It will float tenders in June or July 2008 for the project, where it plans to invest INR 300 crore.

ONGC plans to generate 1000 MW to 2000 MW from wind energy after the successful completion of these projects, which location will be finalized at a later stage. It is likely to sell the power produced from the project in Karnataka itself.

ONGC had recently entered the wind energy sector by signing an agreement with Suzlon Energy for its pilot project in Gujarat to produce 50 MW for own consumption. The total cost of the Gujarat project is INR 307 crore. Power produced from this project would be taken to ONGC’s installations though an arrangement with the Gujarat Electricity Board.

ONGC will set up 34 turbine machines, each having a capacity to produce 1.5 MW, at both the wind farms in Gujarat and Karnataka. It has roped in consultants MP Wind Farms and IL&FS for executing these projects.

Mr Anoop Kumar group GM of ONGC said that while the Gujarat project would be completed in May or June 2008, the Karnataka plant was likely to be completed in March 2009. He added that “These projects are an initiative of ONGC towards fulfilling its commitment to generate environment friendly and pollution free energy from renewable sources.”

ONGC, which produces 84% of India’s crude oil and natural gas, is the first public sector company to enter the wind energy sector.

Suryachakra inks MoU with Chattisgarh for power project

Suryachakra Power Corporation Limited has announced that it has entered into MoU with Chhattisgarh State Electricity Board for setting up of 270 MW thermal power project with an investment of approximately INR 1,100 crore.

Port workers criticize cabinet decision on DA

All India Port & Dock Workers Federation has criticized the decision of the cabinet to grant benefit of merger of 50% dearness allowance with basic pay with effect from January 1st 2007 instead of January 1st 2005.

Mr SR Kulkarni president of the federation has criticized the government’s move of granting the benefit of merger of DA to the employees of public sector undertakings that are profit making only. He said that “The pay structure, dearness allowance, HRA etc of the employees of the port trusts and dock labor boards have been evolved on the lines on which the wage structure of the central government employees were revised.”

TATA Power submits EIA for 1,000 MW Orissa power project

TATA Power Company has submitted the environment impact assessment report to state pollution control board for its proposed 1,000 MW coal based power plant at Naraj Marthapur in Cuttack district of Orissa.

The project will be spread over 990 acres of land located adjacent to an existing road connecting Khurda and Naraj villages. The coal requirement is pegged at 16,368 tonnes per annum and will be supplied from the Talcher coalfields. The water requirement which is estimated at 96,684 cubic meters per day and will be sourced from the Mahanadi river.

On the pollution control front, TATA Power Company will install electrostatic precipitators with 99.9% efficiency at the plant to keep suspended particulate matter under control.

The proposed power plant when completed is likely to meet the power requirements of the upcoming TATA steel plant at Kalinganagar in Orissa. However, only 500 MW of power from the proposed project will be used to power the steel plant operations, while the remaining 500 MW will be available for open market transactions.

STC profit in 9 months up by 40% YoY

Dr Arvind Pandalai CMD of State Trading Corporation of India Limited has presented a dividend cheque of INR 9.56 crore towards the interim dividend of 35% for 2007-08 to Mr Kamal Nath union minister of commerce & industry.

During April to December 2007 period, STC has achieved an impressive increase of over 40% YoY in profit over the corresponding period of the previous year. The total turnover has also crossed INR 11000 crore mark, surpassing the proportionate MoU target by 48%. Its exports grew up by over 60% YoY to reach past INR 3000 crore due to higher sales of chemicals & pharmaceuticals, gold jewellery, steel raw materials and iron ore. Total imports at INR 7424 crore exceeded the proportionate MoU target by 36%. Imports of bullion, hydrocarbons, minerals, metals, petro chemicals and pulses significantly grew over previous year.

STC is soon planning to enter into the field of bio fuels and has already signed a MoU with an Indian company in the field of Jatropha breeding or cultivation and identification of suitable strains of micro algae, the production of biofuels. Under the MoU, STC shall arrange sale of all Jatropha planting material and allied products or services of the partner company. Discussions are being held with a number of international companies having bio fuel refineries in the area of Jatropha plantation.

Broekman Group plans automotive terminal in South India

Projects Today reported that Netherlands based Broekman Group will set up an automotive terminal, warehousing and physical distribution centres, as part of its expansion plans in India.

The quantum of investment in the terminal for handling cars, to come up near Sulurpet on the Tamil Nadu and Andhra border, is yet to be finalized. The automotive terminal will cater to the demands of automobile manufacturers in and around Chennai. It will also offer a complete package of services aimed at providing on-time delivery of cars from manufacturers to their customers, the importers and distributors.

Warehousing and distribution centers will come up in Bangalore near the new airport and at Chennai with a total space of 10,000 square feet each. Both these centers is expected to be fully functional by 2009.

Rajasthan finalizing new industrial policy soon for

It is reported that Rajasthan government is in the process finalizing a new industrial policy to give impetus to industrial progress in the state. The draft policy is being prepared and consultations were being held to give more incentives to attract investors in the state.

CIL CCL to set up engineering college at Ranchi

Mr RP Ritolia CMD of CIL's Central Coalfields Limited said that a MoU for setting up an engineering college in Ranchi will be signed with the DAV group soon. H e added that the details of the MoU were being worked out under the guidance of the board of directors and a meeting has already been held with the DAV management in this regard.

CCL would provide the needed for the college, to be run by the DAV group. DAV group has been asked to prepare a detailed project report.

The union coal ministry has directed all the subsidiaries of CIL to set up engineering colleges in their command areas.

BHPB bid for Rio – Revised bid launched

The board of BHP Billiton announced an offer for all of the shares in Rio Tinto Limited and Rio Tinto plc. As per announcement, BHP Billiton’s offer will deliver to Rio Tinto shareholders
1. 3.4 BHP Billiton shares for each Rio Tinto share
2. Approximately 44% of the Enlarged Group compared with approximately 36% based on the market capitalizations of the companies prior to the approach by BHP Billiton to Rio Tinto on 1 November 2007
3. A 45% premium to the Rio Tinto share price prior to the approach.

The Offers contain a minimum acceptance condition requiring acceptances relating to more than 50% of the publicly held shares in each of Rio Tinto Limited and Rio Tinto plc. BHP Billiton also proposes a buy back of up to USD 30 billion within one year of completing the Acquisition if its 3.4 for one offer is successful.

BHPB said that the combination of BHP Billiton and Rio Tinto will create the world’s premier diversified natural resources company with a unique opportunity to unlock value for shareholders
1. Unparalleled exposure to the same key mineral basins will create significant value by optimizing production efficiencies and delivering greater volumes on an accelerated basis to meet growing demand;
2. Creation of substantial value through quantified synergies and benefits which are expected to contribute a total incremental EBITDA of US$3.7 billion nominal per annum within seven years of completion of the Acquisition;
3. Efficient development of the next generation of large-scale projects in new regions for the benefit of its customers, the communities in which it operates, and its shareholders
4. A world class management and operational team with strength and depth across all levels of the organization with a commitment to the pursuit of excellence and the highest standards in safety and sustainability and a focus on global best practice in community and the environment.

Mr Don Argus chairman of BHP Billiton said "This combination of two industry leading companies provides a unique opportunity to create a truly unparalleled resources company. Whilst both BHP Billiton and Rio Tinto have proven strategies and excellent future growth prospects on a stand-alone basis, a combined entity would be able to unlock significant additional value for both sets of shareholders and be in an unparalleled position to capitalize on future opportunities. BHP Billiton and Rio Tinto already share many important characteristics such as an overriding commitment to safety, community and sustainability. We are firmly of the view that the terms of the offer announced today are compelling and reflect our absolute conviction in the strength of this combination which has convinced us to make this offer directly to Rio Tinto’s shareholders."

On November 8th 2007 BHP Billiton announced it had approached Rio Tinto on November 1st 2007 to propose combining the groups through two inter conditional schemes of arrangement. Extensive consultations with the shareholders and stakeholders of both Rio Tinto and BHP Billiton have indicated a clear understanding of the industrial logic of such a combination and assisted BHP Billiton in determining the terms of the Offers being made today to the shareholders of Rio Tinto. These terms represent compelling value for Rio Tinto shareholders and a substantial increase over the initial proposal made to the Board of Rio Tinto. Since November 1st 2007 BHP Billiton has continued to seek the support and recommendation of the Board of Rio Tinto. However, to date, Rio Tinto has refused to enter into discussions with BHP Billiton and, as a result, BHP Billiton now believes it is appropriate to make an offer directly to Rio Tinto shareholders and is today announcing the terms of its Offers which represent a significant improvement to the terms of the proposal made to the Board of Rio Tinto in November.

Both BHP Billiton and Rio Tinto are dual listed companies with separate listed parent entities in the United Kingdom BHP Billiton Plc and Rio Tinto plc and Australia BHP Billiton Limited and Rio Tinto Limited). BHP Billiton Limited is making inter conditional Offers for all of the Rio Tinto plc and Rio Tinto Limited shares.

Vale Xstrata tie up - CDB may buy Glencore stake in Xstrata

UK Telegraph reported that under China's wider strategy to block mining mergers, China Development Bank, a policy lender and one of the largest state owned banks in China, is in talks with Swiss commodities trader Glencore about purchasing its 34.6% stake in Xstrata in a deal estimated at GBP 14 billion.

China Development Bank, which also sealed a deal on Monday to work on developing new mines with Anglo American, fears that a headlong rush to forge a few gigantic mining groups would further boost commodity prices for China, the biggest buyer of metals. The move implies Chinese companies are more willing to directly take part in strengthening commodities sector to ensure supply of key resources such as iron ore, and of the country's increasing willingness to intervene on the world's stage.

Anyone buying Glencore's major holding in Xstrata could block a possible takeover of Xstrata by Brazil's Vale, which has said it was considering such a move. Controlling shareholders of Vale last week approved a study of a takeover bid for Xstrata to see if its viable.

BHP Billiton H1 net profit down by 2.4% YoY

The world's biggest mining group, BHP Billiton Ltd announced that its H1 net profit fell by 2.4% YoY to USD 6.017 billion. Its underlying earnings before interest and tax were USD 9.6 billion up by 5.4% YoY with record half year results in its iron ore, petroleum and manganese businesses.

(In USD million)

BHPB result for the H1 of 2007
1. Underlying EBITDA of USD 11.2 billion and Underlying EBIT of USD 9.6 billion up by 6.4% and 5.4% respectively.

2. Attributable profit of USD 6.0 billion down by 2.8% and EPS of 106.8 US cents up by 2.8%, with EPS benefiting from share buy backs (both measures excluding exceptionals).

3. Net operating cash flows of USD 7.9 billion up by 10.6%.

4. Record half year production from seven commodities with significant increases in another six.

5. Costs, net of non cash costs, increased 1.9%, an outstanding achievement in the current environment.

6. Record half year results for Iron Ore, Petroleum and Manganese.

7. Seven major projects completed and a further four projects approved. Significant volume growth expected in H2 of 2008 in high margin commodities.

8. Interim dividend up 45% to 29 US cents per share, demonstrating confidence in our cash generating ability and strategy.

9. USD 8.8 billion of a USD 13.0 billion capital management program completed, representing 6.5% (3) of total issued shares.


The group in a statement said that “This result has been achieved in an environment in which input prices have increased significantly and currencies have appreciated strongly.”

First half input costs rose by 1.9%, driven by higher prices for raw materials, fuel, energy and labors. However, Mr Alex Vanselow CFO of BHPB pointed out that this was the lowest rate of increase in half year costs reported by the group since cost pressures began to bite in 2005.

Mr Marius Kloppers CEO of BHPB said that, despite global market volatility, he remained absolutely convinced that the growth fundamentals in emerging economies would continue to drive demand for the groups' products.

ArcelorMittal increases flat product prices for Europe

Areclor Mittal after having kept steel prices stable for 9 months, flat carbon steel prices will increase by 12% to 15 %, establishing a new base price level of EUR 560 per tonne for hot band. For Commercial Grade Plates a price increase of EUR 50 per tonne will apply.

The release said that further price increases might be necessary in the course of the 2nd Quarter and will be announced as soon as the final outcome of the ongoing annual raw material price negotiations is known.

With this move ArcelorMittal realigns the price level of its European flat products to recent global price developments, where steel has seen increases of USD 100 short ton to USD 180 short ton in response to the cost increases for raw materials, energy and logistics.

Mr Patrick Depardon VP sales and marketing of ArcelorMittal Flat Carbon Europe said that "This is consistent with what we had already announced 3 months ago. Simultaneously, we are responding to the consistently high demand for steel in all parts of Europe. We have taken all measures such as the restart of the Blast Furnace No.6 in Seraing to satisfy the strong requirement for volumes from our customers.”

Explosion at Acindar BF injures 8

Bloomberg reported that an explosion at an Argentine steel plant owned by a unit of ArcelorMittal has left eight people injured.

Mr Carlos Vaccaro a spokesman for Acindar Industria Argentina de Aceros SA said that the explosion occurred at about 10 AM local time in a blast furnace that was being repaired. Two workers were taken to the nearby city of Rosario for treatment of burns, while most of the other victims were treated and released from medical facilities.

He added that “The rest of the plant is operating normally.''

The steel plant in Argentina's Santa Fe province continues to operate without the use of one of its blast furnaces, which was undergoing maintenance when the accident occurred.

Rio Tinto discovers 1 billion tonnes at Chapudi in SA

Rio Tinto announced that it has further strengthened its presence in South Africa with the discovery of a open pittable coal resource of 1.04 billion tonnes in the Limpopo Province. The coal is bituminous, and is suitable for generating electricity.

The discovery at Chapudi came through Rio Tinto's coal exploration program in the Limpopo coal basin of South Africa. The exploration work has been conducted in conjunction with Rio Tinto's BEE partner, Kwezi Mining. Exploration rights over the resource are held by two JV companies; Chapudi Coal PTY Ltd (Rio Tinto 70%) and Kwezi Mining Exploration PTY Ltd (Rio Tinto 49%).

Rio Tinto and Kwezi are continuing with exploration activities for thermal and coking coal east of the Chapudi project.

Mr Preston Chiaro CEO of Rio Tinto Energy & Minerals said that "This is a significant find in an area that has previously been viewed as having little geological potential. The project's potential to produce thermal coal for electricity generation comes at a time when South Africa needs to rapidly increase its generating capacity. In addition, the basin offers the opportunity to produce a range of products, from thermal to hard coking coal for the export markets. We are currently planning the next phase of the project by beginning our pre feasibility studies."

Mexican miners call off strike at AHMSA

Reuters reported that Mexican miners agreed to a 9% pay increase at two mines owned by AHMSA, Mexico's third largest steel company, avoiding a strike planned for Wednesday.

Mr Carlos Pavon a union spokesman told Reuters that "There will be no strike they agreed to 9%plus benefits.” He added that many Mexican mining companies are negotiating new contracts with workers demanding pay increases they see as justified by high metals prices.

Mr Pavon said that the union has also threatened to lay down tools at Penolesgiant silver refinery on Friday if a similar pay agreement is not reached. He added that miners seeking higher wages are currently on strike at the giant Penoles owned Naica lead mine in the northern state of Chihuahua.

The national mining chamber has said that a series of strikes over the past two years has cost Mexico's mining sector an estimated USD 2.4 billion.

BHPB bid for Rio - Rio Tinto notes pre-conditional offer

Rio Tinto announced that it has noted the announcement by BHP Billiton of its intention to make offers to acquire the whole of the issued share capital of Rio Tinto plc at an exchange ratio of 3.4 BHP Billiton shares per Rio Tinto plc share, consisting of 80% BHP Billiton plc shares and 20% BHP Billiton Limited shares and the whole of the issued share capital of Rio Tinto Limited at an exchange ratio of 3.4 BHP Billiton Limited shares per Rio Tinto Limited share.

Mr Paul Skinner chairman of Rio Tinto said "The Boards of Rio Tinto will consider the terms of the proposal carefully in the light of all circumstances and will make a further statement once they have completed this assessment. In the meantime, the Boards encourage shareholders not to take any action."

The release added that the offers are subject to pre conditions relating to merger control and regulatory approvals in a number of jurisdictions.

MEPS forecast on Asian carbon steel prices

UK based MEPS said that “In the flat products sector, recent changes to export taxes in China are expected to result in price advances over the coming months across Asia.” MEPS added that “The anticipated hike in iron ore and coal costs is also forecast to push regional transaction values higher. Domestic production cuts are expected to continue reducing inventories in Japan. This should help Japanese steelmakers lift prices in the second quarter. Asian average transaction figures for most flat products are forecast to reach new record highs by the middle of 2008. Cold rolled coil figures are not expected to move above the record peak due to weaker market conditions.”

MEPS said that “Excess capacity in China is expected to grow further as the year progresses. Lower demand from the EU and US is also anticipated due to economic slowdowns in these regions. This will exacerbate the oversupply problem further. As such, a downturn in Asian steel prices is forecast for the second half of 2008. However, smaller declines in hot rolled plate transaction values are predicted due to strong consumption from the energy and construction industries. Despite this downturn, 2008 average prices are expected to show significant gains over 2007 figures. Rises of between 3% and 18% are envisaged for the yearly average values across the product range. Coated coil prices are forecast to be at the bottom of this scale due to soft demand from the appliance and auto industries.”

MEPS added that “Large advances across all long products are forecast for the next few months due to rising scrap, energy and billet costs. Increases in the Chinese export tax should also lead to higher import prices in the short term across the region. Strong demand in South Korea and Taiwan is likely to result in prices moving up further in these two countries. However, Asian average prices should be tempered somewhat by low demand in China and Japan. Medium sections and merchant bar transaction figures should record more significant price growth due to strong consumption for these products.”

MEPS further added that “Selling values are expected to turn down in the middle of the year and into the third quarter. Seasonally lower demand and excess supply are likely to cause a dip in prices. However, transaction figures should hold up above current levels as mills attempt to pass on escalating input costs.”

Vallourec Q4 sales up by 13.1% YoY

Reuters reported that French steel tube maker Vallourec fourth quarter 2007 sales rose by 13.1% YoY and it expected volume and underlying revenue to remain steady this year.

Vallourec in a statement, the company, which has been subject to frequent takeover speculation, said sales in October to December 2007 rose to EUR 1.63 billion from EUR 1.44 billion in October to December 2006. That helped lift full year sales 10.8% to EUR 6.14 billion.

Vallourec said that volume rose by 0.1 in 2007, with the increase in sales being driven mainly by a more favourable product and price mix. Vallourec said that "On the basis of current market conditions, Vallourec expects that in 2008 its plants shall continue to operate at high capacity and produce similar volumes to those of 2007.”

It added that "Despite the current level of the US dollar, 2008 sales area expected, on a comparable basis, to be in line with those of 2007.”

BHPB bid for Rio – Developments so far

Following is a chronology of the bid.

October 5th 2007 - Rio Tinto declines BHP Bid rumors
Rio Tinto has quashed market speculation it had received a takeover offer from its larger rival BHP Billiton after its share price surged to a record amid market rumors of an approach. Rio Tinto shares closed at AUD 5.8 higher or 6.5% to AUD 95.5, after hitting a record AUD 99.69 in afternoon trade on Wednesday.

November 8th 2007- BHPB makes big bang bid for Rio
Coinciding with Indian festival of lights and crackers, BHP Billiton has made Big Bang by launching a massive AUD 272.05 billion takeover bid for its Anglo Australian mining rival Rio Tinto in what could be one of the world's biggest merger deals

November 9th 2007 - Makes Chinese steel makers jittery
China’s steel industry was less than thrilled to wake up yesterday and find it might soon be wrestling with two giant iron ore suppliers rather than three in the tightest iron ore market the modern world has seen.

November 10th 2007 - Citigroup to give USD 70 billion to BHPB
Financial Times reported that BHP Billiton has arranged a USD 70 billion financing package through Citigroup to strengthen its USD 140 billion takeover approach for rival miner Rio Tinto Group.
November 10th 2007 - Chinese bank builds stake in Rio
FT reported that an arm of the Chinese state has taken a secret stake in Rio Tinto. As per report the stake is bought in the past week by China Development Bank, which is backed by the Communist government in China. As per report, the stake is believed to be less than 1%.

November 12th 2007 – BHPB highlights value of proposal
BHPB outline its takeover plan, arguing that merger would result in USD 3.7 billion in synergies in seven years and promises to hand back USD 30 billion to shareholders via a share buyback if the deal goes through. Rio said that the bid remained out of the ballpark

November 12th 2007 - Makes Japanese and Korean uncomfortable
It was reported that Japanese and Korean steel makers are shuddering at the prospect of a BHP Billiton Rio Tinto merger, even as they brace for separate mauling from the dominant Australian iron ore and coking

November 15th 2007 - UBS takes 5% stake in Rio Tinto
The takeover war between mining giants BHP Billiton and Rio Tinto continues with news of Swiss bank UBS and its affiliates grabbing a 5% stake in Rio. BHPB talked it up as hedge fund buying, while the Rio dismissed the substantial shareholder notice as reflecting previous purchases.

November 15th 2007 – CDB denies buying Rio stake
China Development Bank has denied a report in German daily Handelsblatt that it is involved in buying a stake in mining company Rio Tinto PLC. Ms Yang Hua, a spokeswoman at the Chinese policy bank said in response to the report said that "There's is no such thing.”

November 16th 2007 - CVRD welcomes the idea
It is reported that Brazilian mining giant and world’s biggest producer of iron ore CVRD sees a possible takeover of rival Rio Tinto by world's biggest miner BHP Billiton as a good thing for the industry that will not threaten CVRD's dominance in the iron ore market.

November 17th 2007 - Merger not to effect ArcelorMittal
Times recently reported that Mr LN Mittal president & CEO of ArcelorMittal said that the prospect of a merger between Rio Tinto and BHP Billiton would not affect his company and that any merger is an endorsement for ArcelorMittal’s strategy of vertical integration.

November 17th 2007 - S&P put BHPB on credit watch
Despite rejection from Rio’s board, Standard & Poor’s said that it has placed BHPB on credit watch with negative implications amid the prospect of a revised bid. S&P placed BHP’s A-plus/A-1 ratings on credit watch with negative implication while putting Rio Tinto’s BBB+/A-2 credit rating and associated debt on watch with positive implications.

November 18th 2007- BHP claims support from Rio shareholders
BHP Billiton claimed that shareholders were supportive of its proposed mining mega-merger with Rio Tinto. Mr Marius Kloppers CEO of BHPB head, while speaking in South Africa, which he is visiting as part of a global road show to sell the group’s proposed merger plans, said that the investors in both Rio and BHP he had met so far had been broadly supportive of the rationale behind the deal.

November 18th 2007 - IISI calls for strict review
The International Iron and Steel Institute yesterday has issued a formal request that all relevant competition authorities review the proposed alliance between BHP and Rio Tinto.

November 20th 2007 - JISF slams the move
Japan Iron and Steel Federation has come out in open against BHPB’s move to merge with Rio TintoMr Hajime Bada chairman of the Japan Iron and Steel Federation told a news conference that a melding of two of the largest raw materials suppliers, BHP Billiton PLC and Rio Tinto PLC, is undesirable for industrial competition and pricing.

November 20th 2007– POSCO and Hyundai show concerns
It is reported that the two biggest South Korean customers for BHP Billiton's iron ore, POSCO and Hyundai Steel said that they do not approve of its merger plans with Rio Tinto.

November 20th 2007 –CISA joins the opposition group
China Iron and Steel Association published a commentary in which it judged that the merger would create an even bigger monopoly. CISA said “The merger is not good for global steel companies. Iron ore production over concentration will not be helpful for the long term development of normal trade.”

November 21st 2007 - Mr Kiernan voices support
It is reported that mining entrepreneur Mr Michael Kiernan has come out in support of BHP Billiton's bid for Rio Tinto. Mr Kiernan said that a combined BHP and Rio would create more stability in international commodity prices, rather than pushing them higher.

November 21st 2007 – UBS and Deutsche Bank join the battle
Reuters reported that UBS have joined the army of advisers lined up by BHP Billiton for its takeover bid for Rio Tinto and Deutsche Bank has been engaged by Rio to ward off the threat.

November 26th 2007 - Rio rebuffs BHPB offer as undervalued
Rio Tinto Ltd Rio laid out new justifications for rejecting a USD 150 billion takeover bid from rival BHP Billiton Ltd. Mr Tom Albanese CEO of Rio Tinto said that the full value of the company's assets was yet to be reflected in the market.

November 26th 2007 - Chinese steelmakers deny bid for Rio
China Iron & Steel Association and officials from first tier Chinese steelmakers said they are unaware of the report about their participation with China Investment Corp to make a rival bid for the world's third largest miner.

November 27th 2007 - German steelmakers oppose the move
German steelmakers urged Brussels on Tuesday to block miner BHP Billiton's planned takeover of rival Rio Tinto that would create a USD 350 billion plus industry giant. Mr Dieter Ameling president of German Steel Federation said that "This merger between the iron ore market's world number two and three would further raise the pressure on iron ore prices. It would limit the steel industry's access to the raw material. That kind of market dominance doesn't allow practically any leeway during price negotiations.”

November 28th 2007 –BHPB confident of its logic
BHP Billiton said that most investors and many customers see the logic in its offer for Rio Tinto Group and that it is unlikely to be matched by any rival. Mr Marius Kloppers CEO of BHPB in a speech to shareholders in Adelaide said that “The bottom line here is simple. These two companies are worth more together than apart. It is not a question of us needing them or them needing us. The proposed combination would cut costs and deliver more raw materials faster to customers to feed surging demand from China and India.”

November 28th 2007 - Seven banks funding BHPB
As per media reports, 7 banks are financing BHP Billiton's bid for rival Rio Tinto with a loan of up to USD 70 billion rather than 5 banks as per earlier reports. The financing is being led by coordinator Goldman Sachs and mandated lead arrangers include Barclays, BNP Paribas, Citigroup, HSBC, Santander and UBS.

December 2nd 2007 – Rio sees BHP approach below value
Mr Tom Albanese CEO of Rio Tinto while speaking to investors in Australia on Sunday, declined to put a value on Rio, but reiterated the company's stance that the all share offer did not recognize the miner's future prospects.

December 3rd 2007 – TATA Corus CEO slams the move
It is reported that Mr Philippe Varin CEO of TATA Corus strongly criticized BHP Billiton's attempt to take over mining rival Rio Tinto by saying that it would be a huge blow to competition. Mr Varin during a conference organized by Metal Bulletin and World Steel Dynamics in Paris said that "I would expect that the anti trust authorities, be it in New York in the US, in Japan, in China or wherever, will take some position to prevent this market share.”

December 8th 2007 – “Dead in the water”
It is reported that while visiting shareholders in the US, Mr Tom Albanese CEO of Rio Tinto has stepped up his rhetoric against BHP Billiton's unsolicited takeover bid and labeling it "dead in the water." Mr Albanese told Dow Jones Newswires and CNB that "There's clear recognition from Rio Tinto shareholders that what we rejected was rejected on the basis of value. It came up well short. There just wasn’t enough value, so it is dead in the water”

December 8th 2007 –Baosteel issues official denial
Baosteel Group Corp, China's largest steel producer, said on its Web site Friday it has no plans to bid for Rio Tinto PLC. The Web site posting confirms comments reported on Thursday that Mr Xu had denied the Herald story and said that "Baosteel lacks the financial wherewithal to take over Rio Tinto."

December 11th 2007 - Rio asks UK Panel to set deadline
Rio Tinto has challenged BHP Billiton on Tuesday to make a formal bid to create a mega mining house or walk away. As per report, Rio asked Britain's Takeover Panel to set a deadline under a put up or shut up rule by which BHPB would have to formalize its approach, more than a month after BHP's USD 140 billion 3 for 1 share proposal was made public.

December 11th 2007 - Blackstone denies rumor
Leading US private equity firm Blackstone has denied a report in the London Daily Telegraph that it is planning to put together a consortium to make a bid for Australian diversified mining giant Rio Tinto. The consortium is rumored to include a Chinese sovereign wealth fund.

December 21st 2008 - The Takeover panel
Following recent representations made by the advisers to Rio Tinto, the Panel Executive has been considering the application of Rule 2.4(b) of the Code to the approach by BHP to Rio Tinto. Following discussions with both parties’ advisers, the Panel Executive has ruled that, unless the Panel Executive consents otherwise, BHP must, by 5.00PM on February 6th 2008, either announce a firm intention to make an offer for Rio Tinto under Rule 2.5 of the Code or announce that it does not intend to make an offer for Rio Tinto.

December 22nd 2008 - Japan shows concerns
Asahi newspaper reported that Japan's Fair Trade Commission is worried about a BHP Billiton takeover of Rio Tinto and has begun talks with counterparts in Europe and Australia about a possible investigation. The Asahi newspaper said the Japanese watchdog was likely to talk with counterparts in South Korea and Taiwan, countries which also have steelmakers highly dependent on the miners.

December 23rd 2007 - China puts embassies on alert
The Telegraph reported that China has begun concerted action to protect its position as one of the world's leading consumers of iron ore and other raw materials to stop the merger of global mining giants BHP Billiton and Rio Tinto. As per report, Chinese embassies in the UK and Australia have sounded out banking and legal advisers in London and Sydney over the past 10 days and their officials are drawing up detailed analysis of the BHP-Rio situation to assess all of China's political options.

December 23rd 2008 – Share buy back cancellation by BHPB
FT reported that BHP Billiton has suspended its USD 10 billion on market buy back of its UK listed shares until further notice, reflecting the fact that it is expected to make a bid for rival Rio Tinto.

December 27th 2008 - Rio chairman hits back at BHP offer
It is reported that Rio Tinto Ltd has hit back at BHP Billiton's hostile approach, playing up its independent growth prospects amid renewed speculation of a Chinese backed counter bid. Mr Paul Skinner chairman of Rio in an open letter to shareholders repeated his board's belief that BHP Billiton's three for one share offer significantly undervalued Rio Tinto and its prospects.

January 6th 2008 - BHPB bid for Rio codename “De Bello”
Reuters reported that Mr Kloppers has put together a team which code named the Rio plan “De Bello”, a reference to Caesar's hard fought victory over heroic Gallic leader Vercingetorix in 52 BC. Mr Kloppers, Like Caesar, who eventually had Vercingetorix strangled is undeterred.

January 15th 2008 - Rio showcases Pilbara iron ore reserves
Herald Sun reported that Rio Tinto has fired a new salvo in its battle to fend off predator BHP Billiton, reiterating its claim to have the biggest and best iron ore operation in the Pilbara amid mounting speculation that BHP will move earlier than expected with an improved offer. Mr Sam Walsh CEO of iron ore business of Rio at a Perth media briefing said that that Rio has the largest iron ore resource and reserve base in the Pilbara, expected to sustain multiple decades of future mining.

January 20th 2008 - Rumors abound of a new bid
The Australian and UK financial markets are abuzz with rumors that mining giant BHP Billiton Ltd is set to make an improved takeover bid for Rio Tinto this week sending Rio Tinto's share price up by 3% last week. Analysts are speculating that a revised offer might be comprise 3.5 BHP Billiton shares for one Rio share, plus a cash component.

February 1st 2008 - Rio gets a Chinese wall
It is reported that state owned China’s largest aluminum producer Chinalco has hooked up with the world’s largest aluminum firm Alcoa and taken a 12% stake in Rio at GBP 60 per share, a whopping 20% premium to Thursday’s closing price. The blocking move has been structured through a Singapore based vehicle called Shining Prospect Pte Ltd, owned by Chinalco and into which Alcoa is injecting USD 1.2 billion.

February 1st 2008 - Rio repeats value statement
Rio Tinto vide a release said that it has noted the announcement by Chinalco and Alcoa. Mr Paul Skinner chairman of Rio Tinto said "This unsolicited development, of which we had no prior notice, reinforces our view of the long term value of Rio Tinto.”

February 3rd 2008– 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.

MEPS global forecast for SS prices

MEPS said that “World average stainless selling values are forecast to move lower again in February.” It added that “Rises in the EU and Asia are expected to be outweighed by falls in North America. Large drops in the US alloy surcharges of USD 400 per tonne for type 304 and USD 550 for grade 316 are anticipated. Gaps in distributor inventories in the West are expected to be replenished soon. However, uncertainty regarding the economic outlook for 2008 is likely to limit stock building. Transaction values in Asian should move up slowly over the coming months as output curbs begin to take effect. Weaker demand and reduced nickel costs should result in world transaction figures remaining significantly below previous highs. Grade 304 cold rolled coil prices are forecast to reach approximately USD 4400 per tonne by the middle of the year, with type 316 values reaching almost USD 7050 per tonne.

MEPS said that “As predicted last month, the monthly average cash nickel value increased this month. Nickel stocks began to level out at the beginning of January before trending downwards during the middle of the month but climbed again over the last week. An imminent revival in the world stainless steel market should spur nickel prices to move higher in the short term. However, weaker demand for primary nickel from China is forecast for 2008. This, coupled with a difficult economic climate in the West, is unlikely to lead to values moving above the USD 30000 per tonne mark. New capacity, due on stream later this year, could force prices lower during the final two quarters. As such, stainless transaction values are forecast to fall during the final two quarters despite increased chrome, molybdenum and scrap costs.”

MEPS added that “The rise in stainless selling figures over the early part of 2008 is expected to be erased during the second half of this year. Oversupply in China is likely to cause exports from East to West to increase, once again. Reduced demand, as a result of a weaker world economy, could also add further negative pressure. Consequently, average prices this year are forecast to be lower than in 2007 recording a decrease of approximately USD 630 per tonne for type 304 cold rolled coils and almost USD 700 per tonne for grade 316. These represent declines of approximately 13% and 9% respectively.”

AK Steel to add surcharge for electrical steel

AK Steel Holding Corp announced that it will add a USD 375 per ton surcharge to invoices for electrical steel products shipped in March 2008.

AK Steel's surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the January 2008 purchase cost used to determine the March 2008 surcharges.

AK Steel produces flat rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets.

Tenova Pyromet to build a furnace for Xstrata in Zambia

Xstrata Technology a South African leading global marketer of processing technologies in mineral processing, leaching, refining and smelting, has contracted Tenova Pyromet to supply the first ever ISACONVERT™ furnace for the copper smelter at Mopani Copper Mines at Mufulira in Zambia. On completion, set for the end of 2008, the furnace will be used for converting copper matte produced by the Mopani Copper ISASMELT™ furnace into blister copper.

The release said that engineering work is already underway Tenova Pyromet is working together with Xstrata Technology on the design of the furnace shell, which will be equipped with Tenova Pyromet MAXICOOL copper cooling system.

Mr Philip Arthur Xstrata Technology Business Manager, enthusiastic about this co operation, pointed out that “Tenova Pyromet’s willingness to work closely with Xstrata Technology and adhere to our process requirements was critical in their being selected as our technology partner. Their engineering capabilities are helping Xstrata Technology deliver a robust containment system for this high intensity smelting process."

PT Bukit Asam 2007 profit up by 56% YoY on coal price

Reuters reported that Indonesian coal miner, PT Tambang Batubara Bukit Asam Tbk PTBA.JK unaudited net profit rose more than 56% in 2007, boosted by higher coal prices and targeted higher production in 2008.

The firm's unauditied net profit was IDR 760 billion (USD 82.42 million) last year, compared to IDR 485.67 billion in 2006, with sales revenue climbing by 16.3% to IDR 4.11 trillion.


Mr Eko Budhiwijayanto corporate secretary of Bukit Asam said the firm planned to produce 9.3 million tonnes of coal this year up from 8.5 million in 2007 Bukit Asam's, while exports were expected to reach 4.7 million tonnes compared to 3.9 million tonnes last year.

Bukit Asam is the smallest among three listed coal mining firms on the Indonesia Stock Exchange in terms of market capitalization.

Rautaruukki to acquire Wolter Metallverarbeitung

Rautaruukki Corporation has signed an agreement to acquire the entire share capital of Wolter Metallverarbeitung GmbH which has operations at Dortmund in Germany. The transaction was closed yesterday.

Wolter’s main products are telescopic booms for leading globally operating European mobile crane customers. Production also includes booms for special heavy cranes used for wind farm installations. Net sales are expected to double from last year to approximately EUR 10 million in 2008.

Mr Tommi Matomäki president of Ruukki Engineering said that “The acquisition is consistent with our growth strategy in the lifting, handling and transportation equipment sector. These new products form a platform on which to grow the business by drawing on Ruukki’s expertise in high strength steels, forming and welding. Wolter will give us an entry into a new product range and bring with it new high-profile customers.”

US domestic scrap price may drop in February

YIEH reported that the US scrap market as well as the Japanese scrap export are holding stable without continuously moving upwards at this moment, after the previous price jump of global scrap market, it is believed that the current period is properly the restructuring time for scrap market. In February, the US bundle scrap price may fall by USD 10 per tonne.

South Korean Hyundai Steel Company also lowered its bid to Japanese sourced scrap by JPY 500 per tonne at the end of January. The export price from US Western Coast is down to USD 77 per tonne as well.

It is anticipated that the US scrap market will experience further uncertainty and fluctuation in coming few months.

Carpenter Technology reports record Q2 results

Carpenter Technology Corporation reported record second quarter results. Its net income from continuing operations of USD 57.7 million reflected strong growth in the energy market coupled with increased international demand. Net income including discontinued operations and related divestiture expenses was USD 56.1 million.

Sales and operating results exclude Carpenter's ceramics businesses, which the Company announced in December it plans to sell to The Morgan Crucible Company plc. The historical results of the ceramics businesses are now reported in discontinued operations.

Financial highlights from the second quarter continuing operations include:

(In USD million)

Ms Anne Stevens, chairman, president & CEO of Carpenter Technology said that "Our record second quarter results reflected the benefits of our end use market diversification and international footprint. We continued to experience strong demand from the energy market, which also contributed to the 33% jump in our international sales. Growth in these markets helped offset domestic weakness in our economically sensitive markets, including automotive, consumer and industrial.”

Ms Stevens said that "As we look at the second half of our fiscal year, we remain on track for another record year. Our third quarter performance might not surpass the exceptionally strong third quarter results of a year ago due to softening U.S. economic conditions. While we expect continued strength in energy market sales and resumption in sales growth to the aerospace market for the third quarter, sales to our other end-use markets could offset this growth."

She added that "We expect our fiscal fourth quarter will show year-over year improvement as increasing momentum in aerospace and solid demand in energy should more than offset any weakness in our economically sensitive businesses."

Sidor sees union proposal as unviable

BNamericas reported that Venezuelan steelmaker Ternium Sidor considers the salary increase proposed by unionized workers in collective contract negotiations to be unfeasible.

A source close to the negotiations told BNamericas that "Based on the employees' proposal, the cost of the new contract would reach nearly USD 3bn which is more than the company sells in a year. You can't sign a contract like that.”

According to the source, the company has already offered to raise salaries by 53%, the fifth offer the company has made to the union, "but they [the employees] are demanding nearly 70%."

The source also said the company lost roughly USD 7 million during a 48 hour stoppage last week. He said "That is not an official figure but it's the number that has been circulating among companies in the sector."

The contact said that collective contract negotiations have resulted in a dispute within the national steelworkers' union Sutiss which has prevented talks from being successful.

Sutiss treasurer Mr Johny Luna said in an interview last week that the union maintains its stance of calling an indefinite strike if the company does not show any willingness to reach an agreement.

The parties will resume negotiations on February 6th 2008.

Esmark gets new credit line for restructuring

bizjournals.com reported that Esmark Inc has received a commitment for a USD 500 million revolving line of credit. The deal should close by the end of the first quarter.

The new facility from its lead lender, GE Corporate Lending, will replace the existing USD 150 million line of credit at Esmark Steel Service Group Inc and the USD 225 million in revolving credit at Wheeling Pittsburgh Corp, which Esmark acquired last year.

Mr Craig Bouchard President of Esmark said that makes it easier for the company to borrow money and complete its restructuring plans.

Japanese steel majors facing huger cost pressures

JMB reported that JFE Holdings and Nisshin Steel posted higher consolidated sales and profit for April to December 2007 period from same period of 2006 while Nippon Steel, Sumitomo Metal Industries and Kobe Steel posted higher sales and lower profit.

The report added that higher cost for freight, metallic materials and depreciation method change pressured on the profit despite of the higher selling price under firm steel demand at home and abroad.

Zinifex intersects high grade zinc mineralisation in Tunisian drilling

Recent drilling results at Zinifex's joint venture project Nefza in Tunisia have confirmed the prospectivity of the region for high grade zinc deposits. The initial drilling program at the Bou Aouane prospect within the historic Khatkhadha mining district intersected 8.1 meters at 12.3% zinc while a second hole drilled 800 metres south east of this location intersected 21.4 meters at 2.4%.

Mr John Larson GM exploration of Zinifex said that the Bou Aouane district has a long history of zinc mining. He added that "The objective of this drilling program was to confirm the extent and grade of previously reported zinc mineralization as well as provide reconnaissance drill coverage of an adjoining area. The results are very encouraging, and indicate that there is potential for high grade mineralisation over significant widths in the region.”

The Nefza project is part of a joint venture agreement between Albidon and Zinifex to explore and develop Albidon's Nefza and Zinifex's Haffouz zinc exploration licenses in Tunisia.

US weekly crude steel production up by 13.6% YoY

American Iron & Steel Industries reported that in the week ending February 2nd 2008, US’s raw steel production was 2.134 million net tons while the capability utilization rate was 89.5%. Production was 1.877 million net tons in the week ending February 2nd 2007, while the capability utilization then was 78.2%. The current week production represents 13.6% YoY increase from the same period in 2007.

Production for the week ending February 2nd, 2008 is up 1.5 % from the previous week ending January 26th 2008 when production was 2.101 million tons and the rate of capability utilization was 88.1%.

Adjusted YTD production through February 2nd 2008 was 10.396 million tons, at a capability utilization rate of 86.6%. That is a 10.7% increase from the 9.385 million tons during the same period last year, when the capability utilization rate was 78.2%.

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.

AK Steel raises prices for carbon steel products

Thomson Financial reported that AK Steel will increase spot market prices for its carbon steel products by USD 30 per ton for all new orders, effective immediately.

AK Steel in a statement said the price increase is in response to increased demand for carbon steel products, as well as the need to recover higher costs for steelmaking inputs.

ArcelorMittal completes offer to shareholders in China Oriental

ArcelorMittal announced the completion of its general offer to shareholders in China Oriental.

Earlier On December 14th 2007 ArcelorMittal launched a mandatory cash tender offer to acquire all of the outstanding share capital in China Oriental. Prior to the offer ArcelorMittal together with its concert parties held approximately 73% of the existing issued share capital of the Company. Following the offer and accounting for all valid acceptances, ArcelorMittal together with its concert parties have increased the aggregate holding to approximately 92.1%.

Accordingly, the minimum public float requirement under the Hong Kong Stock Exchange listing rules of 25% has been reduced below the regulatory threshold and must be restored as soon as practicable. ArcelorMittal will consider various methods in which the Company’s free float will be restored.

In the interim the Company has applied for a suspension of trading of the shares on the HK Stock Exchange with immediate effect.

ArcelorMittal bags license for DRI plant in Egypt

The Egyptian Industrial Authority said that ArcelorMittal has won a license to build DRI and Billet steel factories in Egypt for EGP 340 million (USD 61.2 million)

Under the agreement, the production capacity of the factories would be 1.6 million tonnes per year of DRI steel and 1.4 million tonnes of Billet steel.

Mr Sudhir Maheshawri executive VP of ArcelorMittal said that “The bid was intense. It was about 81 rounds. The project will cost between USD 800 million to USD 1 billion and would take up to 4 years for production to start.”

Mr Amr Assal head of the industrial development authority said that "The point of these licenses is to lower steel prices in Egypt and boost the backward integration of the industry." He added that Egypt went from importing 2 million tonnes of steel annually less than 10 years ago to become an exporter of 900,000 tonnes in 2006.

Kuwait's Al Kharafi group also won a license for pelletising factories for EGP 105 million and Saudi Arabia's Al Tuwairqi Group won a similar license for EGP 64 million.

First Dubai steel futures delivery launches through JRG

Commodity Online reported that JRG Metals & Commodities has carried out the first steel futures delivery through DGCX steel rebar futures contracts.

Mr Ahmed Bin Sulayem chairman of DGCX and Dubai Multi Commodity Centre inaugurated the Dubai Commodity Receipt for steel rebar. Mr Liyakat Ali MD of Sarah Steel Structure Manufacturing LLC was the first buyer while Mr Ramesh Narang director of Al Rama International Traders was the first seller.

Mr Regi Jacob director of RG Metals & Commodities said that it is proud to be the first DGCX clearing member of steel futures. He added that ”JRG is continuously striving to help investors, manufacturers and companies from different industries to enter into this international trading platform and benefit from futures trading by taking deliveries as well as utilizing the investment and arbitrage opportunities.”

Mr Jacob said that DMCC’s well structured and trusted DCR system and DGCX’s high tech trading platform and JRG’s professional expertise led to the world’s first delivery settlement in steel futures contract. He added that “With a committed management team and new technology implementations like Mobile Trading & Internet Trading, JRG is confident of bringing to the common investor the best offers in the investment arena.”

In November 2006, JRG launched UAE’s first mobile trading services for carrying out trades in DGCX platform. In July 2007, Baring India Private Equity Fund II Limited announced an investment of up to USD 35 million in JRG Securities Limited.

JRG Metals & Commodities DMCC is a subsidiary of JRG Securities Limited.

Danube to set up manufacturing units in China

It is reported that Dubai based Danube Building Materials has invested AED 55 million towards the formation of the Lianyungang Donghai Danube Wood Products Company in China.

The investment involved the construction of 3 new manufacturing facilities in the Punan Industrial Economic Development Zone in Lianyungang Port, which the company expects to generate AED 183 million in additional revenues. The Danube International Trading Company will serve as the local hub for its operations, with the first batch of China made products expected to arrive to the Middle East by early 2008.

Mr Rizwan Sajan chairman of Danube said that "China supplies close to one third of the materials in the booming construction industry of the UAE."

The rapid growth of Danube's operations has earned Danube Building Materials an export license from the customs department of China, which has paved the way for the formation of the Lianyungang Donghai Danube Wood Products, spanning 50,000 square feet. It has employed a 100 strong workforce including a mix of well trained Chinese and expatriate workers.

NEPRA urges to go for hydel power generation

Dawn reported that Pakistan's Planning Commission and the National Electric Power Regulatory Authority have told the president and the prime minister that the public concern about shortages of power would soon turn into a question of unbearable increase in cost of production and affordability of thermal power generation.

Official sources said that the ratio of hydroelectric power generation capacity would decline to less than 20% by 2010 from the current 28% because of an increasing number of contracts being signed for thermal power generation. They added that the government had been advised to be careful in increasing generation capacity through the short term solution of thermal power generation at exorbitant tariffs and strive for maintaining a ratio of 70:30 between thermal and hydel power generation. While the generation in winter would remain more or less at the current level in the next few years, the power supply from thermal plants will increase substantially as new projects come on line by 2010.

Hydel power generation during the current winter fluctuates in 1,500 MW to 2,000 MW against total supplies of 11,000 MW to 12,000 MW, mostly coming from high cost oil based thermal projects. Fuel cost accounts for more than two third of thermal tariff that keeps rising with international prices and currently averages beyond PKR 7 per unit. The aggregate hydel power tariff from Tarbela, Mangla and Ghazi Barotha comes to less than PKR 0.3 per unit.

While the WAPDA Vision 2025 and energy security plan 2030 envisaged improving hydel generation to 35% and the power policies announced by the government called for a bar on thermal projects, most of the agreements signed for power production over the past five years were in the thermal sector.

BOTAS starts feasibility study on Iraq gas pipeline

Turkish pipeline petroleum company BOTAS had announced that a feasibility studies has begun on a natural gas pipeline that will connect northern Iraq's fields to a Turkish port. The pipeline will largely run along the same route as the twin oil pipelines from Kirkuk to the Mediterranean port of Yumurtalık in Turkey.

The study will be sponsored by BOTAS, the Turkish Petroleum Corporation and the Iraqi oil ministry. BOTAS will hold the right to put to tender the 30 to 40 inch pipeline and various pumping stations and ask for bids from international markets.

The Turkey Iraq Natural Gas Pipeline Project, developed to transport Iraqi gas to Turkey, comes after the signing of a MoU between the Turkish energy ministry and the Iraqi oil minister in Ankara on August 7th 2007. The parties have declared their intention to transport Iraqi gas to Europe through Turkey and their decision to form a group composed of members from the Iraqi petroleum ministry, BOTAS and TPAO in order to initiate the related feasibility studies.

Gas not consumed in Turkey will be loaded onto tankers in the form of liquefied natural gas and transferred to world markets. Once the northern Iraq gas fields are developed, 353 billion cubic feet of natural gas will flow to the port of Yumurtalık.

Tamweel plans expansion projects in Saudi Arabia & Egypt

Dubai based mortgage provider Tamweel has announced that it expects to start business in Saudi Arabia and Egypt this year as part of an international expansion program to reduce reliance on its home market.

Mr Feras Kalthoum head of investments at Tamweel said that it is in the advanced stages of setting up a new JV comapny in Saudi Arabia. In Egypt, Tamweel will own the entire operation. He added that “The aim is that 20% to 30% oh the revenue will come from the international market in the next 2 to 3 years.”

Mr Kalthoum said that Tamweel may open in expansion projects in Turkey, Morocco, India and Pakistan. He added that “These countries are population intense and have scalability.”

Tamweel, which is partly owned by Dubai Islamic Bank, also plans to dovetail with the expansion of United Arab Emirates based real estate developers, such as Emaar Properties and Damac.

Mr Kalthoum further added that Tamweel had expected supply to catch up with demand in 2009. The AED 32 billion UAE mortgage industry is likely to grow by about 50% in 2008, led by demand in Dubai and Abu Dhabi, where Tamweel is also looking to offer mortgages.

Bahrain Bay awards BHD 22 million infrastructure contract to AMA

Bahrain Bay has awarded BHD 22 million infrastructure contract to leading regional infrastructure group AMA.

The contract will see the construction of key elements of Bahrain Bay's infrastructure such as its road networks, water network, sewage, storm drainage and irrigation water networks, as well as its telecommunications installation system and bridge network.

Mr Bob Vincent CEO of Bahrain Bay said that "AMA will create more than 6 kilometer of road network, over 4.5 kilometer of storm drainage and a 5 kilometer telecommunications installation system."

PDO sets up engineering and design office

Gulf News reported that Petroleum Development Oman has set up a dedicated engineering and design office at its corporate headquarters at Mina Al Fahal that will specialize in front end engineering and design for major field development projects.

The new unit, to be called the FEED Office, has a team of 15 engineers, who will initially be working on the Mabrouk field development project.

Petroleum Development Oman is intended to undertake multiple field development projects to guarantee its long term oil and gas production capacity. FEED Office would ensure projects over the coming years advance without delay.

ACWA acquires 40% stake in Multiforms

Khaleej Times reported that Saudi based Arabian Company for Water & Power Development has acquired a 40% stake in Multiforms, an architectural façade specialists and subsidiary of Emaar Industries & Investments.

ACWA Power Development is owned by A K Al Muaidib & Sons Group and A Abunayyan Group. It specializes in infrastructure projects development including water and energy application systems, wastewater management systems, and is also an active investor in the manufacturing and real estate sector.

New laws to improve UAE business climate - Report

Mr Sultan Nasser Al Suwaidi governor of Central Bank of UAE said that new laws and regulations are on the anvil while existing ones would be revised to improve the business environment in the country. He added that "In January 2008, UAE Central Bank has started implementing its strategy under the federal government strategy and once we complete it the environment for banking business in the UAE will improve enormously. There are several areas where we will improve the business environment."

Mr Al Suwaidi said that business and financial laws will be reviewed and improved and those that do not exist will be introduced. Banking supervision and examination would become more robust and more interactive and would function as a separate committee within the Central Bank. He added that "The Central Bank, ministry of justice, ministry of finance and the ministry of economy will work together on this initiative. The new laws will be drafted in accordance with best practices. The banking supervision & examination department of the Central Bank will be guided on policy issues by the decisions of this committee."

He said that the Central Bank will provide more IT solutions for banks and other financial institutions operating in the UAE with the aim to help banks deal with common challenges on a collective basis. The future is bright for banking business in the UAE as the economy is expected to grow further. The economies around the UAE will also grow as demand for oil and gas will continue to be strong in the future and this will create additional opportunities for banks operating here. He added that "The most important thing that we all have to focus at this point in time is our business strategies in the short-term and the medium term. We have to focus on what to do to benefit from the opportunities that would be created locally through the implementation of the Federal Government Strategy and the regional opportunities."

On the total deposits of UAE banks, Mr Suwaidi said that it grew up by around 35% YoY as on December 31st 2007 to AED 750 billion from AED 555 billion during previous year. Total loans and advances grew up by around 39% YOY to AED 725 billion from AED 520 billion at the end of 2006. Total assets expanded by 45% YoY to AED 1.240 trillion from AED 852 billion. The profits showed whopping growth of 28.8% YoY to AED 25 billion from AED 19.4 billion as at the end of 2006.

Kuwait to start importing LNG by ship from Qatar

Doha Times reported that Kuwait will start importing between 500 million cubic feet and 750 million cubic feet of LNG daily from Qatar by sea in 2009.

Mr Saad al Shuwaib CEO of Kuwait Petroleum Corporation said that “In 2009 we will definitely import LNG by ships which will operate in summer. Import facilities will be ready by the end 2008.” He added that most of the imports will be used to supply power and water desalination plants when demand rises sharply during the summer months in Kuwait.

It may be noted that Kuwait and Qatar had been planning to have the gas piped through Saudi Arabia but an agreement with the kingdom is still awaited.

Jordanian cement maker increase cement price

Jordan Cement Factories Company Limited has increased JOD 0.570 in cement price to JOD 69.35 per tonne due to the recent rise in the price of the fuel used in cement manufacturing.

Wuhan Steel to mine iron ore in Madagascar

It is reported that China's third largest steel producer Wuhan Steel is to set up a JV to explore for iron ore and other metals in the African state of Madagascar.

Mr Bai Fang a spokesman for Wuhan Steel Company said Wuhan Iron and Steel Group will take a 60% stake in the venture with 40% taken by Hong Kong based Kam Hing International Holdings. He refused to provide financial details.

According to a statement released by the Hong Kong business late last month, the firm will be incorporated in Hong Kong for the exploration and exploitation of iron and other mineral resources near the town of Bekisopa in Madagascar. It said the mineral exploration and exploitation rights in an area of approximately 287 square kilometers were bought in late 2007. It added that Wuhan and its partners will use the new JV group to buy more rights in Madagascar.

China Coal to buy Fengfeng Group

China Knowledge reported that China Coal Energy is now in talks to buy Fengfeng Group Corp a coal company in Hebei Province for over CNY 10 billion in line with its expansion strategy.

The report added that the two sides have reached an initial agreement on the acquisition now. Meanwhile, another coal company Golden Bull Energy is also in talks to buy Fengfeng. However, it is not supported by the State owned Assets Supervision and Administration Commission of the State Council.

China Coal, ranked the 3rd in China after Shenhua and Datong Coal, produced 105.03 million tonnes coal in 2007.

Sichuan Province to cut electricity supply for steel producers

It is reported that Sichuan provincial government published an urgent notice on January 28th 2008 to suspend or restrict electricity supplies to eight heavy energy consumption sectors including steel, ferroalloy, electrolytic aluminum, zinc smelting, calcium carbide, sodium hydroxide, phosphorus and cement.

As per report since December 2007, most coal mines in the province have shut down for maintenance, coupled with deteriorated weather of cold rain and snow, power supply has become extremely tight in the region.

In order to ensure an overall supply target of at least 70,000 tonnes per day of coal during the Spring Festival, 698 mines in the province are required to be under operations during the Festival with daily output of 126,000 tonnes on average.

Coal stocks at Chinese power plants recovering

Xinhua quoted China State Electricity Regulatory Commission said that China's power coal stockpiles have stopped shrinking and started to rally steadily as a result of heightened output and expedited rail transport.

Mr Tan Rongyao supervisor of State Electricity Regulatory Commission said that power coal reserves reached 24.06 million tonnes up by 2.99 million tonnes from the low point on January 28th 2008. He added that transmission wires paralyzed by blizzards and a deep freeze in the worst hit provinces of Hunan and Jiangxi have restored 53% and 60% of their normal electrical loads, respectively.

China Ministry of Railways said in another development, the 355 power plants that depend on railways for coal supplies have reported an aggregate stockpile of 2.64 million tonnes, enough for 10.8 days. The number of power plants with coal reserves of less than three days dropped from 65 to 34.

The ministry said daily shipments during the seven day Spring Festival holiday, which begins on Wednesday, must stay above 42,819 rail container trucks. It said the command center ordered power plants to keep a minimum 10 day coal stockpile; otherwise, generation and consumption must be rationed. Power supplies for coal mines and chemical enterprises must not be cut off.

Hainan to construct new tinplate line

According to Steel Business Briefing, Hainan Haiwoo Tinplate Industry plans to construct a new 200,000 tonnes per year dual tinplate/TFS line. The Chinese-Korean-Japanese JV has an existing 150,000 tonnes per year operation on southern China’s Hainan Island. The planned new facility is expected to be in operation by July 2009.

The major overseas shareholders in the JV are Japan’s JFE which supplies blackplate to the operation and Korea’s TCC Steel. Output will be targeted at domestic and overseas food and beverage can make industries. South East Asia is the company’s biggest targeted export market.

This venture is part of a spate of investments in tinplate in China with the country’s two largest suppliers, Baosteel and Zhongyue both recently making substantial additions to their capacity.

Angang seamless pipe standards get approved

It is reported that Angang has its reputation and influence in the national standardization domain reinforced and expanded, by drafting out national standards for three kinds of seamless steel pipe, for structure, liquid transportation and drilling uses respectively which have been examined and approved by the nation's steel standard technique commission.

As per report the new standards are reportedly to get on track with foreign standards like ISO, ASTM, EN, DIN and JIS and would push on development and product mix structure of China's seamless steel.

Though the producers' technologies are advancing, equipments upgrading and product quality improving, production standards for steel pipes remain backward, out of line with international and advanced overseas standards.

Angang therefore took on the job of reconstituting seamless steel pipe standards, based on actual requirements of domestic and overseas consumer, as well as the major producers' technological level and real products.

Tangshan predicts an increase of 50% in net profits in 2007

Tangshan Steel Crop predicted an increase of around 50% in net profits in 2007 from adjusted net profits of CNY1.42125 billion in 2006.

It contributed the rise to three factors as follows:
1. Tangshan Medium Plate Company Limited a subsidiary of the Crop, started production of its medium plate project in September 2006 andf brought it into full capacity in 2007.
2. Its proportion of high value added products was improved and products structure was optimized.
3. To work to conduct energy saving projects, develop recycling economy and optimize various main indexes.

China Steel to list on ASX

It is reported that Nickel pig iron producer China Steel Australia Ltd is aiming to raise USD 3 million and list on the Australian Stock Exchange.

Mr Damien Seah chairman of China Steel said the initial public offer would give investors an opportunity to gain exposure to the buoyant Chinese market. He added that "Investors in China Steel gain exposure to China through an already profitable operating business led by an experienced and dedicated management team."

Mr Seah said that "With this strong existing demand for the company's nickel pig iron product, there is also potential for further growth through expansion of production."

China Steel started producing nickel pig iron in 2006 with the company delivering a profit of USD 7.45 million in fiscal year 2007.

Shanxi coking industry records hue profit growth in 2007

According to Shanxi provincial economic commission revealed statistics, the province produced a total of 98 million tonnes coke in 2007 and the coking enterprises with an above designated scale are expected with aggregate sales income of some CNY 100 billion making coke industry's profit growth the fastest among other sectors of the province.

In 2007, Shanxi Province made 98 million tonnes coke up by 6 million tonnes or 6.5%YoY. In specific, coke from large machinery ovens accounted 84.96 million tonnes and that from small machinery ovens 12.4 million tonnes from modified primitive ovens 640,000 tonnes. Large machinery oven made coke took up 86.7%. Total sales income at the coking enterprises with an above designated scale grew 46.7% from the previous year about 13% of the province's industry revenue of the enterprises of this scale. Export of coke came close to 9 million tonnes throughout the year earning in USD 1.7 billion up by 50% around.

In 2007, coking coal price had bottomed out at CNY 600 per tonne, compared with current level of CNY 900 per tonne for the prime quality being loaded in the province and some CNY 1200 per tonne in mid south, East China and South China.

WISCO price hike announcement strengthens confidence

According to Mr Zhou Tao an industry analyst from Sinolink Securities that China's Wuhan Steel raised prices for products yielded in March on January 30th 20008 which has been considered to release a positive signal to the steel industry in the year beginning, a traditional off season for the sector.

Prices are lifted by CNY 50 per tonne for HR products with another CNY 50 per tonne advance for those with width of over 1550mm, CNY 50 per tonne for common carbon and quality carbon CRC, CNY 800 per tonne for grain oriented silicon steel and CNY 100 per tonne for 600 non grain oriented silicon steel and below up by CNY 100 per tonne for steel tyre cord up by CNY 50 per tonne for medium plate and CNY 200 per tonne for HDG. Prices for other products are maintained firm as February prices.

Mr Zhou Xizeng from Citic Securities said that insiders believe they will witness better performance of steel industry in the first quarter of this year than last quarter. Besides some giants such as Baosteel, Wuhan Steel and Anshan Steel, some other smaller steelmakers concerning M&As, product mix optimization and iron ore resources will also eye nice operations.

M&As in Hebei Province have become clear with Tangshan Steel and Handan Steel dominating northern and southern regions respectively. Wuyang Steel under Handan Steel boasts strong profitability and will be listed sooner or later, but there is no detailed time table so far. The substantial combination of Anshan Steel and Benxi Steel will also bring opportunity to Benxi Steel.

MMK acquires 50% interest in ZAO Kazankovskaya Coal

OJSC MMK has announced that it has acknowledged transfer of title to a 50% share package of ZAO Kazankovskaya Coal Company from OOO Metal.

The transfer occurred as part of the procedure of a voluntary liquidation of OOO Metal a 100% subsidiary of OJSC MMK. The 50% package, earlier owned by Metal was transferred to OJSC MMK as the only participant in the company under liquidation.

ZAO Kazankovskaya Coal Company is a coal mining enterprise located in the Kemerovo Region and owned on a parity basis by OJSC MMK and ZAO Yuzhkuzbassugol Coal Company. Among the assets of ZAO Kazankovskaya Coal Company is the Tagaryshskaya Coal Mine with 40 million tonnes of grade G coal reserves which produced 926,000 tonnes of coal in 2007 and a license for mining the Kureinsky section of the Kureinsky Coal Field with prospected reserves of 425 million tonnes of K, KS, OS and TS grades’ coals.

The liquidation of OOO Metal is taking place in the context of a plan to optimize the MMK Group’s structure for the purpose of improving the efficiency of the Group’s assets management.

5 miners injured in Donetsk coal mine explosion

Ukrainian Journal Staff reported that 5 miners were injured as a result of a blast at the Karbon Ltd coal mine in Donetsk region. All were taken to a hospital at Shakhtarsk with burns and bruises.

According to preliminary data, the accident was caused by methane explosion.

Ukraine signs deal for opening way to WTO accession

It is reported that Mr Viktor Yushchenko Presiden of Ukraine and Mr Pascal Lamy secretary general of global trade body's at a meeting of the WTO General Council in Geneva signed an agreement with the World Trade Organization recently opening the way to the country's WTO membership.

Mr Yushchenko said at the meeting that Ukraine will not attempt to block Russia's admission to the organization. He said "We completely support Russia's WTO accession bid. Ukraine will do all it can to facilitate Russia's early admission."

As per report after 14 years of accession negotiations, the Working Party on the Accession of Ukraine successfully adopted Ukraine's accession package in late January. Ms Yulia Tymoshenko PM of Ukraine said a few days later that her country expected to become a full fledged WTO member on February 7th 2008.

Serbia and US Steel sign environmental protection deal

Serbia & Montenegro Today reported that Mr Sasa Dragin Minister of Environmental Protection of Serbia and Mr Richard Vietch General Director of US Steel Serbia signed an agreement at the end of last week under which US Steel will invest USD 50 million in environmental protection projects by the end of 2009.

The projects will improve the environmental situation and reduce pollution while the Ministry will offer professional assistance. Dragin said that US Steel is the first private owned company to sign such an agreement with the Ministry, which makes this agreement particularly important.

Mr Dragin said "I am very pleased that US Steel has recognized that and decided to take this path of sustainable development which will not be detrimental to citizens health. I believe this will be a signal for other companies to realize the importance of investment in environmental projects. He said that the aim of US Steel Serbia is to become a leader in environmental protection in the country and recalled that the company has made huge efforts in the past years to improve its performance in environmental protection.”

Economic development that is not harmonized with nature is not sustainable and the negative effects of such un-harmonized development will surpass the positive effects sooner or later, the Minister stressed noting that investment in environmental protection is an investment in a better life for our citizens and all future generations.

NKMK starts manufacturing of new steel grades

FIS reported that the electric smelting unit of Novokuznetsk Metal Integrated Works developed the production of four new steel grades, namely 'Highweld', 'S 355 JR 2', 'S 235 JR' and 'CD 390' which are characterized by low nitrogen and carbon content and are used in construction.

Experimental smelting was successfully conducted at the end of 2007 and the plant started smelting on the industrial scale.

Ukraine will remain key gas transit area

Mr Reinhard Schafers German Ambassador to Ukraine said in interview with newspaper 2000 that Ukraine is a reliable transit partner.

He noted that Europe cannot do without Ukraine on the issue of transit deliveries in the nearest future. He said that those building or planning to build pipes bypassing Ukraine must realize that it is impossible to circumvent this country in 20 years to come, as the pipelines being built will meet just the increasing demand for energy carriers.

Magnesite to ship more refractory products in 2008

FIS reported that Magnesite Group is rated among the world's leaders of refractory materials. In 2007, the group shipped 1.8 million tonnes of products to its consumers.

In 2007, the group purchased a periclase plant in the Krasnoyarsk Krai and Eastern Europe's largest refractory materials producer SLOVMAG as well as a refractory mass producer in China. Investments are projected at RUB 2.8 billion in 2008, 50% more than in 2007.

Mr Ignatko appointed as GD of Russian Coal

It is reported that Mr V Ignatko former director general of Belkamneft was appointed the director general of Russian Coal from February 4th 2008.

As per report the changes are prompted by the plans on further development of business and acquisition of new assets. He is charged to provide the increase in the efficiency of business and production and realization of the new investment strategy.

Oil and gas output hit record level in Russia's in 2007

Russia regional statistics service said that a record 14.9 million tonnes of crude were produced off Sakhalin Island in the Russian Far East in 2007. The statistics service said "The Sakhalin Region produced 14.9 million tonnes of oil last year or 8.7 million tonnes more than in 2006. Average daily crude production grew 140%YoY in 2007."

Russia is currently working on the Sakhalin I and Sakhalin II projects off the Pacific Coast with the participation of foreign investors.

The Sakhalin I project is operated by Exxon Neftegas Limited has recoverable reserves estimated at 2.3 billion barrels of oil and 485 billion cubic meters of natural gas. The Sakhalin II project in which Russian gas monopoly Gazprom holds a controlling stake has estimated reserves of 150 million tonnes of oil and 500 billion cubic meters of natural gas.

The statistics service said the US Exxon Neftegas Limited was the leader in oil output followed by Sakhalinmorneftegaz, Sakhalin Energy and Petrosakh. It said gas output also reached record levels last year.

The statistics service said "In the reporting period, a total of 6.4 billion cubic meters of gas were produced more than in 2006. Average daily gas output grew 190%."

Stroytransgaz starts building 2nd gas plant in Syria

RIA Novosti reported that Stroytransgaz, one of Russia's largest engineering and construction companies had started building the second natural gas processing plant in north central Syria.

The report said the plant is being built for the Syrian Gas Company. Under the terms of the contract concluded in May 2007, Stroytransgaz which is partly owned by Russian energy giant Gazprom, will design the plant, deliver equipment, assemble and launch the facility, expected to process 1.3 billion cubic meters of gas per year.

Stroytransgaz is already building a gas processing plant in Syria with capacity of 2.5 billion cubic meters at an estimated cost of USD 210 million.

Stakhanov increases production by 160% YoY in 2007

FIS reported that in 2007, the plant manufactured 5,556 wagons an absolute record for 38 years of its existence. Sales exceeded UAH 1.2 billion, three times more than in 2006. Net profit after taxes totaled UAH 49.8 million.

Russia to suffer from cement deficit

FIS reported that Russian market may face a constant deficit of cement in 2011, when maximum production capacities in the industry will practically be on a par with consumption. However, only some of the existing Russian cement enterprises are able to work at the full capacity now so the deficit is expected to become a problem as early as 2008 to 2010.

The report said in 2008, the demand is expected to surpass the supply by 9.4%, in 2009 by 23.5% in 2010 by 21.8%. An insignificant surplus in supply over demand is projected for 2011 due to the startup of new capacities and then in 2012 the deficit will return.