TATA Steel Q3 group profit at USD 347 million

TATA Steel announced that its third quarter profit, including that of Corus Group Plc, was INR 14.02 billion rupees USD 347 million and net sales was INR 319 billion rupees. It did not provide comparable earnings for the year earlier third quarter.

TATA Steel's third quarter group interest expense was INR 10.8 billion rupees and the pretax profit was INR 21.7 billion rupees, according to the statement.

Monnet Ispat to build power plant in Indonesia

AsiaPulse reported that India's Monnet Ispat & Energy Ltd and the Jambi provincial administration have signed an agreement on a USD 1 billion coal fired power plant to be built with a capacity of 1,000 MW in that region.

Monnet Ispat will team up with local company PT Basarngo Energy that will handle the construction of the project.

Mr Sandeep Jajodia vice chairman of Monnet Ispat said that his company will soon carry out a feasibility study, land clearing and other preparations that will take around 6 months.

Punj Lloyd consortium bags Malaysian pipeline contract

It is reported that Punj Lloyd consortium has bagged an order worth USD 500 million from Petronas Carigali Sdn Bhd for Sabah Sarawak gas pipeline project in Malaysia.

The scope of the work involves engineering, procurement, construction and commissioning of a 512 kilometer long, 36 inch diameter onshore natural gas pipeline from the proposed Sabah oil & gas terminal in Kimanis to Petronas liquefied natural gas complex in Bintulu.

Punjab cycle makers hit by high steel prices

ET reported that bicycle manufacturers of Punjab have been hit hard by the revision in steel prices. With steel prices hitting roof top the bicycle industry is facing serious repercussions of the steel price hike. With already 2 hikes made in prices of cycle in the month of February and March 2008, the prices of bicycle are again in for revision as most of the cycle manufacturing is mulling to raise the prices in few days from now.

Mr RD Sharma of Indian Bicycle Manufacturing Association said that the exporters of Ludhiana would also be affected as they were already facing stiff competition in the global market due to rupee appreciation and cheap Chinese bicycles and the rise in hot rolled coil would render them more uncompetitive.

Mr KK Seth of United Cycle Parts Manufacturing said that “Even though the finance minister in his Budget speech has proposed to reduce the excise duty from 16% to 14%, it has failed to address their woes of the bicycle industry, which was already grappling with mounting steel prices.”

Mr SK Rai MD of Hero Cycles said that since prices of steel have been steadily increasing from past few months, the bicycle industry has been forced to hike the rates of bicycles that have gone up on an average by INR 150 to INR 200 in last two months.

There are about 2,000 cycle manufacturing units in Ludhiana and around 280 of these are into the export business.

Indian Railways freight revenue in 10 months up by 14% YoY

Indian Railways has posted total approximate earnings of INR 64032.18 crore during April 1st 2007 to February 29th 2008 period up by 14.32% YoY as against INR 56013.42 crore during April 1st 2006 to February 29th 2007.

INR in crore

The total number of passengers booked during April 1st 2007 to February 29th 2008 period was 6099.26 million up by 5.14% YoY as compared to 5801.15 million during April 1st 2006 to February 29th 2007. In the suburban and non suburban sectors, the number of passengers booked was 3372.75 million and 2726.51 million as compared to 3212.15 million and 2589 million, registering an increase of 5% YoY and 5.31% YoY respectively.

Indian Steel - Focus East

The Bharat Chamber of Commerce and mjunction services limited are organizing a two day steel conference entitled "Indian Steel - Focus East," starting today at The Oberoi Grand in Kolkata. The theme of this conference is "Working together for a better tomorrow".

The east of India has traditionally been a steel hub, but the key states of West Bengal, Bihar, Orissa, Jharkhand and Chhattisgarh, needs to work in unison more than ever. It is the time to look at these states as one unit and capitalize on each of their strengths. Each state has its own strengths and weaknesses and a symbiotic arrangement is certain to benefit all.

This event intends to bring together the analysts, experts and stake holders in the steel industry from all across the world to discuss technical, commercial, social & human issues, related to this sector.
1. Get an outlook of the Indian steel industry with a focus on Eastern States
2. Exposure to State Government policy makers
3. Network with over 350 decision makers
4. Meet prospective customers in a business driven environment
5. Discuss most successful strategies for your company in the Eastern India market

Mr Viresh Oberoi MD of mjunction services said, the conference would create a platform for the major players of the steel industry to reach out to the key officials of the government and the country at large, with their vision, opportunities to maximize growth and investment potential in eastern India.

KEC International wins INR 46 crore contracts in MP

KEC International Limited announced that it has been awarded two contracts by Madhya Pradesh Power Transmission Company Limited for the supply and construction of a 220 KV double circuit transmission line from Dewas to Ashta and LILO at Jabalpur on Birsinghpur Amarkantak Transmission Line on turnkey basis respectively.

The job involves supply of towers, erection and commissioning. The total value of the two contracts is INR 46 crore. Both the projects are scheduled to be completed by July 2009. It will strengthen the Madhya Pradesh Power Transmission Company transmission network and are funded by ADB.

Mr Ramesh Chandak MD & CEO of KEC International Limited said that "I am delighted with this win in Madhya Pradesh. Coming, as it does, immediately on the back of KEC's biggest ever project win of over USD 120 million makes it extremely special. I am confident of a consistently powerful performance from our Indian operations so as to maintain our leadership position."

Recently KEC International has entered into contract valued at USD 120.73 million with Saudi Electric Company to construct a 380 KV transmission line on a turnkey basis.

L&T bags SCADA systems contract from ONGC

Larsen & Toubro Limited recently announced that it’s electrical & electronics division has been awarded the contract worth INR 74.7 crore for SCADA system for onshore control centers for offshore operations by Oil & Natural Gas Corporation.

The project involves setting up state of the art control centers, collaboration rooms for 24x7 hours operation and monitoring, video conferencing with offshore process complexes and drilling rigs, monitoring of rotating equipment data from process platforms, integration with various third party system like SCADA, VRC, VATMS, integrated asset management, monitoring status feedback of critical shutdown valves on process platforms and running status of all critical rotating equipment.

The scope of work involves design, engineering, construction, installation and commissioning of onshore control centers in Mumbai and offshore locations. The project will be completed in 11 months.

The system will be used for issuance of emergency shut down commands to 133 well platforms as well as 13 process platforms from onshore control centers or from nearby process platform in case of an emergency for ensuring the safety of offshore operations and operating people. It will also be used for disaster recovery in case of natural calamites.

Vizag to host 'Global Steel Conference-Vision 2020'

It is reported that Visakhapatnam is hosting a mega meet called 'Global Steel Conference-Vision 2020'. Kolkata based monthly magazine Steel & Metallurgy is organizing the two day international seminar beginning March 14th 2008. As many as 150 delegates from around the world will attend the conference.

Mr YSS Rao joint MD of JSW Steel will deliver the keynote address and steel majors like SAIL, RINL, ArcelorMittal, Essar Steels, Corus Process Engineering, Corus Strip Process, Siemens Vai, Morgan Construction Company, Jindal Stainless, Bharat Heavy Electricals, Pa Ha Ge Feuefeste, Polleh Association of Steel Distributors, CITECT, INROY INC and Rockwell Automation will participate in the conference.

Mr Nirmalya Mukherjee editor of Steel & Metallurgy said that the conference would focus on technology, market and applications of steel industry. He added that the conference would discuss the national steel policy which set a production target of 200 million tonnes by 2020.

Orissa Sponge MD to resign from March end

Orissa Sponge Iron & Steel Limited has announced that Mr NK Patnaik MD will resign from the company from March 28th 2008.

Bharat Forge denies news item on ThyssenKrupp forging unit

With reference to the news item appearing in a leading financial daily dated March 10th 2008 titled “Hindujas, M&M, BFL in race for ThyssenKrupp Unit”, Bharat Forge Limited has clarified to BSE that it denies any such developments as referred in the article and the information published as pertaining to Bharat Forge is incorrect and has no relevance.

No divestment in NALCO – Mr Ola

Indian government has ruled out any talks on divesting stake from National Aluminum Company Limited as it will soon become a Navaratna company.

Expressing happiness at NALCO's increasing profits, Mr Sis Ram Ola union mines minister asserted that NALCO would continue to remain as a PSU and hoped that it would continue to achieve increasing profits and pay richer dividends to the government.

Tractor prices rise on revised steel rates

BS reported that tractor manufacturers in northern India have decided to revise prices in the next financial year beginning April 2008 as the prices of steel is skyrocketing. As per report, major tractor manufacturers like Punjab Tractors Limited, International Tractors Limited, Indo Farm Tractors & Motors Limited and HMT Tractors are all in the process of an upward revision of price.

Mr AS Mittal VP of International Tractors Limited said that a tractor of 31 brake horse power may cost INR 10,000 more after April 2008. The prices may rise by about 3% for the tractor industry in general.

Punjab Tractors Limited is also planning to revise the prices between INR 12,000 to INR 20,000 from October 2008.

Mr CM Dhar VP of Indo Farm Tractors & Motors Limited said that "The prices of our brand may be revised by around INR 7000 to INR 8000."

However, the manufacturers are optimistic that the debt relieves announced by Mr P Chidambaram union finance minister in the Budget will help accelerate the sluggish demand for tractors in the next few months.

Punjab fastener makers cut output by 30% on rising cost

PTI reported that, unable to bear the rising cost of production, Punjab based fastener manufacturers have decided to cut down their output by 30%, which will result into shaving off production to the tune of INR 450 crore.

Besides, they are also planning to hire a steel mill in Orissa for meeting their raw material requirement at cheaper rates in order to sustain their businesses.

Mr Narinder Bhamra president of Fastener Manufacturers of India said that "We have now unanimously decided to trim our production by 30% by reducing running time of production by 4 hours per day as we are unable to absorb the increasing cost of production followed by consistent hike made by steel producers in alloy prices."

Punjab produces nut bolts and other fastener items to the tune of INR 1,500 crore per annum.

CIL WCL inks coal supply agreement with Mahagenco

PTI reported that Coal India Limited’s subsidiary Western Coalfields Limited has entered into a coal supply agreement on negotiated price basis with Maharashtra Electricity Generation Company Limited for dedicated supply from Junad extension opencast mine in Yavatmal district, with a production capacity of 0.6 million tonnes per annum.

Mr DC Garg CMD of Western Coalfields and Mr Ajoy Mehta MD of Mahagenco have signed the agreement.

Western Coalfields Limited already has a coal supply agreement on negotiated price basis in respect to 5 coal projects.
1) Adasa project – 9.21 million tonnes per annum
2) Kolgaon open cast project – 0.40 million tonnes per annum
3) Bhatadi open cast project – 0.65 million tonnes per annum
4) Durgapur project – 2 million tonnes per annum
5) Waghoda under ground project – 0.39 million tonnes per annum

Barring Waghoda, Western Coalfields Limited was supplying coal from these mines.

NALCO pays 45% interim dividend to government

National Aluminum Company Limited has announced an interim dividend of 45% on a paid up capital of INR 644.31 crore, amounting to INR 289.94 crore for the financial year 2007-08.

Mr CR Pradhan CMD of NALCO has handed over the dividend cheque for INR 252.67 crore on the 87.15% shares held by Government of India to Mr Sis Ram Ola union minister of mines.

The balance amount of INR 37.27 crore has been disbursed to other shareholders of NALCO like banks, financial institutions and individual shareholders.

Mr Sis Ram Ola union mines minister expressed happiness at the increasing profits being incurred by NALCO and said that in the future it would continue to achieve increasing profits and pay richer dividends to the government.

DVC achieves financial closure for Durgapur power project

It is reported that Damodar Valley Corporation has achieved the financial closure for the 1000 MW Durgapur thermal power station in Bardhaman district of West Bengal.

DVC has tied up an INR 3,120 crore long term loan finance for the project from Rural Electrification Corporation in February 2008.

The project, to be developed in two units of 500 MW each, is estimated to cost INR 4,500 crore and is part of the 5,800 MW capacity addition plan taken up by DVC during the 11th Plan period.

Jharkhand HC allows HEC to go ahead with mortgaging

Ranchi Express reported that Jharkhand High court has allowed the Heavy Engineering Corporation to go ahead with the proposal to mortgage some machines and the plant's building to secure an institutional loan of INR 100 crore.

The court also directed the centre to file an affidavit clarifying the reasons for delay in approving the special revival package prepared for the HEC by the state government. It also sought information about the present status and the steps taken so far for approving the revival package.

Jharkhand government had approved the INR 806 crore special package for HEC's revival and the same was forwarded to the central government for approval. The working capital crisis had led the HEC to request the state government for INR 200 crore which it maintained could be adjusted as and when the revival package was approved.

Government update on renewable energy sources

Mr Sushilkumar Shinde union power minister said that India’s interactive power generation installed capacity from the renewable sources has reached 11273.62 MW till December 2007. It has been estimated that around 84776 MW energy power can be generated.

Rallison Electricals eying INR 1000 crore turnover by 2010

PTI reported that Rallison Electricals Private Limited has put a target to cross the figure of INR 1000 crore by 2010 from current turnover of INR 350 crore due to expectation of immense growth of power generation in the coming years.

Mr Lalit Babbar MD of Rallison Electricals said that "To achieve the target of turnover of INR 1000 crore by 2010, we have planned to set up its new manufacturing unit in Chobanki near Bhiwadi in Rajasthan, for which 10 acre of land has already been purchased and construction at site has begun. By January 2009, production of low tension and high tension wires will be started in the new unit to enable the company to meet the growth in the demand of products due to expected growth in the power generation in the coming years."

Mr Babbar added that due to the best quality of its product, it got 'Cableman of the year 2007 award' from Mr Bhairon Singh Shekhawat the former Vice President of India.

To maintain the quality of the product, Rallison Electricals has signed an agreement with Dutch Council of Netherlands to get its safety mark.

DVC to invest INR 20,000 crore to add 5,000 MW capacity

BL reported that, after taking up a 6,400 MW capacity addition during the 11th Plan, Damodar Valley Corporation has now firmed up plans to add another 5,000 MW generation capacity in the 12th Plan at an investment of INR 20,000 crore.

A senior DVC official said that "We have decided to add new capacities aggregating roughly 5,000 MW at an investment of nearly INR 20,000 crore during the 12th Plan starting from April 2012. Details have not been worked out yet, but we have has decided to install capacities of 1,200 MW each in Panchet, Kodarma, Maithon and Ramgarh."

Talking about the projects for the 12th Plan period, DVC officials said that "In Panchet, we currently have a hydel power plant. We have enough capacity there and have now firmed up plans of setting up a 1,200 MW thermal power plant."

Currently, there are 8 different projects in various phases of implementation
1) Mejia Stage V – 250 MW
2) Mejia Stage VI – 250 MW
3) Chandrapura thermal power station – 500 MW
4) Kodarma power station - 1,000 MW
5) Andal power project– 100 MW
6) Raghunathpur power project – 600 MW
7) Bokaro power project – 600 MW
8) Durgapur power project – 600 MW
The total investments will be about INR 30,000 crore

DVC has also decided to kick off vertical integration that will involve floating JVs in power generation, in the coal sector and other undisclosed fields. It has entered into collaboration with Coal India Limited and BEML to reopen ailing Mining & Allied Machinery Corporation Limited. MAMC is the manufacturer of underground mining equipment that will help CIL and DVC source equipment and spares from this company. It is also looking to enter retail power distribution in Jharkhand, in collaboration with a private party. Companies like CESC and TATA Power have evinced interest in the JV.

Patel Engineering to enhance overseas operations

BS recently reported that Patel Engineering is aiming to ramp up its presence in export markets and plans to invest nearly USD 100 million over the next 2 years in a bid to strengthen its overseas operations.

Patel Engineering is also aiming to earn about 25% of its turnover from foreign markets over the next 2 years as against about 10% of its INR 1132.87 turnover earned from foreign markets in April to December 2007 period. Its total order book at the end of October to December 2007 quarter was nearly INR 5,500 crore.

Mr Rupen Patel MD of Patel Engineering said that "One is witnessing large infrastructure projects being announced in the US and in Algeria and neighboring countries. We are keen to leverage these growth opportunities."

In the domestic market, it is attempting to leverage opportunities from several micro tunneling projects that are being implemented by municipal authorities in urban areas. As part of this strategy, it is planning to invest nearly INR 100 crore over the next 2 to 3 years for purchasing additional tunneling equipment.

Patel Engineering is also looking to shortly complete an overseas acquisition of a coal mine, located either in Mozambique or Australia. It is understood to be looking for an overseas acquisition of a mine in the range of USD 50 to USD 100 million and this acquisition is being done in a bid to ensure adequate coal supplies for its 1200 MW power project, being set up at Bhavnagar in Gujarat.

JBIC to play a big role in Indian hydropower sector – Report

IANS reported that Japan Bank for International Cooperation is set to play a bigger role in the development of India's hydropower sector with the government responding favorably to its request for identifying projects for possible financial assistance.

A senior official at the union power ministry said that "Following JBIC's request, we have started the process of identifying hydel projects for possible financial assistance from the multilateral agency. Key hydropower generators, including state owned companies like NHPC and Tehri Hydro Development Corporation, have lined up proposals for consideration for JBIC funding."

The official said that "We have received proposals from NHPC to avail JBIC loans for its various power projects including the 3,000 MW Dibang and 1,500 MW Tawang in Arunachal Pradesh and 495 MW Teesta in Sikkim. Tehri Hydro Development Corporation has also approached us with proposals for JBIC funding for its 126 MW Jhelam Tamak and 55 MW Malari Jhelam projects."

According to industry experts, lack of long term and cheaper funding commensurate with the payback period of hydropower projects has constrained the government's efforts to accelerate harnessing of hydrogenation potential. The domestic bond market was too small to meet the fund requirement of hydropower projects, which had a normal payback period of 25 to 30 years.

According to them, JBIC could provide not only long term loans at very competitive interest rates to power projects but also offer cheaper financial solutions to manage attendant foreign currency risks.

Government update on energy shortage in Maharashtra

During the period April 2007 to January 2008, the energy shortage in Maharashtra was 16,289 million units or 17.2% of the total and the peak shortage was 4844 MW.

According to the anticipated power supply position worked out by the Central Electricity Authority on the basis of demand forecast made in the 17th Electric Power Survey and the capacity addition program during the 11th Five Year Plan, the energy requirement in Maharashtra is likely to be met in full but the state is likely to face peaking shortage of 3532 MW at the end of 11th Plan.

The energy and peaking shortage in Maharashtra during April 2007 to January 2008 period have marginally reduced to 17.2% and 26.4% respectively as compared to 17.4% and 26.7% during April 2006 to January 2007 period.

Update on NHAI expressways projects

It is reported that, with access controlled expressways attracting massive investments, ministry of road transport & highways has decided to conduct the feasibility study for more such expressways and construction companies eyeing the access controlled expressway projects of National Highways Authority of India are likely to get investment opportunities for at least 4 such projects spread over 495 kilometer over the next few months. They are
1) 70 kilometer Chandikhol Jagatpur Bhubaneswar – INR 761 crore
2) 47 kilometer long Delhi Hapur – INR 474 crore
3) 198 kilometer long Vijayawada Elluru Rajamundri – INR 1,602 crore
4) 180 kilometer long Delhi Agra highway – INR 1,918 crore

The feasibility reports for these projects are already completed and the work is likely to be awarded in about 6 months. These projects are for widening the current 4 lane highways into 6 lanes and operating them for certain durations. Companies would have to bid competitively for these projects on a revenue sharing basis. Thus companies would have to bid on the extent of toll revenue that they are ready to share with the Government if they are allowed to operate the roads. Since these highways are already 4 lane stretches, the road operators can start toll collection even during the project construction phase from an appointed date, mutually decided by NHAI and the road operator. The toll revenues will be routed to an escrow account.

Recently, NHAI has awarded 4 such mega projects of 882 kilometer length, which are likely to cost an estimated INR 10,912 crore. From the NHAI perspective, these projects have emerged as money spinners, with companies willing to foot the entire construction cost and part with 2% to 48.06% of their revenues in the initial leg of the project. At the end of the concession period, which is about 12 to 15 years duration, the winning firms have agreed to part with 12% to 59% share of toll revenues.

The feasibility reports for another 10 projects of similar nature are under preparation. They are
1) 315 kilometer long Kishangarh Udaipur stretch – INR 2,205 crore
2) 235 kilometer long Udaipur Ahmedabad – INR 1,645 crore
3) 190 kilometer long Varanasi Aurangabad – INR 1,330 crore
4) 184 kilometer long Nellore Chilkaluripet – INR 1,288 crore
5) 148 kilometer long Krishnagiri Walajapet – INR 1,036 crore
6) 145 kilometer long Pune Satara – INR 1,015 crore
7) 85 kilometer long Ludhiana Chandigarh – INR 595 crore
8) 80 kilometer long Belgaum Dharwad – INR 560 crore
9) 56 kilometer long Samakhiali Gandhidham – INR 392 crore
10) 55 kilometer long Indore Dewas – INR 385 crore

The ministry has also decided to conduct the feasibility study for 4 such expressways between Delhi and Meerut, Chennai and Bangalore, Vadodara and Mumbai and Dhanbad and Kolkata.

BHPB bid for Rio – IISI pins hope on EU regulators

The International Iron and Steel Institute said that European Union regulators are likely to pose the main regulatory challenge to BHP Billiton's planned takeover of mining rival Rio Tinto.

Mr Ian Christmas secretary general of IISI told the Reuters Global Mining Summit in London that "The battle will be won or lost in a European jurisdiction."

He said that "The jeopardy to consumers is very strong. Already the price of raw materials is accelerating because of tight demand. Do you really want to create artificially tight demand on top of that?"

Mr Christmas said that he saw no economic rationale for combining the two companies. He said "This is a huge transfer of wealth from consumers and society to the owners of holes in the ground. These are not small companies. They do not have problems exploiting natural resources. It seems to be a case of getting big for the sake of it."

Mr Christmas said that Eurofer and the IISI were ready to file formal objections to the bid when the EU asks for them.

Iron ore price negotiations – Rio pushing for freight premium

It is reported that Rio Tinto continues to negotiate for a freight differential in its iron ore pricing talks with Asian steelmakers although world’s biggest iron ore miner Vale has settled the benchmark prices for the next year at a hike of 65%

Rio Tinto has said that it wants a premium added to the price of its product, to reflect that it costs a lot less to ship iron ore to China and Japan from its Western Australian mines, than from Vale's operations in Brazil.

Mr Tom Albanese CEO of Rio told reporters in Toronto that “While we have noted Vale settlements in Japan and Europe and in China, we are continuing to negotiate on the basis of seeking a freight differential, which recognizes the advantages of Australian ore being closer to the Chinese markets.’

He declined to comment on what level of differential the company was seeking.

Vale Xstrata tie up – Chances declining as shares plunge

The London based Times, citing an unidentified person familiar with the situation, reported that Cia Vale do Rio Doce, may cancel its USD 86.2 billion pursuit of Xstrata Plc following a decline in Vale's share price and other negotiating hurdles.

The report added that Vale's discussions with Xstrata's biggest shareholder, Glencore International AG, over the marketing rights Glencore would get if the Vale bid were successful, are so far inconclusive

However, Mr John Meyer head of resources at UK investment bank Fairfax IS Plc said that “This is all part of the posturing. We think this deal will go ahead. Both sides seem to be getting closer to an agreement.''

Vale said on January 21st 2008 that it was in talks with Xstrata over a possible takeover but Mr Roger Agnelli CEO of Vale on February 29th 2008 said that there are limits to what Vale is able to pay for the company.

Glencore 2007 profit jumps to record USD 6.1 billion

Bloomberg reported that the world's biggest commodity trading company Glencore International AG has posted a 15% YoY increase in profit for 2007 as energy, metals and agriculture prices climbed to all time highs.

Its net income climbed to a record USD 6.1 billion in 2007 from USD 5.3 billion in 2006 and sales rose by 22% YoY to USD 142.3 billion.

According to the report, gross income from Glencore's metals and minerals unit increased by 26% YoY to USD 6.5 billion, while that from its energy business climbed by 3% YoY to USD 1.5 billion and agriculture more than doubled to USD 517 million. About 53% of Glencore's profit last year came from mining, refining and other industrial businesses. The rest came from trading commodities.

However Mr Marc Ocskay, a spokesman for the closely held Swiss company, did not confirm the figures and said the earnings are private.

Glencore, based at Baar in Switzerland, was founded in 1974 by legendry Mr Marc Rich, who sold the company to management 20 years later. Glencore is the largest shareholder in Xstrata Plc with 34% stake and has marketing rights to all of Xstrata's nickel, cobalt, ferrochrome and vanadium output. The trading company also advises Xstrata on thermal coal sales for a fixed fee of 50 cents a tonne and provides zinc concentrate to the mining company's smelters.

CSN net 2007 up by 150% YoY

Brazil’s Companhia Siderúrgica Nacional reported a net profit of BRR 2.9 billion in 2007 up by 150% YoY, while steel product sales volume rose by 23% YoY to BRR 5.4 million tonnes. Its net revenue reached BRR 11.4 billion in 2007 up by 27% YoY and EBITDA stood at BRR 4.9 billion up by 54% YoY. Net debt fell by 28% YoY to BRR 4.8 billion from BRR 6.7 billion in 2006.

Highlights of performance are as under

1. CSN posted a net income of BRR 2.9 billion in 2007, a new annual record and 150% YoY

2. Annual steel product sales volume stood at 5.4 million tonnes, 23% more than in 2006 and also Company record. In the Q4 07 alone, sales volume totaled 1.4 million tonnes, up by 18% YoY.

3. Net revenue reached an impressive BRR 11.4 billion in 2007 up by 27% YoY.

4. Annual EBITDA stood at BRR 4.9 billion up by 54% YoY. Once again, this was CSN's highest ever EBITDA figure.

5. Annual crude steel production totaled more than 5.3 million tonnes, up by 52% YoY.

6. In 2007, the Company and its subsidiary NAMISA produced and acquired from third parties more than 21 million tonnes of iron ore. Iron ore sales totaled 10.5 million tonnes in Brazil and abroad, in addition to the 7.1 million tonnes consumed internally by the Presidente Vargas Steelworks.

Romania in the lead for Voelstahlpine steel project

According to Austrian newspaper Der Standart Bulgaria is reportedly in a disadvantaged position in its competition with Romania to attract the EUR 7 billion investment that Austrian steel maker Voelstahlpine is planning to make in the Black Sea region.

Der Standart reported that while the Ukriane and Turkey are also in the race, the main competition is between Bulgaria and Romania and it is rather emotional.

According to the Austrian paper, Bulgaria is trying to attract the investor by offering cheap electricity, whereas Romania's trump cards are its infrastructure and its fast growing auto industry, which needs steel products.

The speaker of Voelstahlpine, however, was quoted as saying that electricity was not as important for the Austrian concern as the logistics, infrastructure, and the supplies of raw materials.

Voelstahlpine is expected to choose the location for its investment in the summer.

Rio announce CAD 500 million expansion program for IOC

Iron Ore Company of Canada and Rio Tinto announced a CAD 500 million expansion program to increase annual production to 22 million tonnes with a feasibility study to increase production to 25 million tonnes. The investment is the first phase of an expansion program that may see a 50% increase in production capability by 2011.

Work will commence immediately to expand IOC's mining and processing facilities in Labrador West and increase transportation capacity on its 418 kilometer railway to its port facilities in Sept-Iles, Québec. The investment includes the purchase of new mining equipment, as well as installation of a new crusher station in the mine and autogenous grinding mill in the concentrator, as well as a 6 kilometer overland conveyor to link them together. New locomotives and rail cars will be purchased to increase railway capacity.

The remainder of the expansion program is currently in feasibility studies and a decision will be made later this year on plans to further increase annual concentrate production to more than 25 million tonnes and pellet production to 14.5 million tonnes.

Mr Sam Walsh chairman of IOC and Iron Ore CEO of Rio Tinto said that the decision highlighted not only the value of Rio Tinto's global platform of iron ore production, but also the level of confidence in market conditions over the longer term. He said "The iron ore market is as tight as it has ever been and our sustained and substantial reinvestment in our operations in Canada and worldwide demonstrates the confidence we have in that market.’

Mr Terence F Bowles president & CEO of IOC said that "This investment secures the long-term future of our operations and improves the livelihoods of those around us. IOC has been the main driver of the Labrador West economy for almost 50 years, and this expansion program ensures that a new generation of families in the region can be confident that there will be rewarding careers for years to come.”

IOC is Canada's largest iron ore producer, with iron ore being one of Canada's most important mineral products in terms of both tonnage and value. Its broad product range is sold globally to all segments of the steel industry including the high growth direct-reduction sector. IOC has 1.3 billion tonnes of iron ore reserves and significant resources and exploration potential beyond this.

Rio Tinto is the major shareholder of IOC with 58.72% stake along with Mitsubishi Corporation having 26.18% and Labrador Iron Ore Royalty Income Fund 15.10%.

Feng Hsin raises rebar prices

The China Post reported that one of Taiwan's largest rebar makers Feng Hsin Iron and Steel Co Ltd has raised wholesale prices to reflect an increase in costs.

With the price adjustment, the company's rebars and shaped steel were quoted at historic highs of NTD 27,500 a tonne and NTD 28,200 a tonne respectively, an increase of NTD 800 per tonne.

According to Feng Hsin officials, the price hike is meant to reflect costs, as the price of steel scrap has increased to USD 530 a ton, while Russian billets rose to USD 830 a tonne and Taiwanese steel billets went up to NTD 25,300 a tonne.

But, industry watchers said that Feng Hsin may knock off some hike from the quoted rebar price and buyers may get the metal for about NTD 27,000.

Territory Resources launches AUD 15.53 bid for Olympia

Territory Resources Ltd has launched an unconditional, AUD 15.53 million takeover bid for mineral sands producer Olympia Resources Ltd after the iron ore miner posted its first interim net profit of AUD 2.037 million.

Territory Resources has advised Euroz Securities Ltd, which will purchase the shares on Territory's behalf, that the offer price will not be increased or extended.

Euroz said in a statement that the offer period will be between March 26 and April 26 and a bidder's statement will be served on Olympia on Tuesday.

In a statement on Tuesday, Olympia Resources said it was considering the terms of the offer but advised its shareholders to take no action at this stage.

In November, after Territory Resources backed out of its bid to takeover manganese miner Consolidated Minerals Ltd, Mr Michael Kiernan chairman of Territory said that the company would pursue fresh acquisition opportunities.

Contract talks stall at BHPB Cerro Matoso ferronickel mine

Reuters reported that labor negotiations at Colombia's Cerro Matoso ferronickel mine were stalled on Tuesday as a strike by workers was about to go into its third week. Cerro Matoso official said that "Talks are stalled and the strike continues and there is no agreement for restarting contract negotiations."

The official added that workers at the plant, which employs some 3,000 people directly and indirectly, want a new two year contract. They are asking the company to improve workplace safety conditions and hire employees to replace those who have retired over recent years due to hearing and lung illnesses.

Mr Roger Herrera president of the Sintracerromatoso union representing Cerro Matoso miners confirming that contract talks were stalled said that "The company does not want to sit down with us.”

Cerro Matoso ferronickel mine is owned by BHP Billiton and normally produces 55,000 tonnes of ferronickel annually or about 4% of the world's nickel.

PT Bumi may raise offer for buying Herald Resources

Bloomberg reported that PT Bumi Resources, which is competing with Indonesian rival PT Aneka Tambang for control of Herald Resources Ltd, may consider raising a AUD 455 million bid for the Australian mining company. It would need to surpass a AUD 505 million bid from Aneka and Chinese partner Shenzhen Zhongjin Lingnan Nonfemet Co.

Mr Dileep Srivastava head of investor relations at PT Bumi by telephone from Dubai said that “We are trying to arrive at a fair value of the company. If it is fair, we might consider raising our bid.''

PT Bumi, based in Jakarta, has offered AUD 2.25 a share for Perth based Herald Resources, lower than the AUD 2.50 offer made by its rivals. It wants control of Herald's Dairi zinc and lead mine in Indonesia as global metal demand surges.

South Korea Reduces H beam imports by 28.7% YoY

According to Steel Daily, H Beam imports into South Korea are down evidently in the January to February of 2008. Statistics show that South Korea H beam imports totaled 66,613 tonne down by 28.7% YoY.

The statistics said that nation wise, China accounts for 56.3% and Japan 38.4%. The average import price in February is USD 755 per tonne CFR, with Chinese cargo at USD 736 per tonne CFR and Japanese at USD 757 per tonne CFR

South Korea H Beam Import Volume Statistics

In tonnes

Xstrata Coal announces commencement of Glendell open cut

Xstrata Coal announced its Glendell open cut operation will commence within the month, having received approval from the New South Wales Department of Planning for the mine’s modification. Under the terms of the consent modification, Xstrata Coal intends to increase the maximum rate of run of mine coal production of Glendell from 3.6 million tonnes per year to 4.5 million tonnes per year.

Glendell Mine is an approved open cut coal mine located at Hebden in the Upper Hunter Valley of New South Wales approximately 25 kilometers northwest of Singleton, 26 kilometers southeast of Muswellbrook and 2 kilometers north of Camberwell Village.

Xstrata Coal will appoint a contractor to open up a box cut on site within the coming weeks. The box cut is the first step in the commencement of operations. As part of the consent modification, Xstrata Coal will implement a thorough and systematic environmental management process to address the key issues of greenhouse gas and energy conservation, air quality, noise and vibration, water resources, and flora and fauna.

Mr Mick Buffier NSW COO of Xstrata Coal said that the Company’s total investment of USD 290 million into Glendell will directly create up to 100 construction and 150 operational jobs over the life of the operation and contribute additional benefits to the local and state economies through employment and other revenue.

Mr Buffier said that “Through our continued investment into the development of new operations, Xstrata Coal is playing an important role in providing new employment and local business opportunities within the Hunter Valley. Glendell will contribute to the ongoing viability of Xstrata Coal’s Mt Owen complex and improve the efficiency of coal production in the area by sharing established coal processing and transportation infrastructure with existing operations.”

Ferrobahia calls off sale of pig iron plant stake

BNamericas reported that Brazilian pig iron producer Ferrobahia has decided to call off for the moment plans to sell a share in its plant to be installed in northeastern state Bahia.

Mr Geraldo Basques president of Ferrobahia in October 2007 had said that the plans included the sale of a 30% stake in the project and that talks were progressing at that time with two international groups. He now said that "The demand is favoring us to carry out the project on our own for now, through financing without ruling out the option of bringing in a partner in the future. He added that "Partners are welcome at any moment.”

Mr Basques said that the 200,000 tonne per year plant is due to start operations by the end of 2008 and is expected to have capacity of 140,000 tonne per year in the first year. The facility will also include two thermoelectric plants, while overall investment has increased to USD 50 million as a result of the real appreciation versus the US dollar.

Disbursements were previously expected to come in at USD 44 million.

Ferrobahia will be the first pig iron producing plant in Bahia.

US ITC to conduct sunset" reviews in FeV from China and SA

The US International Trade Commission voted to conduct full five year sunset reviews concerning the antidumping duty orders on ferrovanadium from China and South Africa.

All six Commissioners found that the domestic group response was adequate and the respondent group response was inadequate, but that circumstances warranted full reviews.

As a result of vote, the Commission will conduct full reviews to determine whether revocation of these orders would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.

The Uruguay Round Agreements Act requires the Department of Commerce to revoke an antidumping or countervailing duty order or terminate a suspension agreement, after five years unless the Department of Commerce and the ITC determine that revoking the order or terminating the suspension agreement would be likely to lead to continuation or recurrence of dumping or subsidies and of material injury within a reasonably foreseeable time.

Japanese steels makers to hike price to rise for FY 2007

JMB reported that averaged steel selling price of Japanese major steel makers including Nippon Steel, JFE Steel, Sumitomo Metal Industries and Kobe Steel will increase by JPY 3,000 to JPY 6,000 to JPY 78,000 o JPY 106,000 per tonne for fiscal 2007 ending March 2008 from fiscal 2006, which represents increases for 5 years in a row.

As per report the price is JPY 30,000 to JPY 40,000 higher than recent bottom in fiscal 2002 due to worldwide steel tight supply and higher cost for raw materials and energy. The steel price is likely to keep increasing for fiscal 2008 due to jump of cost.

Queensland coal rail network body formed

AAP reported that an alliance agreement for a key part of the AUD 3 billion expansion of central Queensland's export coal rail network was signed on Tuesday. The Coal Connect alliance involves Australia's largest rail operator Queensland Rail, Leighton Contractors, GHD and KBR.

As per report the parties will undertake the civil works of the AUD 1 billion Goonyella to Abbot Point project, including the Northern Missing Link and the Buckley to Newlands Upgrade.

Under the network expansion, Queensland Rail is lifting the capacity and performance of the central Queensland coal network including new and upgraded track, and new locomotives and wagons. Queensland Rail in a statement said that "By 2010/11, we will have increased tonnage capacity by almost 60% in Queensland, with the ability to haul 261 million tonnes of coal across all networks.”

Mr Lance Hockridge CEO of Queensland Rail said that the Goonyella to Abbot Point expansion project the biggest rail project in Queensland in 30 years could potentially deliver 100 million tonnes per year through Abbot Point at Bowen. He added that “That translates to well over AUD 10 billion in revenue at today's prices for coal companies and the state's burgeoning coal industry.”

CV United Smelting gets tin export license

Reuters reports that the Indonesian trade ministry granted an export license to another independent smelter, CV United Smelting, on March 5th 2008

This is the 18th license to be granted since the ministry’s scheme to monitor and control exports was put in place on February 23rd 2007. Three new licenses have been issued in the current year to date.

As per a separate report in Asia Pulse, in the twelve months to February the value of Indonesia’s tin exports amounted to USD 1.34 billion. Mr Hartojo Agus Tjahjono director for exports of mining and industrial products said that during that period 15 companies exported 93,735 tonnes of tin.

Assmang says blast could limit ferromanganese output

Reuters reported that South Africa's Assmang will lose up to 50,000 tonnes of high carbon ferromanganese and 7,000 to 8,000 tonnes of refined ferromanganese until the end of June 2008 due to a furnace explosion at its Cato Ridge plant last month.

Mr Jan Steenkamp head of ARM's iron ore unit said that it would start recommissioning its furnaces at the plant towards the end of March 2008.

PT Antam net profit in 2007 jumps by 230% YoY

PT Antam Tbk announced that its audited consolidated net profit increased by 230% YoY to IDR 5,132 billion. The significant increase is mostly due to higher prices of nickel as well as gold and higher sales volumes of nickel ore and nickel contained in ferronickel. A relatively lower increase of Antam's cost of sales boosted Antam's net margin to 43%.

Antam's net sales for the full year of 2007 rose a significant 113% YoY to a record IDR 12,008 billion from IDR 5,629 billion in 2006. The growth is due to increased production and sales volumes of Antam's ferronickel, nickel ore and gold and higher prices. Ferronickel accounted for 48% of Antam's sales, followed by nickel ore at 41% and gold at 9%.

Mr Dedi Aditya Sumanagara president director of Antam said that "With this record setting performance, due to not only higher prices but also significant output expansion, we have created a robust financial foundation and are now ready to launch our next phase of growth investments."

Copper climbs as strike halts ok Tedi mine in New Guinea

Bloomberg reported that Copper rose for the first time in four days in London after a strike started at the Ok Tedi mine in Papua New Guinea. Copper for delivery in three months on the London Metal Exchange gained by USD 130 or 1.6% to USD 8,440 a tonne.

The mine produced 169,184 tonnes of copper in concentrate last year, equal to about 1% of world mine supply. Concentrate is a semi processed material sent to smelters.

Ms Jane Mills a spokeswoman of Ok Tedi said that employees at the mine stopped work to demand more pay. Mills said that “The strike at Ok Tedi is illegal. The stoppage has affected mining and milling operations as well as concentrate handling and shipping at Kiunga port.”

Mr Robin Bhar an analyst at UBS AG in London said that “The concentrate market is very tight. The strike would help to tighten it up further should it last longer than a week.”

According to Lisbon based International Copper Study Group, copper has gained for six consecutive years as demand from China, the world's largest user of the metal, expanded. Higher copper prices boosted profit at miners including Rio Tinto Group and Xstrata Plc World mine output was 15.8 million tonnes.

Harsco acquires Baviera SRL in Romania

Worldwide industrial services company Harsco Corporation announced that it has acquired Romania based Baviera SRL, an exclusive distributor of Harsco’s Hünnebeck division formwork and scaffolding products in Romania that will give Harsco a direct operational presence in one of the fastest growing construction markets in Eastern Europe. Terms of the acquisition were not disclosed.

Mr Geoffrey D H Butler president and access services group CEO of Harsco said that “Baviera SRL is an ideal platform for our continuing strategic expansion in Eastern Europe, with its strong customer base, excellent product knowledge and solid market expertise. Until now, Baviera has mainly focused on equipment sales. We plan to establish an equipment rental and related engineering support services business in Romania that will enhance our ability to pursue further growth opportunities and increased market share, similar to our successful experience in Poland.”

Power reduction in SA impacts BHPB Aluminum

On January 24th 2008, the South African national power company, Eskom, determined that it had insufficient power to meet demand and an emergency 10% reduction in power consumption by many large industrial users, including BHP Billiton was mandated.

BHPB release said that “BHP Billiton’s contracts with Eskom specify that the power supply to our aluminum smelters can only be interrupted approximately 1% of the time per calendar year. Despite this and respecting the emergency situation faced by the country, BHP Billiton has reduced its demand by the requested 10. Power reductions were initially achieved by reducing power by approximately 10% at all three of our Southern Africa smelters. This operating methodology is unsustainable. As we understand that the power reductions are likely to last for a number of years, we have assessed our options to more effectively deal with a longer term reduction in power.”

BHPB said that “As a result of this assessment we plan to take the bulk of the power reduction at Bayside while Hillside and Mozal will continue at reduced operating levels to comply with the 10% mandatory overall power demand reduction. We have therefore commenced consultations with our employees about a possible closure of operations of the B and C potlines at Bayside. Total annual production loss will be just over 120,000 tonnes across all three smelters including approximately 92,000 tonnes from Bayside.”

Dayou DMC to acquire steel frame and ship processing business

South Korea’s Dayou DMC Co Ltd announced that it has decided on March 10th 2008 to acquire steel frame and ship processing business from Duseong Heavy Industrial Inc for KRW 3,272 million, in a bid to improve its revenue through business reorganization.

Mostecka Uhlena majority shareholder changes ownership structure

Thomson Financial reported that Czech Coal NV has changed its shareholding structure after two of the four owners sold out their stakes in the company, which is the majority owner of Mostecka Uhlena, the largest Czech lignite mines in terms of coal deposits.

Individuals Mr Vasil Bobela and Mr Petr Pudil are now the only owners of Czech Coal, which holds a 51% stake in Mostecka Uhlena.

Czech Coal did not disclose the value of the transaction, but newswire Euro24 reported it was worth CZK 11.5 billion.

Power utility CEZ has been trying to buy Mostecka Uhlena, which supplies coal to its 1000 MW plant in Pocerady, in the north of the Czech Republic, but has failed so far due to the high price demands from Mostecka Uhlena 49% minority stakeholder.

Rio Tinto Alcan AP Xe technology to reduce energy consumption

Rio Tinto Alcan at the TMS 2008 Conference at New Orleans in USA announced that it has begun development on the next generation of its AP Technology series. To be called AP Xe, this new technology could potentially lead to a step change in energy consumption of up to 20% along with a reduced environmental impact and improved full economic cost.

AP Xe will be developed in phases, including a potentially workable drained cathode that, taken together with other portfolio technologies under development, could result in a lowering of unit energy consumption by up to 20%. This technology is designed to be retrofitted to previous AP series cells. While the maximum energy consumption savings are expected from Greenfield applications, significant savings could also be achieved in retrofitted cells.

Ms Jacynthe Côté president primary metal of Rio Tinto Alcan said that "In a world increasingly concerned with climate change and the environmental impact of industrial growth, this new technology promises a potential breakthrough. The development of a greener, more energy efficient production process, combined with aluminum’s well established attributes such as light weight and recyclability, makes for a winning combination. The AP Xe will provide us with the technology we need for future generations of Greenfield and Brownfield expansions.”

Ms Cote added that "While we continue to develop and improve our highly successful and environmentally responsible AP30 aluminum technology platform, and move forward with the recently announced pilot for AP50 at Quebec in Canada we are devoting a large portion of our R&D to the development of future generations of our AP Technology.”

Arpeni wins USD 342 million deal to ship coal to power plant

ANTARA News reported that listed cargo carrier PT Arpeni Pratama Ocean Line has been awarded a contract worth IDR 3.08 trillion (USD 342 million) to transport coal to coal fired power plant Tanjung Jati B.

Mr Ronald Nangoi corporate secretary of PT Arpeni Pratama said the company will provide two Panamax ships to carry coal under the 15 year contract. Under the contract, Arpeni will transport 4 million tonnes of coal per year from Kalimantan to the power plant at Jepara in Central Java.

Apollo Minerals appoints two new directors

Newly listed diversified Australian resources company Apollo Minerals Ltd on March 7th 2008 appointed Mr Michel Lambert as an executive director and Mr Wang Jianguang as a non executive director of the Company.

Samsung Heavy wins USD 1.38 billion LNG producer orders

Reuters reported that South Korea's Samsung Heavy Industries Co had won a total of USD 1.38 billion in orders to build liquefied natural gas vessels for unidentified companies in Europe.

Samsung in a filing with the Korea Exchange said that it would build a KRW 438.9 billion (USD 458.5 million) LNG producer, a ship that can liquefy, store and offload natural gas offshore, by October 2011.

Samsung also said it would built two such ships worth KRW 877.8 billion (USD 916.9 million) in a separate order, due by June 2011. It added the company that placed the second order had originally signed a deal last year for two simple LNG carriers but has upgraded the order to LNG producers.

Rio Tinto to sell its 30% interest in Corani property in Peru

Rio Tinto Mining and Exploration Limited has entered into an agreement with Bear Creek Mining Corporation to sell its 30% interest in the Corani property located in Peru for purchase price consideration of USD 75 million comprised of the issuance of 3,871,000 common shares of Bear Creek Mining Corporation to QIT Fer et Titane Inc, an indirect wholly owned Quebec based subsidiary of Rio Tinto plc and an affiliate of Rio Tinto Mining and Exploration Limited.

The payment of USD 20 million in cash by December 31st 2008 and a further payment of USD 25 million in cash by December 31st 2009. In the event of a change of control of Bear Creek Mining Corporation, the deferred cash payments will be accelerated. The common shares to be issued to QIT at closing will be subject to a four month hold period under applicable securities laws and to additional resale restrictions agreed to with Bear Creek Mining Corporation.

The completion of this sale transaction is subject to customary conditions and the approval of the TSX Venture Exchange.

Global shipbuilding industry booming

It is reported that large number of ship plate orders is driving very strong global demand and annual demand will reach 30 million tonnes in the next three years.

According to the South Korean shipbuilding industry, the requirements from China, Japan and Korea are 6.9 million tonnes, 4.2 million tonnes and 8.3 million tonnes, respectively. The total quantity is about 20 million tonnes.

Current average price for ship plate is around CNY 6,000 per tonne.

(Sourced from YIEH.com)

Japanese scrap price increases

Japanese Tokyo Steel is raising the purchase price for scrap. As per report the price of H2 scrap in Kanto area has raised by JPY 1,000 to JPY 1,500 per tonne and the new price soars to JPY 50,000 to JPY 50,500 per tonne.

But some dealers said that the price hike is not a normal situation in this moment. It is predicted the price will drop in the near future.

(Sourced from YIEH.com)

US Steel to establish USD 45 million pre tax reserve

United States Steel Corp announced that the Indiana Court of Appeals reversed an earlier decision of the Indiana Utilities Regulatory Commission involving a rate escalation provision in US Steel's electric power supply contract with Northern Indiana Public Service Company.

United Steel said it would seek a review of the verdict by the Indiana Supreme Court, however, intends to establish a pre tax reserve of about USD 45 million in its first quarter results pertaining to previous year effects.

It said that the Court's decision on March 7th 2008 held that a rate provision in a 1999 agreement between the parties applied to certain electric demand charges since October 1st 2005 that will continue until July 2009 and remanded the case to the Indiana Utilities Regulatory Commission for calculation of the charges.

United Steel expressed disappointment at the outcome of the case having won on a summary judgment motion before the Indiana Utilities Regulatory Commission.

Ethiopia to build a 5000 kilometer railway network

It is reported that Ethiopia is planning to build a 5000 kilometer railway network. The report quoted Mr Junedine Sado transport and communication minister of Ethiopian as saying that work on a railway network spanning 5,000 kilometer is expected to start in the near future and that the government had established an agency to look into the construction of the railway line.

Mr Sado said that "As the country develops its natural resources in the field of mining exploiting its vast deposits of iron ore in the west, gas and oil fields in the east and commercial agriculture it requires an effective transportation system.”

Atakas and MMK JV to break ground on March 15th 2008

It is reported that Turkish Atakas Group and Russian MMK will organize a groundbreaking ceremony on March 15th 2008 in Dortyol town of southeastern province of Hatay in Turkey for their proposed steel mill.

The new factory will specialize in production and processing of hot and cold rolled sheet as well as galvanized and color coated rolled steel products.

Pakistan looking to make steel from local iron ore – Report

A study by The News revealed that, with the global steel rates rising, it has become economically viable for steel mills to use local iron ore in Pakistan. Even Pakistan Steel Mills has started using local iron ore.

As per report, local and international investors are studying the possibility of setting up small to medium steel plants that would use locally available iron ore. Producing steel from indigenous ore was earlier ignored due to high extraction cost and low iron content. However, the soaring steel and ore price in global market has made the idea of extracting steel from local ore feasible. The investors are optimistic about safety of their investment as the demand for steel is rising rapidly and the local production is almost stagnant.

The study revealed that the major iron ore reserves found in Pakistan amount to 947.5 million tonnes. The deposits are present in Punjab, NWFP and Balochistan. The ore from these deposits contains 20% to 60% iron. Pakistan Steel Mills has successfully used local iron ore and is expected to gradually reduce the dependence on imported iron ore.

Another advantage that the investors in steel sector found in Pakistan is the availability of huge deposits of coal that is a main energy source for steel melting. Coal reserves in Pakistan are mainly concentrated in Thar that has got second highest coal reserves in the world. Coal is also found in Punjab and Balochistan and some nominal quantity has also been discovered in Northern areas.

Taking advantage of this situation the Engineering Development Board of Pakistan has chalked out a plan to increase the production capacity of indigenous steel to 10 million tonnes from the current capacity of 5.190 million tonnes.

Mr Almad Hyder CEO of Engineering Development Board of Pakistan said that both local and foreign investors would take advantage of the current favorable investment in steel sector in Pakistan. He added that a foreign Middle East based group is already installing a unit of the size of PSM at Karachi while some investors have completed their feasibility studies for establishing some units in Punjab and NWFP.

In 2005-06, the steel smelters and the Pakistan Steel together produced 3.9 million tonnes of steel products against local demand of 7.3 million tonnes. The smelters and re rolling mills use imported, PSM produced billets or scrap to produce steel products. The PSM continues to increase the rates of steel products in line with the global rates because the iron ore it imports has also become more expensive.

Mabani Steel to award Yanbu plant contract soon

It is reported that Ras al Khaimah based Mabani Steel will award the contract for the construction of a pre engineered steel building plant and hot-rolled steel structure facility in Saudi Arabia within a month.

As per report, the turnkey contract for work on the plant in Yanbu is worth SR135m (USD 36 million) and 7 local companies have been invited to bid for the work.

The facility's PEB output will be 6,000 tonnes a month and Hot rolled steel structure capacity will be 2,000 tonnes a month.

Mabani's move into Saudi Arabia follows the completion of the expansion of its UAE plant at Ras al-Khaimah where production capacity is 6,000 tonnes a month of PEBs and 2,000 tonnes a month of HR structures.

Mr Muayyad Khudairi, president of Mabani said “By the end of the year we will have the biggest capacity for PEBs in the Gulf. We are now looking at expansion in Pakistan and Africa."

Iran inks deal with Siemens for 150 locomotives

Mehr News Agency quoted Mr Hassan Ziari MD of Iran Railways Company as saying that Iran has signed a USD 450 million deal with German electronic giant Siemens to build 150 locomotives. He said that Siemens vowed to deliver the first train to Iran’s fleet within next 30 months.

Mr Ziari said that as part of Iran's 10 year railway plan, some 600 locomotives, 200 passenger and 2,000 cargo wagons are required to meet Iran’s needs.

Siemens AG is Europe's largest engineering conglomerate. It is a conglomerate of 6 major business divisions, automation & control, power, transportation, medical, information & communication and lighting.

Pakistan to verify cement makers production details

Business Recorder reported that the audit of cement manufacturers in Pakistan would verify the supplies made to the mega construction projects, whereas actual production would be confirmed after going through production data. As per report, cement manufacturers have received letters from the tax offices for carrying out audit of tax records.

The report added that the All Pakistan Cement Manufacturers Association and the Federal Board of Revenue has reached consensus on full cooperation by the cement manufacturers during scrutiny of tax records by the sales tax auditors.

The report cited some sources as saying that “Audit of the cement factories has been started to ascertain the causes of decrease in sales tax collection in 2007-08. Federal Board of Revenue would apply different methods for checking production of cement. For this purpose, declared production would be reconciled with the daily production report and laboratory production reports."

The laboratory production environment would help in recording production, strength, quality and quantity of cement and other relevant data on mixing ingredients used in the production of finished product. The production would also be reconciled with material consumed, finished goods produced and transferred to godowns. Primarily, sales tax audit would focus on suppression of purchases, consumption of packing bags and production supply of cement. They said that the auditors would check the documents to verify the expansion of cement plants and subsequent increase in production. Bank statements would be checked to compare financing and stocks with the production and supply of the commodity. The audit would also verify the data of cement factories available with the computerized tax profiles and third party information. The auditors would also analyze the yield ratio, standard mix and wastage involved during the production process.

India and Bahrain to sign MoU on labor cooperation

It is reported that India and Bahrain will sign a MoU on labor and manpower co operation during Mr Majeed Al Alawi Bahraini labor minister’s visit to New Delhi in April 2008.

Mr Alawi said that "I shall make use of the opportunity to sign the MoU, which will help further strengthen the ties between Bahrain and India in labor and manpower areas."

Mr Alawi said that the relations between the two countries go beyond labor matters. He added that "Historically and culturally we are strong partners. Every effort should be made to take this relationship to new heights."

Meanwhile, Mr Balkrishna Shetty Indian ambassador to Bahrain said that the MoU would protect the welfare of Indian workers in Bahrain. He added that "It also helps ensure the smooth flow of workers from India to Bahrain as per the requirements of the kingdom. The MoU will cover a clause to ensure that the right person is recruited for the right job with proper salary."

India was forced to put on hold a proposed measure which disallowed its unskilled workers to leave for Bahrain unless they had contracts from employers stipulating the minimum wage of BHD 100 a day following resistance from Bahrain.

Government warned about the power shortages in Pakistan

Pakistan's Planning Commission and National Electric Power Regulatory Authority have warned the government about a rising distortion in power generation capacity that is heavily tilting towards expensive thermal generation compared with much cheaper hydel resources. They have informed that the current public hue and cry revolved around the shortages but this would soon turn into a question of unbearable increase in cost of production.

They said that the ratio of Pakistan’s hydel generation capacity would decline to less than 20% by 2010 from the current 28% because of increasing number of contracts being signed for thermal power generation. Therefore, the government is advised to be careful in increasing generation capacity through short term solutions of thermal power generation at exorbitant tariffs and should strive for maintaining 70:30 ratio between thermal and hydel power generation.

Hydel power generation current winter fluctuates around 1500 MW to 2000 MW against total supplies of about 11,000 MW to 12,000 MW, mostly coming from high cost oil based thermal projects. The situation turns unaffordable for the economy because fuel cost accounts for more than two third part of thermal tariff that keeps on rising with international prices and currently average beyond PKR 7 per unit. On the contrary, the aggregate hydel power tariff from Tarbela, Mangla and Ghazi Barotha comes to less than PKR 0.3 per unit.

Meanwhile, Pakistan government were shocked to know that current hydel power generation had dropped to just 13% in the recent days of winter against its capacity of about 28% because of lower availability of water for power production.

Oman Oil to pay mostly with assets for MOL stake

Reuters reported that Oman Oil Company could pay for most of its 8% stake in Hungarian oil company MOL MOLB BU with assets.

Mr Zoltan Aldott deputy CEO of MOL said that the exact terms of the deal still need to be ironed out as some assets under consideration have third party owners with right of preemption.

Meanwhile, Mr Zsolt Hernadi chairman & CEO of MOL said that if MOL receives all the assets it is seeking, the majority of the purchase will not be in cash.

Iran to approve EUR 150 million loan for power sector projects

Mehr News Agency reported that Iran’s cabinet of ministers has concurred in making an appropriation of EUR 150 million loan out of foreign exchange reserve fund for constructing a dam and a power plant in Nicaragua.

The loan is due to be repaid in 22 installments within 10 years with a 5% interest rate.

According to ministry of economic affairs and finance, Export Development Bank of Iran is regarded as the acting bank. The Export Guarantee Fund of Iran has undertaken to indemnify for Nicaragua’s non fulfillment of its obligations.

ICD initiates various real estate & investment projects

Arab News reported that the private sector in the member countries of Islamic Development Bank can look forward to greater assistance from its arm Islamic Corporation for the Development of the Private Sector.

This follows a proactive stand newly taken by ICD under the direction of Mr Khaled M Al Aboodi CEO of ICD. He said that "Over the years, we examined and assisted the projects that came to us. But now, additionally, we have become more proactive. We explore the prospects, identify them and facilitate financial assistance in our member countries."

Mr Al Aboodi said that ICD had initiated certain real estate as well as banking and investment projects in Saudi Arabia and various member countries. Ewaan Realty Firm is a new real estate firm capitalized at SAR 400 million that was launched in Jeddah on December 3rd 2007. Ewaan International Housing Company is now all set to unveil its maiden project. He added that "We are focusing on fund management. The first SAR 300 million fund for Ewaan’s real estate project will be issued by June or July 2008."

Ewaan’s vision is to construct housing complexes in various areas in Saudi Arabia for the low and middle income segments and develop houses in the most efficient and effective way with a view to providing fair price for investors and end users. It plans to increase the real estate perception and understanding in Saudi Arabia through opening new channels for investors, especially with the region experiencing high liquidity and facing limited investment channels.

Lemissoler acquires 5 vessels and plans to buy 8 container ships

It is reported that Bahrain based Lemissoler Maritime Company has acquired 5 specialized vessels and is looking to buy 8 container ships in two phases in 2008 as part of its initial fleet.

The acquisition of 5 vessels, which transport paper products to the US and South America from the mills in Canada, included their long term charter agreement while the container ships will be on long term charter contracts with global companies. All the vessels are registered with Lloyd's Register.

Mr Abdullatif Mohammed Janahi board member and CEO of Venture Capital said that it invested in the shipping industry because it facilitates 90% of world trade, making it the lifeblood of the global economy. He added that this investment opportunity would yield an annual dividend of 9% payable every 6 months and a 24% internal rate of return at exit to investors.

Lemissoler Ship management Limited, the management arm of Lemissoler Shipping, has been appointed as the new company's operating manager. Mr Philippos Philis board member and CEO of Lemissoler Shipping said that his office would be able to expand its fleet of vessels under management to 13 from 5 following the creation of the JV. He added that "This will also help us expand geographically by entering the Gulf region in order to respond to exceptional growth in the regional shipping industry driven by the large-scale import or export traffic in a highly populated region."

Niko to invest USD 32 million in oil exploration in Pakistan

Daily Times reported that, to boost Pakistan’s economy by substituting imported oil and gas with indigenous supplies, Canadian Company Niko Resources Limited will invest USD 32 million for oil and gas exploration over 4 blocks located in the Arabian Sea. Niko also plans to invest more than USD 200 million subject to availability of viable structures after conducting seismic survey.

According to details, Pakistan government has already granted petroleum exploration licenses with Government Holdings Private Limited and production sharing agreements with GHPL and Niko Resources Limited over 4 blocks, located in the Arabian Sea. They are
1) Offshore Indus North, covering an area of 2466.24 square kilometers
2) Offshore Indus X, covering an area of 2482.83 square kilometers
3) Offshore Indus Y, covering an area of 2482.33 square kilometers
4) Offshore Indus Z, covering an area of 2489.49 square kilometers

The execution of the new production sharing agreements forms an integral part of the government’s drive to attract investment in the oil and gas sector and boost Pakistan’s economy by substituting imported oil and gas with indigenous supplies. To meet this objective, the unexplored offshore region is being given special emphasis where an oil and gas discovery can provide a major impetus for attracting new investments significantly affecting exploration landscape of Pakistan.

Pakistan government is making all out efforts to enhance oil and gas exploration activities through investment friendly policies. Therefore, in order to provide further incentives, Petroleum Policy 2007 has recently been promulgated which is rated as one of the best policies in the region.

NPC inks EUR 18 million petrochemical deal with Ammonia Casale

Mehr News Agency reported that Iran’s National Petrochemical Company has signed a EUR 18 million contract with Switzerland based Ammonia Casale SA of to buy the license for establishment of 3 ammonia producing units in Zanjan, Golestan and Lordegan petrochemical complexes.

Ammonia Casale SA has guaranteed the quantity and quality of products. Each of the units will cost EUR 6 million and will have the daily production capacity of 2,050 tonnes of ammonia.

Engineering and construction of the units and their side facilities will be executed by Iranian companies under management of National Petrochemical Company.

On March 4th 2008, National Petrochemical Company had awarded a EUR 7.816 million contract on urea producing units in the same petrochemical complexes to Stamicarbon Company of the Netherlands.

Qatargas 2 Project wins Excellence in Energy Award 2008

The Peninsula reported that Qatargas 2 Project has received the Excellence in Energy Award 2008 at a red carpet ceremony held at Jumeriah Beach Hotel in Dubai.

The Qatargas 2 project was nominated in two categories for both best project and best project financing.

On accepting the award, Mr James Adams COO of Qatargas 2 said that "It is great recognition for this truly pioneering project. The Qatargas 2 project will be the first 7.8 million tonne liquefied natural gas processing train and is leading the way in the economies of scale and innovation used in the industry. This award is recognition for all the hard work of many people around the world who have made this project happen."

Qatargas 2 is a JV between Qatar Petroleum, ExxonMobil and French Total.

Qena Cement setting up a cement plant in Egypt

Mr Mahmoud Mohieddin investment minister of Egypt said that production capacity of a newly established cement factory by Egypt based Qena Cement Company will reach 1.5 million tonnes. Mr Mohieddin said that 30% of the factory’s production will be exported and the remaining 70% will be allocated to meet needs of the local market. The EGP 1.6 billion factory will create more than 527 job opportunities.

The project, which will be built by the Holding Company for Chemical Industries, Al Qawmiya Cement, Holding Company for Insurance and Arab Contractors Company, will be completed in September 2010.

Mr Nabil El Gabri chairman of Qena Cement Company said that local cement production reached 38 million tonnes in 2007 as against 36 million tonnes in 2006.

Chinese mills looking at USD 900 FOB for HRC exports

It is reported that export offer for HRC steel coil are still on increasing trends despite weakening of domestic market prices. As per report, the highest quotation for commercial HRC has jumped to USD 860 per tonne to USD 870 per tonne FOB and other prevailing offers are at USD 840 per tonne USD 850 per tonne FOB.

Steel mills told Mysteel that there are more enquiries than export allocation and the lowest acceptable contract price is USD 830 per tonne FOB. Supply is said to be tight and export prices are expected to approach USD 900 per tonne FOB in the end.

A Shanghai based trader said "Though there is strong likelihood that prices are going to reach USD 900 per tonne FOB, we doubt it will sustain for a long period.”

(Sourced from MySteel.net)

Chinese export and import details for February 2008

According to China customs on its website said that China exported 3.11 million tonnes of finished steel products in February 2008 and 8.75 million tonnes for the January to February 2008 down by 17.2% YoY from January to February 2007. The report added that no semis were exported in February 2008.

In million tonnes

In million tonnes

Iron ore price negotiations – Stalled on freight premium

It is reported that the talks on prices of iron ore between China's steel makers and BHPB and Rio are not concluding over the issue of shipping costs.

Mr Zhang Xiaogang GM of Angang Steel Group and the director of the China Iron and Steel Association said that suppliers BHP Billiton and Rio Tinto want to add transport costs to an overall supply agreement that has already included a 65% price hike. Mr Zhang said “Australia is trying to add transportation costs' to the 65% increase already agreed on for iron ore supplies this year.’;

Mr Zhang asserted that “The Chinese side does not want to accept that.”

Mr Zhang declined to give further details by saying only that negotiations continue between the suppliers and Baosteel as the lead company on the Chinese side.

Wugang aiming for 7% profit growth in 2008

China daily reported that Wuhan Iron & Steel Group, China's fourth biggest steelmaker, is aiming to increase its profits by 7% in 2008 despite rocketing prices of overseas iron ore.

Mr Deng Qilin president of the State owned company based in Hubei province said it expects to reap CNY 10 billion in profits this year up from CNY 9.3 billion in 2007. He said "We are determined to achieve the target, although we are facing a big challenge from price hikes of iron ore."

Mr Deng said his company will speed up development of an iron ore project with a total proven reserve of 1.6 billion tonnes in western Hubei this year. He said Wugang is also in talks with foreign partners to join iron ore development in many countries, such as Cambodia and Australia.

Mr Deng suggested a deputy of the ongoing National People's Congress that the State should act to boost Chinese steel producers' say in the international iron ore market and further support them to explore the material at home and abroad. He said "Price hikes of imported iron ore will inevitably result in price rises of steel products, which will push up prices of other commodities. This will bring about risks in our economy."

Mr Deng said Wugang plans to raise its crude steel production to 22 million tonnes this year from 17 million tonnes last year. It expects its sales revenue to exceed CNY 100 billion up from CNY 80.2 billion.

Ansteel signs cooperation agreement with Siemens China

Xinhua reported that Ansteel Group just signed an agreement with Siemens China on cooperation in material supply, production management, staff training and emergency service.

As per report the Ansteel Siemens agreement was signed after Ansteel concluded a long term cooperation agreement with Shell China on material purchase, lube equipment management, oil consumption control and oil products storage management.

Mr Fu Wei deputy general manager of Angang Steel Company Limited said that, with the improvement of automation of equipment, traditional maintenance method could no longer satisfy steel giant's large scale, constant and intensive production demand.

He added that Ansteel would join hands with more enterprises outstanding in equipment filed to carry out cooperation in production management.

ArcelorMittal inks cooperation pact with Baoshan District

It is reported that the signing ceremony for cooperation memo between Baoshan District of Shanghai and ArcelorMittal was held on March 6th 2008. The major leaders of Baoshan district and Mr Dirk Matthys CEO of Arcelor Mittal China were presebt on the occasion.

They signed the memo on the development of steel service outsourcing industry, which aims to set up long term cooperation ties. They are going to cooperate in terms of outsourcing for steel logistics, research and development, IT service etc.

Handan Steel starts to make high strength galvanized steel

It is reported that Handan Iron & Steel Group has started to produce the new product high strength SGC 540 galvanized steel in bulk, finishing 3513 tonnes in February.

As per report high strength SGC 540 galvanized steel is a new CR species used in inner decoration and structure of constructions, with good performances in corrosion resistance, yielding intensity and extension.

Baosteel plans to build two scrap bases

It is reported that Baosteel plans to build two scrap bases in Chongqin and Jiangsu province. It has signed investment intention with two local governments at the end of January to build scrap storage, processing and transportation bases with the processing capacity of 500,000 tonnes to 800,000 tonnes per year. It is predicted to finish by the end of this year.

Baosteel also plans to build scrap bases in Guangdong and Wuxi city, but the details are not clear at present. Scrap bases of Baosteel also include in Taizhou of Zhejiang, Ningbo and Jiashang etc.

As per report scrap base in Chongqin covers an area of 9.47 hectares located in Degan Industry Park with the predicted investment of CNY 150 million, and Jiangsu base located in Dajiao town with an area of 5.33 hectares and investment of CNY 200 million.

Coal mine fire kills six in North China

Xinhua reported that 6 people were killed in a coal mine fire in north China's Shanxi Province.

An official with the Yangquan municipal government said the fire broke out at 12:30 PM on Sunday in a private mine in Pingding County when 21 miners were underground. He said 9 people managed to escape the fire but 12 were trapped. Six miners were later rescued.

The Haixiang Coal Mine Co Ltd which belongs to Xishuohuang Village of Guanshan Town has all the licenses required and an annual production capacity of 90,000 tonnes.

China to close 13,000 MW of power capacity in 2008

According to China's economic planning agency, the National Development and Reform Commission will close down inefficient production facilities in the steel, cement, iron and power sectors as part of efforts to reduce the environmental impact of the country's breakneck growth.

NDRC said in a statement that it will close down 13,000 megawatts of power generating capacity this year. It will also close down steel making capacity amounting to 6 million tonnes, 14 million tonnes of iron making capacity and 50 million tonnes of cement making capacity.

NDRC said it would also strengthen tax reforms for energy saving companies and impose penalties on big polluters. It added that financial support will be provided to help central and western regions eliminate outdated capacity.

Mr Wen Jiabao premier of China said the moves are in line with government efforts to cut down inefficient production capacity across China, which has become one of the world's biggest polluters. He said that “This year is crucial for meeting the obligatory targets for energy conservation and emissions reduction set forth in the 11th Five year plan, and we must increase our sense of urgency and intensify efforts to make greater progress. First, we will implement a plan to close down backward production facilities.”

Chinese firm in Zambia to resume construction after unrest

AFP reported that the construction of a USD 200 million Chinese copper smelter in Zambia will resume next week after days of unrest which led to the sacking of some 500 workers over labor disputes.

Mr Sun Chuanqi Company secretary said the firm has reinstated 220 workers from the 500 originally dismissed for causing unrest at the company, whose property was destroyed in a protest over poor wages.

Mr Chuanqi said in a statement “The situation has normalized. We expect to resume construction and those workers that have been reinstated would remain so long as they did not cause any trouble.”

Chinese nickel pig producers facing high costs

Platts cited Mr Xu Aidong an analyst from state owned Beijing Antaike Information Development as saying that higher production costs among Chinese producers for pig iron with nickel content have lifted the minimum tolerable nickel price level for them to sustain operations to USD 20,000 per tonnes in 2008 from USD 15,000 per tonnes in 2007.

Mr Xu added that international nickel prices looked set to breach USD 35,000 per tonnes mainly on the back of supply concerns, the persisting weakness in US dollar and recovering demand from European stainless steel producers. This will indirectly help to lift China's production of pig iron with nickel content.

Mr Xu also added that this scenario is similar to that seen in 2007 but in 2008, domestic nickel prices will not be as volatile. China's production of pig iron with nickel content in 2008 will act as a stabilizer in the international nickel arena.

At the end of February 2008, nickel ore totaled a high of 5 million tonnes to 6 million tonnes in major Chinese ports. High nickel production on the back of higher nickel ore stocks, however, will exert downward pressure on domestic nickel prices.

China Coal Energy February output up by 12.8% YoY

It is reported that China’s second largest coal producer China Coal Energy Co Ltd produced 15.83 million tonnes of coal in February 2008 up by 12.8% YoY as compared to 2007.

As per report, China Coal Energy Co also produced 556,000 tonnes of coke in the month up by 19.3% YoY, generated 280 million kilowatt hours of electricity; produced 15,000 tonnes of electrolytic aluminum; sold 11.74 million tonnes of coal in the domestic market and exported 2.14 million tonnes of coal.

Recently China Coal Energy debuted on the Shanghai Stock Exchange. It plans to put the fundraising into a 3 million tonnes dimethyl ether project in Erdos, Inner Mongolia Autonomous Region, north China and a 600,000 tonnes alkene project in Heilongjiang Province, northeast China, which are scheduled to be put into production in 2011.

Siemens bags major order from China Light and Power

After successful completion of its first supply system expansion project in Hong Kong, Siemens Energy has now received a follow up order worth about EUR 300 million from China Light and Power. Over the next five years, Siemens will further modernize and expand the power distribution network of China’s third largest metropolitan region. The latest order comprises the delivery, installation and commissioning of about 2000 turnkey distribution substations with medium voltage switchgear.

Mr Ralf Christian CEO of the Power Distribution Division in the Siemens Energy Sector said “This huge follow up order highlights the great trust that Siemens enjoys among its customers. He said it’s the largest order that Siemens has ever been awarded in the medium voltage technology area. As a result, Hong Kong will have a highly reliable medium-voltage power supply. Hong Kong is one of the most densely populated regions on earth.

In 2001 China Light and Power commissioned Siemens to modernize and expand Hong Kong’s power distribution network for the first time. In the course of this contract, which had a total duration of seven years, more than 2500 turnkey medium voltage distribution substations were constructed. The order, worth over EUR 250 million, also included the delivery of the transformers and the tele control system.

China eying strategic reserves for coal and gas

It is reported that Beijing is drawing up a blueprint for strategic energy reserves that will focus on natural gas, coal and uranium once top priority crude reserves are complete.

Mr Ma Fucai deputy director of the Office of the National Energy Leading Group said the plan will also compel the country's oil firms to build up commercial stocks to complement the state owned supplies. He said "Our top priority is to build strategic oil reserves, which are almost complete. The system will then be expanded to other key energies."

Mr Ma said China also plans a second stage of crude storage, which would involve more than four sites. Some storage facilities would likely be situated inland in contrast to the current tanks which are all in coastal east China.

As per report China has previously mulled the idea of setting aside proven deposits of resources as "strategic reserves", rather than pumping or mining them and then putting them into a stockpile.

China Railway to list at Shanghai

It is reported that China Railway Construction would list shares on the Shanghai stock exchange after raising USD 5.4 billion in Asia’s largest public offering this year.

As per report China Railway Construction, which built part of the controversial train line to Tibet, attracted CNY 21.73 billion from its share offering in Shanghai. The proceeds from the sale of 2.45 billion shares at CNY 9.08 per share will help purchase construction equipment, fund the building of railway lines and a property project, and pay down loans.

China Railway is also scheduled to debut in Hong Kong on March 13th 2008 after raising HKD 18.25 billion from the sale of 1.706 billion shares at HKD 10.7 per share.

China expects 60 million KW nuclear power in 2020

Xinhua reported that China's installed nuclear power capacity is expected to be 60 million kilowatts by 2020, as the construction of nuclear plants are progressing faster than planned.

Mr Zhang Guobao vice minister in charge of National Development and Reform Commission said according to China's nuclear power development plan, the total nuclear power operational capacity is to reach 40 million kilowatts by 2020, accounting for 4% of the country's power generating capacity. He said at the end of last year, the Chinese mainland had a total of 11 nuclear power generating units in operation with combined installed capacity of nearly 10 million kilowatts.

Mr Zhang said "It is necessary to increase the share of nuclear power and electricity based on renewal energy, while trying to reduce the dependence on coal for power generation. He said there has been growing demand for building nuclear power plants in China. Since all the nuclear power plants in China are located in the coastal provinces such as Zhejiang, Guangdong and Jiangsu, other provinces have also demanded nuclear plants in their areas.”

Ferrexpo to choose JV partner soon

Dow Jones reported that Ferrexpo PLC expects to choose a strategic partner to develop its two untapped mines by the middle of the year.

Mr Michael Oppenheimer CEO of Ferrexpo on the sidelines of the Adam Smith conference in London told Dow Jones Newswires that "It is rather an expectation than target.”

Mr Oppenheimer added that “The company is not financially pressed to rush into a partnership to develop its Yeristovskoye pit. The joint venture partner the company is eyeing would likely help develop existing assets, but will exclude the Gorishne Plavninskoye Lavrikovskoye deposit, the only one producing at the moment.”

Mr Oppenheimer declined to name a potential partner for the future JV, saying that the company is looking at a number of companies. However, he said, it will not be a Russian one.

Ferrexpo, which currently produces about 9 million tonnes of iron ore, of which approximately 85% is exported to steel makers around the world, expects to reach a production level of 32 million tonnes by 2011, which would demand capital expenditures of about USD 4 billion.

Ukrainian finished steel out put in 2 moths up by 4% YoY

Ukrainian Journal reported that Ukrainian steel industry’s finished roll output rose by 4% YoY in January to February 2008 to 6.105 million tonnes. Ukraine produced 7.13 million tonnes of crude steel up by 3% YoY and 5.92 million tonnes of pig iron up by 4% YoY.

But, steel pipe production fell 16% YoY to 371,000 tonnes.

Iron ore concentrate production grew 8% to 10.33 million tonnes, prepared iron ore was unchanged at 11.69 million tonnes and sinter was unchanged at 8.09 million tonnes.

Zavod pipe mill 25% plus 1 stake auction postponed again

Interfax reported that the Russian Federal Property Fund has again postponed an auction for 25% plus one share in Large Diameter Pipe Works OJSC Zavod TBD in Nizhny Tagil in Sverdlovsk region from March 13th 2008 to May 12th 2008.

Applications to bid will be accepted until May 4th 2008 and a deposit of RUB 47.087 million must be paid by May 5th 2008.

The Russian Federal Property Fund is offering 300,001 shares, par value RUB 1,000 each at a public closed bid auction. The starting price for the block of shares is RUB 235.433 million and the bidding increment is RUB 2 million.

Zavod TBD's share capital is RUB 1.2 billion consisting of common shares. Evraz Group's Nizhny Tagil Iron & Steel Works won an auction for Gazprom's 19.9% of the shares in Zavod TBD in November and Evraz also bought Duferco's 30.1% minus one share, back in 2005. NTMK also owns 25% plus one share in the company.

Russian steel exports in January 2008 up by 5.8% YoY

According to Russian official statistics, pig iron, ferroalloy and scrap export volume totaled 2.36 million tonnes in January 2008 up by 5.8% YoY as compared to 2007. Among them, pig iron export volume was 249,700 tonnes down by 38%YoY; ferroalloy was 51,800 tonnes up by 46% YoY.

At the same time, Russian scrap metal import volume down by 4.2% YoY to 320,700 tonnes and steel pipe import volume down by 17.9% YoY to 80,300 tonnes as compared to same time of 2007.

Ukraine agrees for new price for Russian gas – Report

According to Kommersant, Ukraine has agreed on a price of USD 321 per 1,000 cubic meters for Russian gas. As per report, this price may be applied for 25% of the 9.1 billion cubic meters delivered in January and February to Ukraine, implying an overall import gas price of USD 215 per 1,000 cubic meters.

This gas price increase to USD 215 per 1,000 cubic meters would be 19.7% higher than the current gas import price of USD 179.5 per 1,000 cubic meters.

Kommersant added that the new average price would be USD 240 per 1,000 cubic meters or 33.7% higher, implying that Ukraine would import 43% from Russia and only 57% from Central Asia

However, Ukrainian cabinet of ministers have denied that Ukraine is ready to pay USD 321 for a thousand cubic meters of Russian natural gas, consumed in January and February.

Mr Valentyn Zemlyanskiy spokesman of Naftohaz claimed to journalists he does not know about the agreement. He said “Official talks between Naftohaz and Gazprom, in the course of which agreements will be elaborated, will take place on March 12. No contracts can be regarded as official before this date.”

Severstal launches new scrap processing equipment

FIS reported that new scrap processing equipment costing EUR 2 million was put into operation at the drop hammer plant of CherMK, Severstal.

The new equipment has the capacity of 180,000 tonnes per annum and will enable the company to increase volumes of scrap processing and improve the quality of processed scrap, which is to produce a positive effect on electric steel production.

This is the second shearing press supplied under the contract concluded with the French company at the end of 2006.

Mechel confirms its share capital

Mechel announced that, in accordance with the Rules of the City Code on Takeovers and Mergers, it confirms the Company's share capital. This disclosure under Rule 2.10 of the City Code is made subsequent to the announcement made by Mechel dated March 3rd 2008.

The released said that Mechel hereby confirms, in accordance with Rule 2.10 of the City Code that as at the close of the business day on March 10th 2008 it has in issue in total 416,270,745 ordinary shares of RUB 10 each. The International Securities Identification Number for Mechel's ordinary shares is RU000A0DKXV5.

The ISIN for Mechel’s American Depositary Receipts and Global Depositary Receipts which are listed on the New York Stock Exchange and registered with the US Securities and Exchange Commission are US5838401033 and US5838402023 respectively.

Russian exports of nonferrous metals increases

According to the Federal Customs Service, the exports of non ferrous metals exports of nickel in January 2008 grew by 45.8%, aluminum by 2.0 times while exports of refined copper declined by 8.1%.

Exports of unrefined nickel totaled 22,700 tonnes of which 22,600 tonnes were exported to non CIS countries and only 1000 tonnes to CIS countries. Exports of primary aluminum totaled 327,800 tonnes, refined copper 22,700 tonnes.

Gazprom to buy Kazak, Uzbek and Turkmenistan gas in 2009 at European prices

Gazprom has announced that it hosted a working meeting of Mr Alexey Miller chairman of the Management Committee of Gazprom, Mr Uzakbai Karabalin president of KazMunaiGaz, Mr Nurmmukhamad Akhmedov chairman of the management committee of Uzbekneftegaz and Mr Yagshigeldy Kakaev chairman of Turkmengaz. The meeting addressed the outlook for cooperation in the gas sector.

The released added that during the meeting the heads of the gas companies from Kazakhstan, Uzbekistan and Turkmenistan stated that “Based upon the interests of the national economies and considering the international commitments with regard to the energy supply reliability and continuity, starting from 2009 natural gas will be sold at European prices.”

Gazprom Neft plans USD 11 billion CAPEX till 2010

RIA Novosti reported that Gazprom Neft has approved a mid term investment program until 2010 at USD 11 billion. Gazprom Neft capital investment will stand at RUB 88.9 billion up by 36% against last year's investment program.

Mr Alexander Dyukov board chairman of Gazprom said "The ambitious mid-term investment program is designed to enable Gazprom Neft to attain its basic strategic goals."

Gazprom Neft aims to increase oil output, which totaled 32.7 million tonnes last year to boost reserves by geological exploration and development of new fields, to enhance competitiveness, to switch petrochemicals to Euro-4 standards by 2011, and to substantially increase retail trade in oil products.

Major funds will be channeled into oil production projects, with investment in 2008-2010 fixed at RUB 176.5 billion. The company will invest RUB 29.7 billion in geological exploration projects and spend RUB 27.3 billion on oil refining by 2010.

Novokuybishev converts power units to natural gas

FIS reported that at the end of Feb