Mahindra Intertrade to set up electrical steel center at Vadodara

Express news service reported that Mahindra & Mahindra Ltd’s wholly owned subsidiary Mahindra Intertrade Limited plans to set a electrical steel processing plant in an area of 10 cares at Savli Industrial Estate of Vadodara in Gujarat at an estimated investment of INR 30 crores.

The service center would function as a one stop shop for processed electrical steel requirements aimed at catering to the power sector industry in Gujarat. It will manufacture laminations for transformer cores, providing a high tech processing back end for transformer OEMs located in Gujarat

Mr Bharat Doshi ED of Mahindra Group said the plant site was strategically chosen to ensure proximity of the facility to power transformer manufacturers, most of which are located in Central and Western India.

The company officials said the Indian transformer industry is all set to get a big push as the government has shifted focus from adding generation capacities to strengthening the distribution system. An official said "This will provide further growth opportunities for power and distribution transformer makers over the next five years in the country.”

Mahindra Intertrade had set up the country’s first steel service centre Mahindra Steel Service Centre, in 1993, near Pune together with its Japanese partners Mitsubishi Corporation and Nissho Iwai Corporation, now Metal One Corporation for home appliances and transformer industries. In February 2005, the company expanded this network to West Asia with a facility at Sharjah and set up a joint venture with Nippon Steel Corporation of Japan.

Indian iron ore spot prices in upward trends

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced that the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on March 10th 2008.

The change is with respect to prices posted on March 3rd 2008

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

Indian coal hugely under priced – CIL chairman

BS reported that Coal India Limited has voiced that the domestic coal prices are much below international levels.

Mr PS Bhattacharyya chairman of CIL said that Indian coal prices are hugely suppressed and it is impacting much more than CIL’s balance sheet. He said that "On an average, international coal prices, measured in rupees per million kilocalories, are 100% higher than Indian coal.

Mr Bhattacharya said that FOB coal at international ports is compared with free on rail coal at Indian mines. He, however, said that CIL would push the government for another price hike soon.

He said that "The whole focus of providing cheap power has to change. The pricing of coal has to be looked at from a far wider perspective. India has been a witness to periodic coal mine catastrophes claiming thousands of lives and impacting many more. In Jharia, nearly half a million people are sitting on earth that is blazing from within, fearing everyday that the ground beneath their feet will subside. Cross over to West Bengal, and you find unbridled illegal mining of coal that is giving rise to a parallel economy in places like Asansol and Raniganj."

CIL hiked prices by 10% to 15% in December 2007 after a gap of 3 years. Despite being deregulated in 1999, coal prices continue to be monitored by the government as they directly impact power tariffs.

Global Steel signs iron and coal mining leases - Report

Reuters reported that Global Steel Holdings, majority shareholder of Ispat Industries Limited, has signed mining lease agreements in Brazil, Mozambique and Colombia for iron ore and coal.

The report cited a Global Steel official as saying that "We have got the leases and exploration would take 12 months to 18 months."

He added that it would form special purpose vehicles in these 3 countries, in which Ispat may have a stake.

The lease in Brazil would be for iron ore mines, where reserves are estimated to be more than 0.5 billion tonnes. In Mozambique and Colombia, coal reserves are estimated at 70 million tonnes and about 60 million tonnes, respectively.

Vedanta announces aluminum smelter in WB

Vedanta Resources, the USD 6.5 billion diversified metals and mining group, signed a development agreement with the West Bengal government to set up a large aluminum complex at Bidhanbag in Asansol at an investment of INR 20,000 crore. Mr MV Rao MD of West Bengal Industrial Development Corporation and Mr Pramod Suri CEO of Vedanta signed the agreement.

The aluminum complex will have 650,000 tonne per annum smelter and a 3,000 MW power plant. In the first phase, the company plans to set up a 1,500 mw power unit, most of which is likely to be consumed for captive purposes. Close to 1,000 acres is needed for the project.

Mr Anil Agarwal chairman of Vedanta said that “We will bring alumina from Orissa to feed the plant. The state government has promised us good quality coal. Since energy costs comprise the bulk of the production cost in aluminum we decided to expand into West Bengal. The local people in Asansol have also shown tremendous interest in the project.”

In addition to the aluminum unit and power plant, Vedanta also has plans to develop a metal park in the region once the smelter and power plant become operational to ensure the development of the downstream industry.

Electrotherm India launches “Electro CRS Gold” rebars

Electrotherm India Limited has announced the launch of its corrosion resistant steel bars called “Electro CRS Gold” that would increase the life span of buildings with a little more investment at the time of construction. Electro CRS Gold is being positioned against market leaders such as TATA TISCON CRS and products of SAIL and RINL.

Mr Avinash Bhandari operations director of Electrotherm said that it expects to market 25% of its 120,000 tonne manufacturing capacity of thermo mechanically treated bars in the first year of the launch.

Mr Bhandari said that the current price of normal TMT bars is INR 43,000 per tonne, whereas the CRS bars would cost INR 47,000 per tonne. The CRS bars would be available in 8mm to 32mm in sizes in both Fe 500 and Fe 415 grades.

Electrotherm has invested nearly INR 514 crore so far in its fully integrated steel plant at Samkhyali in Kutch that came up in 280 acres. Its Kutch based plant has a total billet and TMT production capacity of 350,000 tonnes annually.

SPS Steel plans offloading 10% stake to private investors

It is reported that SPS Steel & Power is in talks with private equity firms to offload 10% stake to raise INR 250 crore, which is expected to be completed by April 2008.

As per report, it hope to raise INR 250 crore for funding expansion projects that have been undertaken by the company and in setting up a 250 MW coal based power plant in Dhenkanal district of Orissa. The total investments lined up at present are pegged at INR 2,500 crore to INR 3,000 crore.

Mr Bipin Vohra CMD of SPS Steel said that talks were underway with three prominent private equity investors and a firm decision on offloading 10% of the equity stake in SPS Steel & Power would be taken in the next fortnight.

He added that "We plan to launch the IPO, which may raise INR 500 to INR 600 crore in April 2009."

Mr Vohra added that for the next phase of investments, including expansion of cold rolling facilities, the company would come out with an initial public offering next year. The amount proposed to be raised through the IPO has been pegged at INR 500 crore to INR 600 crore.

SPS Steel & Power has already set up steel making capacities in West Bengal and Himachal Pradesh. The company’s expansion project at its steel plant in Jharsuguda, Orissa, is scheduled to be completed by December 2008.

UGSL to upgrade Khopoli service centre

BS reported that Uttam Galva Steel Limited is planning to upgrade its steel service centre in Khopoli near Mumbai to strengthened relationships with its domestic clients. It is also evaluating the possibility of entering new marketing relationships and tie ups for supply of its steel products by leveraging the service centre.

A senior manager of Uttam Galva pointed out that it has already invested in additional equipment and technical staff to upgrade its facilities of the service centre. Steel companies use the service centers to supply the tailor made steel products to their customer’s requirements on a just in time production basis.

UGSL’s existing customer base for its steel products include white goods makers such as Godrej Appliances, Bajaj Electricals and auto companies such as Mahindra and Mahindra. It buys 500,000 tonnes of hot rolled coils from integrated steel producers and then converts them to higher value steel products at its production facilities located at Raigad district.

1,000 hectares acquired for TATA Steel plant in Chhattisgarh

BS reported that Chhattisgarh government has acquired land from more than 1,000 people in the Lohandiguda block of Bastar district to facilitate TATA Steel build its Greenfield integrated steel plant in the district.

Mr Rajesh Munat state industry minister informed Vidhan Sabha that "Till February 23rd 2008, the state government has paid a compensation of INR 34.75 crore to 1,009 people against their land acquired for setting up a steel plant by TATA Steel."

Mr Munat said that the district administration is not acquiring land forcefully and people are coming out willingly to hand over their land for the project.

TATA Steel would require 2160.58 hectares in the Lohandiguda area of the district to set up its 5 million tonne per annum steel plant.

Indian Railways freight traffic in 11 months up by 9% YoY

Indian Railways has carried 714.25 million tonnes of revenue earning freight traffic during April 2007 to February 2008 period up by 8.99% YoY as against freight traffic of 655.35 million tonnes actually carried during April 2006 to February 2007.

During the month of February 2008, the revenue earning freight traffic carried by Indian Railways was 70.54 million tonnes up by 14.38% YoY as against freight traffic of 61.67 million tonnes actually carried during February 2007.

Monnet Ispat denies news item on Indonesia project

With reference to the news item appearing in a leading financial daily titled “Monnet in 1,000 MW Indonesia project”, Monnet Ispat Limited has clarified to BSE that it is only in discussion with the Indonesian Authorities for putting up coal fired power plant in that country on a pit head basis.

Further Monnet Ispat has clarified that nothing has been finalized so far and it is only at the stage of discussions.

Jai Balaji holders clear HEG, Nilachal moves

Jai Balaji Industries shareholders at a meeting held on March 12th 2008 formally approved the scheme of arrangement of transfer of the HEG steel unit with Jai Balaji Industries and also the acquisition of ownership of Nilachal Iron and Power.

The steel division of HEG consists of a sponge iron plant, a steel melting division and a power plant.

Nilachal Iron & Power Ltd, a manufacturer of sponge iron, has its own power plant, coke oven and a pellet plant, apart from rolling mills, facilities to make tubes and pipes and ferroalloys.

The HEG and Nilachal moves have given Jai Balaji a foothold in two mineral rich states of eastern India.

Varun Industries inks pact for sourcing iron ore for exports with Unique Services

It is reported that Mumbai based Varun Industries has entered into an agreement with Bangalore based Unique Services for exports of iron ore for a period of 1 year.

Unique Services is a partnership firm located at Bangalore and is in possession of mining rights for iron ore at Karnataka and have necessary expertise in mining activities.

Varun Industries is a company engaged in stainless steel manufacturing.

Global dredging majors may be roped in for proposed JV

BL reported that a reputed foreign dredging firm might be roped in for participation in the proposed dredging mega alliance, which now has 4 partners namely the port trusts of Mumbai and Jawaharlal Nehru, Cochin Shipyard and the Shipping Corporation of India.

Ernst & Young, the consultant appointed to prepare report on the proposed dredging JV, has already submitted its findings and will make a presentation before the union shipping ministry shortly. Once the ministry gives the clearance, the cabinet note will be prepared on the formation of the company.

The consultant is convinced of the viability of the proposed venture considering India’s dredging requirement which is steadily rising. While the accent will be on capital dredging, maintenance dredging too, will receive due attention. Right now, Dredging Corporation of India concentrates on maintenance dredging.

The extent of participation by each partner of the proposed alliance is still to be firmed up. This is presumably because much will depend on the participation of the foreign partner. The initial investment will be large since acquisition of dredgers will not come cheap.

BHEL and NTPC may set up a JV for heavy equipment

It is reported that the row between the Bharat Heavy Electricals Limited and National Thermal Power Corporation, over manufacturing of heavy main plant equipment, may finally be settled as they are discussing the possibility of a JV for manufacturing heavy equipment like boilers and turbines for all types of projects including the super critical thermal power plants.

As per report, both the companies have constituted two separate committees to discuss the issue. The proposed JV is expected to settle the conflict between BHEL and NTPC created by the initial proposal made by the latter to venture into this area.

A source in the ministry of power said that "This is an initiative taken by the two companies for addressing of the power generation issue. The companies have set up the committees on their own without much involvement of the nodal ministries on the issue."

Power ministry officials said that the proposed JV would ensure timely supply of equipment for NTPC, especially for projects planned for commissioning during the 12th Plan.

It may be noted that in September 2007, the two companies had signed a MoU to form a JV for engineering, procurement and construction projects only. Though the MoU on EPC projects between the two companies has a clause for expanding the venture for manufacturing main plant equipment, the two sides could not work it out. That is why they decided on a separate venture for main plan equipment manufacture.

NTPC had pushed for its equipment venture citing delay in supply of equipment for power projects by BHEL. The BHEL opposed this proposal citing that it would create a conflict of interest with a generator also producing equipment.

Steel price hike to help capacity building - RINL

Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited has justified the recent hike in steel prices, which according to him would lead to accumulation of surplus funds for investment in fresh steel projects.

Mr Bishnoi said that "We need to pay fair prices to steel producers and manufacturers in order to enable them generate investable surplus for taking up fresh expansion projects. With steel consumption on the rise, there is a requirement to augment the steel production capacity of India.

Otherwise it would lead to a demand supply mismatch." He added that steel consumption is linked to GDP growth and with the country's GDP poised to grow, the demand for the latter would also see a significant rise.

Referring to the proposed 4 million tonne steel plant to be built jointly by SAIL, RINL and NMDC in Chhattisgarh, Mr Bishnoi said that it is currently preparing the project report for the plant. He added that "After the project report is ready we will take it further ahead."

NTPC, NHPC, PFC and TCS to join for power exchange

PTI reported that, after it parted ways with NCDEX upon failing to reach consensus on certain key issues, National Thermal Power Corporation will sign an agreement with NHPC, PFC and TCS by end of March 2008 to set up India's third power exchange.

Mr T Sankaralingam CMD of NTPC said that an agreement for floating the power exchange would be signed before in March 2008. He added that "The exchange will be formed. An agreement will be signed between NTPC, NHPC, PFC and TCS."

NTPC had planned to partner NCDEX to float a power exchange, which proposed to rope in 7 promoters, including National Stock Exchange, Power Grid Corp and TATA Power. Sources said that NTPC and NCDEX could not reach an agreement on key issues, including management of the exchange.

The proposed venture also faced hiccups with the power sector regulator Central Electricity Regulatory Commission, barring Power Grid from participating in any power exchange. CERC had also asked NTPC to form a separate subsidiary for floating the power exchange.

However, Mr P H Ravikumar CEO & MD of NCDEX said that the commodity exchange is in talks with corporate to partner in the power exchange and exuded confidence that the proposed venture would materialize in the coming months.

High rebar prices squeeze working capital of small mills

FE quoted Mr Bipin Kumar Vohra CMD of SPS Steels group as saying that Indian steelmakers facing higher input prices may be forced to keep some capacity idle as their working capital is being squeezed.

Mr Vohra said that only those steelmakers with captive iron ore mines can think of generating an investible surplus, while those having to buy ore in the spot market are facing a pressure on margins.

Mr Vohra, who also heads the Sponge Iron Manufacturers Association, said that 80% of steelmakers have to buy their ore in the spot market, where prices have gone up from INR 4000 per tonne to INR 5600 over the past 3 months. Coupled with this, imported coking coal has shot from USD 200 a tonne to USD 600 a tonne and ferroalloys from INR 40,000 per tonne to INR 69,000 per tonne.

He said steel makers have almost doubled prices of products like TMT bars from INR 27,000 a tonne to INR 43,000 a tonne, with the steepest increase coming over the past fortnight. Manufacturers of construction steel have been the worst hit by the volatility in pig iron prices, which show hourly fluctuations almost like those in shares.

NTPC and Bharat Forge considering equipment JV - Report

BL reported that National Thermal Power Corporation Limited and Bharat Forge are looking at the possibility of scaling up their partnership for a full fledged foray into power equipment manufacturing.

NTPC and Bharat Forge had signed a MoU on February 8th 2008 to set up a 49:51 JV company for setting up an equipment manufacturing facility.

A senior government official involved in the exercise said that "The proposed venture is actively exploring opportunities related to power equipment manufacturing in a comprehensive manner, starting with balance of plant equipment and then going on to main plant packages and components, including possibly turbines."

NTPC’s backward integration plans come in the wake of an ongoing tussle between the power major and BHEL on the issue of equipment supplies for some of NTPC’s projects. NTPC and the union power ministry had passed on much of the blame for the slippage of the Tenth Plan capacity addition target on BHEL by citing delays in supply of equipment.

NTPC plans to triple its power generation capacity to 75,000 MW by 2017, while intensifying its focus on newly diversified areas including hydroelectric projects, coal mining and nuclear energy. It plans to add about 21,941 MW generation capacity during the 11th Plan period at an estimated expenditure of INR 160,000 crore.

GAIL to set up new subsidiary for gas supplies in cities

BS reported that GAIL India Limited will set up a wholly owned subsidiary to sell gas to households, vehicles and industries in cities across the country.

Mr UD Choubey chairman of GAIL said that it has already identified 17 cities to bid for gas distribution rights, for which the new company plans to spend around INR 500 crore. He added that "The new company will bid for all new city gas distribution projects that the petroleum and natural gas regulator plans to offer. The new company would have an equity capital of INR 200 crore and borrow another INR 300 crore for implementing its projects."

Mr Choubey said that GAIL will register the new company in next 2 to 3 months. He added that "Afterwards we will consider listing the company on the stock exchanges. The setting up of the subsidiary will also help in compliance with the requirement of unbundling of the marketing and transportation functions under the petroleum and natural gas regulations."

The new subsidiary will also take up a compressed natural gas corridor project for setting up CNG stations along highways. Initial capital of INR 35 crore has been earmarked for this project.

The new company will have a 5 member board with GAIL chairman doubling up as the chairman of the new subsidiary. A separate chief executive officer will be appointed.

GAIL already has JVs with other gas companies for distribution in various cities across the country. Its equity share in the existing JVs, such as Indraprastha Gas in Delhi and Mahanagar Gas in Mumbai, will not be transferred to the new company.

SCI plans tie up with ABG for mega shipyard - Report

ET reported that Shipping Corporation of India may soon forge a mega shipyard JV with leading shipbuilding company ABG Shipyard. The report quoted some sources close to the development as saying that South Korean shipping major STX, which was also initially interested in the project, had lately not been showing much interest, thus paving the way for SCI ABG venture.

However, Mr UC Grover director of SCI said that "We are not talking to anyone at this point of time for the proposed venture."

SCI has shown interest in building one of the two mega shipyards proposed by the government as part of the national maritime development program. The proposed shipyard is expected to cost around INR 3,000 crore each. Larsen and Toubro, Essar, Shapoorji Pallonji and Bharti Shipyard are some of the shipping majors that have submitted their expression of interest for building mega shipyards of global standard.

Detailed updates on TATA Steel financial results

TATA Steel Limited has announced the consolidated financial results for April to December 2007 period and October to December 2007 quarter.

October to December 2007 quarter

1) Turnover
Excluding turnover of TATA Steel UK of INR 23,867 crore for the quarter, turnover registered an increase of INR 2,157 crore. The increase was mainly due to increases in TATA Steel Indian operations with INR 472 crore, Natsteel with INR 1,135 crore and TATA Steel Thailand with INR 554 crore.

2) Total Expenditure
Total expenditure for October to December 2007 quarter amounted to INR 28,967 crore, including total expenditure of INR 22,808 crore of TATA Steel UK as against INR 4,325 crore during October to December 2006 quarter.

3) Material cost
The material cost excluding of TATA Steel UK of INR 11,253 crore increased from INR 1,919 crore in the previous year same period to INR 3,003 crore during the current year. While increase in volume of operations as well as increase in prices of scrap consumed by Natsteel resulted in an increase of INR 887 crore, TATA Steel Thailand contributed INR 226 crore to the increase on account of increase in volumes. Increase in Natsteel group is also due to increase in purchases of raw materials by TS Resources Australia for use by TATA Steel India.

4) Other Expenditure
The other expenditure excluding that of TATA Steel UK was INR 1,395 crore in October to December 2007 quarter as against INR 1,133 crore in October to December 2006 quarter. The increases were in TATA Steel Thailand, Natsteel and the Indian operations.

Major company wise breakup of the other expenditure is shown below

INR in crore

5) Interest
The interest net was INR 1,081 crore in October to December 2007 quarter as against INR 96 crore in October to December 2006 quarter. Other than interest charge of INR 606 crore of TATA Steel UK, remaining increase is mainly due to increase in borrowings, to fund acquisition cost of Corus, by various entities including TSAH and TATA Steel India.

6) Exceptional items
The employee separation compensation was INR 65 crore in October to December 2007 quarter as against INR 50 crore in October to December 2006 quarter. Due to rupee appreciation against major foreign currencies in October to December 2007 quarter, it had a net exchange gain of INR 45 crore.

The actuarial gain on funds for employee benefits amounted to INR 145 crore for October to December 2007 quarter. The gain represents reduction in pension liability arising out of higher discount rate, reflecting improved yields on bonds. The gains or losses for employee benefits is required to be accounted for, through the P&L Account under Indian GAAP while this is adjusted through reserves under IFRS.

April to December 2007 period

1) Turnover
Excluding turnover of TATA Steel UK, turnover registered an increase of INR 4,200 crore in April to December 2007 period. The increase was mainly due to increases in TATA Steel Indian operations with INR 1,339 crore, Natsteel with INR 2,372 crore and TATA Steel Thailand with INR 1,066 crore.

2) Total Expenditure
Total expenditure for April to December 2007 period amounted to INR 85,079 crore, including total expenditure of INR 68,576 crore of TATA Steel UK, as against INR 12,990 crore during April to December 2006 period.

3) Material cost
The material cost excluding of TATA Steel UK increased from INR 6,227 crore in April to December 2006 period to INR 8,062 crore during April to December 2007 period. While increase in volume of operations as well as increase in prices of scrap consumed by Natsteel resulted in an increase of INR 2,014 crore, TATA Steel Thailand contributed INR 663 crore to the increase on account of increase in volumes. Increase in Natsteel group is also due to increase in purchases of raw materials by TS Resources Australia for use by TATA Steel India.

4) Other Expenditure
The other expenditures excluding that of TATA Steel UK was INR 3,789 crore in April to December 2007 period as against INR 3,059 crore in April to December 2006 period.

Major company wise breakup of the other expenditure is shown below

5) Interest
The interest net was INR 3,358 crore in April to December 2007 period as against INR 224 crore in April to December 2006 period. Other than interest charge of INR 2,236 crore of TATA Steel UK, remaining increase is mainly due to increase in borrowings, to fund acquisition cost of Corus, by various entities including TSAH and TATA Steel India.

6) Exceptional items
The employee separation compensation was INR 177 crore in April to December 2007 period as against INR 113 crore in April to December 2006 period. A contribution of INR 150 crore towards development of sports infrastructure has been recognized as an exceptional expenditure during the current fiscal year.

The actuarial gain on funds for employee benefits amounted to INR 6,117 crore for April to December 2007 period. The gain is on account of recovery on bond yields used to discount scheme liabilities, and recovery in asset values of the scheme funds. The gains or losses for employee benefits is required to be accounted for, through the P&L Account under Indian GAAP while this is adjusted through reserves under IFRS.

TN may get INR 2,000 crore rail package – Mr Velu

Mr R Velu union minister of state for railways said that Tamil Nadu is likely to witness railway expansion projects worth INR 2,000 crore for the financial year 2008-09.

The proposed package includes new broad gauge lines, gauge conversion, garib rath services, 25 rail over bridges, 32 model railway stations and so on.

Cairn’s Rajasthan pipeline project to get approval soon

It is reported that Indian government is close to giving Cairn Energy the go ahead to build a pipeline from its Rajasthan oilfield to the coast helped it to surge by 8%.

Mr MS Srinivasan union oil secretary said a week ago that a decision on allowing Cairn to recover the GBP 400 million cost of laying its pipeline would come in the next fortnight.

Cairn Energy, which recently helped to soothe Indian sensitivities by floating its Cairn India arm, has offered to build the pipeline itself provided it can cover the costs with cuts to the Indian government’s share of future oil revenues. There was also revived talk of a bid for Cairn from ENI of Italy, which has just bought Burren Energy. New record highs for the oil price all helped Cairn to end up 223% at GBP 29.89.

Fitch assigns A (ind) and F1 (ind) ratings to ISMT

Moneycontrol.com reported that Fitch Rating Agency has assigned a long term issuer rating of 'A (ind)' to Indian Seamless Metal Tubes Limited. Simultaneously, Fitch has also assigned bank loan ratings as follow
1) Secured long term loans of INR 6000 million 'A (ind)'
2) Cash credit limits of INR 3050 million 'A (ind)'
3) Working capital demand loan of INR 3050 million 'F1 (ind)'
4) Non fund based limits of INR 4100 million 'F1 (ind)'

The release said that “The rating reflects ISMT's positioning in the seamless tube industry, the benefits of backward integration which has provided the company with significant control on the quality and cost of steel, and a favorable demand outlook for its products from the power, infrastructure and oil & gas sectors.”

Fitch expects the EBITDA margins to improve further post commissioning of its PQF mills at the Baramati plant in April 2008, which will not only reduce the cost of production for lower diameter tubes but also increase productivity. The ratings also reflect the consistent improvement in ISMT's financial leverage of the past two years.

The release added that “The above positives are, however, tempered by its improving but moderate leverage and a cost structure, which though benefits from ISMT's captive steel availability, is still higher than its peers primarily in respect to its cost of power and other overheads. Due to the difficulties in stabilizing its steel facility in the period 2001-2003, ISMT underwent a corporate debt restructuring program which started in 2003-2004. Post the stabilization of its steel facility, coupled with the buoyant demand for its pipe products, the company has repaid debt and is in the process of coming out of CDR by refinancing through lower cost debt. It is exploring the option of reducing its power cost through a captive facility, however, this is at a preliminary stage and the impact of this has not been factored into the rating. Fitch views this as an event driven risk and would take a view as and when these are finalized.”

ISMT manufactures seamless metal tubes and alloy steel. It presently has a steel capacity of 250,000 tonnes per annum and a tube capacity of 158,000 tonnes per annum. ISMT is in the midst of expanding its steel and tube making facilities at an aggregate cost of INR 3500 million and has recently acquired a 100% stake in a Swedish company Structo Hydraulics AB.

TN agrees to share 50% cost for elevated expressway

Projects Today reported that Tamil Nadu government has agreed to share 50% of the costs of land acquisition and rehabilitation & resettlement for the development of the INR 1,468 crore elevated expressway project.

The proposed expressway will be developed on the banks of River Coovum from Chennai port to Maduravoyal on build own and transfer basis. It will start from gate number 10 of the port near War Memorial, run along the banks of the River Coovum for the entire 17.5 kilometer to west end of the city.

The build, own and transfer operator will bring in 50% of the total project cost and the Tamil Nadu government along with Chennai Port Trust will equally share the INR 345 crore on land acquisition and R&R of people located along the Coovum River. National Highways Authority of India will raise the rest through viability cap funding.

The investment of the Tamil Nadu government is subject to condition that Chennai port will initially pay the entire cost of the land acquisition and R&R. Half the cost will be reimbursed by the state government, 50 per cent of which the government will get back from the Jawaharlal Nehru National Urban Renewal Mission.

ONGC invites EoIs for CBM blocks

Oil & Natural Gas Corporation has invited expressions of interest from consultants for the coal bed methane blocks.

The consultants will either have extend consultancies on either or both sub surface and engineering aspects through association with the already planned activities during execution process, suggest mid term alteration, if any and will provide sound techo economically viable development schemes for commercial exploitation of coal bed methane blocks.

Bhuwalka Steel allots 2 million warrants

Bhuwalka Steel Industries Limited has announced that its board of director at its meeting held on March 11th 2008 has allotted 2 million warrants to Genial Finance & Investment Private Limited and Purliou Investment & Finance Private Limited.

These warrant holders are entitled to apply for and obtain allotment of 1 equity share of INR 10 each at a premium of INR 100.20 per share determined as per the guidelines of preferential issue disclosed in Chapter XIII of SEBI Guidelines 2000, within a period of 18 months. 10% of the price fixed has been received in compliance with the said guidelines.

Global hot band spot prices in super volcanic eruption

SteelBenchmarker reported that the US hot rolled band spot price for March 10th 2008 surged by 6.2% to USD 834 per tonne, FOB the mill for the ninth consecutive rise totaling USD 257, world export HRB price rise by 6.4% to USD 816 per tonne FOB the port of export, for the seventh consecutive rise totaling USD 235, Chinese HRB ex works price rose by4% to USD 628 per tonne for the fifth consecutive rise and the Western European HRB surged by 6.5 % to USD 888 per tonne ex works for the third consecutive time.


USA
USD 834 per tonne FOB the mill
Up by USD 49 per tonne from USD 785 two weeks ago
Up by USD 274 per tonne from the recent low of USD 560 on August 13th 2007
Up by USD 204 per tonne from the recent high of USD 630 on April 9th 2007

China
USD 628 per tonne ex works
Up by USD 24 per tonne from USD 604 two weeks ago
Up by USD 158 per tonne from the recent low of USD 470 on October 22nd 2007
Up by USD 141 per tonne from the previous high of USD 487 on September 10th 2007

Western Europe
USD 888 per tonne ex works
Up by USD 54 per tonne from USD 834 two weeks ago
Up by USD 225 per tonne from the recent low of USD 663 on July 23rd 2007
Up by USD 192 per tonne from the recent high of USD 696 on June 11th 2007

World Export Price
USD 816 per tonne FOB the port of export
Up by USD 49 per tonne versus USD 767 two weeks ago
Up by USD 266 per tonne from the recent low of USD 550 on July 23rd 2007
Up by USD 220 per tonne from the recent high of USD 596 on March 26th 2007

Iron ore price negotiations – Rio threatens spot sales to enforce freight premium

As per media reports, Rio Tinto is threatening Asian steelmakers that it will sell iron ore on the lucrative spot market unless they agree to pay freight differential for supplies from Australia

Rio argues that its iron ore should fetch a higher price than alternative supplies from Brazil because it costs less to ship the metal from Rio's mines in Western Australia to Asian mills.

Mr Sam Walsh CEO of iron ore that the company will sit tight until it secured the right price. He said "Until some recognition of the natural premium of geographic proximity is possible and while the spot market continues to reward those without long term benchmark supply contracts with customers, then we will do what we can to secure an appropriate return for our shareholders."

As per report, Iron ore prices on the spot market, recently reached USD 216 per tonne and Rio Tinto is arguing that the spot price is currently USD 100 per tonne higher than a recent agreement struck by Vale.

Shipping costs are playing a big role in the pricing of commodities as bulk carriers are in short supply. The cost of shipping a tonne of ore from Brazil to China is about USD 67, roughly three times the cost of carriage from Western Australia.

If Rio is successful in its stand off, it could secure a record breaking price increase for 2008.

Rautaruukki to close sinter plant in Finland

Finnish steel maker Rautaruukki announced that it would close a sinter plant at Raahe in northern Finland by the end of 2011. The company will switch over to using only iron pellets as a raw material in the iron making process and has a long-term pellet supply contract with LKAB of Sweden. Closing the sinter plant will significantly reduce emissions at the Raahe Works.

The iron making process currently uses 1 million tonnes of iron pellets and 2.3 million tonnes of iron ore concentrate each year. The switchover to using iron pellets will make the sinter plant redundant. In the sinter plant, limestone and coke breeze are mixed with the iron ore concentrate and sintered into lump form or sinter for use in the blast furnaces as a raw material for iron making.

Mr Sakari Kallo vice president Hot rolled plate and strip products said that “Switching over to iron pellets will enable us to significantly reduce emissions at the Raahe Works. Carbon dioxide emissions will decrease by 10% or 500,000 tonnes a year, dust emissions will be cut by 37% and sulphur emissions by 64%. Energy consumption at the Raahe Works will fall by 8% or 1.16 million megawatt hours a year. This is equivalent to the annual energy consumption of around 60,000 small family houses.”

The sinter plant has been in operation at the Raahe Works since 1964.

CSN sees 2008 steel sales at 5.5 million tonne

BNamericas reported that Brazilian steelmaker Companhia Siderúrgica Nacional expects consolidated steel sales of 5.4 million tonnes to 5.5 million tonnes in 2008.

Mr Luis Fernando Martinez commercial director of CSN during a conference call said that by comparison overall shipments reached 5.4 million tonnes in 2007.

CSN has crude steel capacity of 5.6 million tonnes per year at its mill in Rio de Janeiro state's Volta Redonda city.

Base metal price increases on LME last week

Due to the strike and traders’ manipulation of iron ore market, the three month price of nickel has increased to USD 33,350 per tonne last week.

On the other hand, the three month price of copper decreased slightly by 0.4% to USD 8,545 per tonne; the three month price of aluminum soared by 2.9% to USD 3,227 per tonne due to power shortage in South Africa. Besides, the three month price of zinc dropped sharply by 6.4% to USD 2,650 per tonne.

(Sourced from YIEH.com)

Kloeckner Metalsnab to double sales over next 12 months

German metals distributor Kloeckner & Co’s Bulgarian subsidiary Kloeckner Metalsnab said that it plans to double sales to 140,000 tonnes over the next 12 months.

Mr Ivan Kashukeev chief executive director of Kloeckner Metalsnab told SeeNews that “In 2007 we had a turnover of some EUR 50 million and we should double it after we double the volume of sales.”

He added that the company will invest in upgrading and expanding its existing capacity in Bulgaria. He said that the comprehensive investment program of the company will be announced by the end of March 2008, giving no concrete figures.

The report further added that Kloeckner Metalsnab also plans to build up its metal inventories, expand the range of steel and non ferrous offerings and offer one stop shop to local customers.

Kloeckner Metalsnab is the renamed Metalsnab Holding, where the Kloeckner & Co’s bought a 70% stake in 2007 for an undisclosed sum, raising its stake to 77.3%. Kloeckner Metalsnab operates eight storage and office complexes in Sofia, Plovdiv, Varna, Burgas, Ruse, Svishtov and Pernik. It holds all relevant trade certificates and licenses for the home market and abroad. It trades in ferrous and non ferrous metals, metal products, raw materials and metal scrap in Bulgaria,

Rio Tinto workers in helicopter crash in Peru

Dow Jones reported that some of its employees of Rio Tinto’s were among the eight passengers aboard a helicopter that crashed while flying from one of its mines in northern Peru.

In a statement released, Rio Tinto said the Bell 412B helicopter left the La Granja copper mine for the northern Pacific port of Chiclayo around 10 AM local time Tuesday. There were two pilots and eight passengers on board.

Searchers spotted the wreckage of a helicopter but police said rescue crews faced a tough search in the inhospitable Andes mountains for the 10 people on board.

Rio Tinto told Dow Jones Newswires that it is still verifying the nationalities of the passengers and that it was not clear how many were employees or contracted workers. A Rio Tinto spokeswoman in Australia said that the miner was informed by transportation company Helinka Evergreen that the helicopter was missing.

Rio Tinto started exploration drilling in 2006 at La Granja, but has until 2009 to complete a feasibility study. The company took control of the project in January after previous owners BHP Billiton withdrew.

Peru is the world's second largest copper producer, after Chile.

CNS’ 2 slab plants plan delay at least by 1 year

It is reported that Brazil’s third largest steel maker CSN said that its 2 steel slab plants are forced to postpone building for at least 1 year, because the state government has not approved the proposal due to legal, tax, environmental protection issue, etc.

According to CNS previous plan, they shall complete one plant in Rio de Janeiro by 2009 year and the other plant in Minas Gerais state by August 2010. Both plants are designed with capacity up to 4.5 million tons per year.

Due to the delay permission, CSN said they shall complete both plants in next 5 years. For new plants, some slabs will be used as rail and heavy plate, which is of shortage in Brazil.

Corus sees higher wire rod prices on cost pressures

Corus said that higher coal prices will push wire rod prices substantially higher for deliveries from April 28th 2008.

Corus in a statement said that coal supplies are extremely tight on international markets and stocks at many steel makers are being depleted to dangerously low levels. It added that floods and port congestion in Australia have made the situation worse and some steelmakers have already started to cut back production due to inadequate supplies.

Corus which has already raised wire rod prices by GBP 70 to GBP 90 per tonne on deliveries from March 31st 2008 said that it is unable to specify the level of further price increases due to the uncertainty in coal prices.

Caterpillar sees USD 60 billion sales by 2010

Bloomberg reported that Caterpillar Inc, the world's largest maker of bulldozers and excavators, has raised its sales forecast for 2010 by 20% to USD 60 billion exceeding analysts' estimates.

The sales forecast was boosted from USD 50 billion and represents a 33% jump from 2007. Caterpillar, which released the outlook at a meeting in Las Vegas, kept its profit prediction of USD 8 to USD 10 a share in the next two years. The average of five analyst estimates compiled by Bloomberg was for 2010 earnings of USD 7.67 a share on revenue of USD 52.9 billion.

Caterpillar said it will benefit from machinery sales in emerging markets and efforts to improve public works in North America and Europe. Caterpillar has almost doubled sales since 2003 on demand from markets such as China, Russia and South Africa. The Peoria, Illinois-based company plans to spend USD 2.3 billion to add capacity and has trimmed costs to boost profit.

Mr Jim Owens CEO of Caterpillar told analysts and investors at the meeting that “We have got crumbling bridges and roads here in North America and we're going to have to spend significantly to fix that. The same is true of Western Europe. The emerging markets are building from the ground up.''

Scrap imports jump in Taiwan

According to the related statistics, Taiwan imported steel scrap about 5.418 million tons in 2007, increasing by about 1 million tons compared to the same period of last year.

Meanwhile, the top three main export countries to Taiwan were America, Hong Kong and Japan. The imports from America, Hong Kong and Japan were 2.092 million tonnes, 699,000 tonnes and 498,000 tonnes respectively.

(Sourced from YIEH.com)

SDI raises earnings guidance for Q1 of 2008

Steel Dynamics Inc raised its Q1 earnings guidance from a range of USD 1.10 to USD 1.20 per diluted share to a range of USD 1.25 to USD 1.30. This increase in earnings guidance is primarily driven by higher than anticipated flat rolled steel pricing and improved scrap processing results.

Mr Keith E Busse chairman & CEO of Steel Dynamics said that "Although the cost of ferrous resources used in our steelmaking facilities has increased during the quarter, our margins have expanded as pricing for flat rolled products has outpaced the increase in raw material costs. We are experiencing an extremely strong market for flat-rolled products as supply driven demand continues to propel strong order entry. In addition, our ferrous resource operations are experiencing increased profitability as the price and demand for these materials escalates."

Mr Busse said that "In spite of the downturn in the broader US economy, our outlook for Steel Dynamics during 2008 continues to remain one of optimism and growth as we remain focused on quality, product diversity and cost containment.” He added that "Based on our current outlook, we believe that our 2008 annual earnings could now be in the range of USD 5.25 to USD 5.75 per diluted share, an increase of USD.25 on both the lower and upper ends of the range last communicated on December 11th 2007."

PT Adaro plans up to USD 500 million IPO

Reuters reported that Indonesia's second largest coal producer, PT Adaro Indonesia plans to raise between USD 400 to USD 500 million via an initial public offering in around September 2008.

UBS had been appointed as the lead underwriter for the offering.

Mr Sandiaga Uno who runs Indonesian investment fund Saratoga Capital, which controls 32% of Adaro told Reuters that the Adaro planned to use the proceed to finance expansion and repay debt. He said that "It will be in the fourth quarter around September. We are aiming at between USD 400 to USD 500 million from it.”

Mr Uno said the company had not decided how much of the funds would be used to repay debt or on expansion. The number of shares to be offered also had not been decided.

Recent industry data shows that Adaro is expected to produce 42 million tonnes of coal in 2008 up from an estimated 40 million in 2007.

Nucor may boost steel exports in 2008

Herald News Services reported that Nucor Corp one of the largest US based steel maker by market value may significantly boost exports in 2008 as overseas demand gains and a weakening dollar increases the attractiveness of US shipments.

Mr Dan DiMicco CEO of Nucor said that it expects exports to top last year's record 1.8 million tonnes because of higher demand from Europe and the Middle East. The higher overseas shipments may increase earnings because the company receives more per tonne of steel sold outside the country.

Mr DiMicco added that "The opportunities for exporting are infinitely greater than they were a year or two years ago.”

Siemens plans new coal plant consortium

UPI reported that Germany's Siemens will lead a consortium comprising Austria's Energy & Environment and Japan's IHI to build a new coal plant at Mainz in Germany. The coal fired combined heat and power plant in Mainz is expected to cost about USD 2 billion and has a contracted completion date of 2013.

The hard coal fired plant is expected to have a capacity of more than 800 MW and will be built at the existing KMW power plant site in Mainz. Siemens was contracted to cover planning, supply, erection and commissioning of the main components for this power plant and holds about half of the consortium value.

Mr Michael Suess CEO of Siemens Energy Division Fossil Power Generation said that "Thanks to the advanced technology the power plant will attain a very high efficiency of 46 percent and will be one of Europe's most modern plants. The plant will also produce about 200 MW of district heat for as many as 40,000 households and approximately 30 MW of process steam for industrial plants in Mainz. He added that "We will thus achieve an optimum fuel efficiency of 60%”

Mr Suess said that “The power plant licensing phase is already under way and construction is scheduled to commence late-2008 or early 2009.”

Mr Olaf Thun project manager at KMW said that "The site is this particularly suitable for the erection of a CHP plant. It will make a key contribution toward reliable and cost-effective power supply in the Mainz Wiesbaden region.”

Alcoa appoints Mr Wisnoski as new president for primary aluminum growth

US aluminum producer Alcoa announced that effective immediately Mr Kenneth Wisnoski has been named president, global primary products growth, energy, bauxite and Africa. He will replace Mr Jon Erik Reinhardsen, who resigned from Alcoa to become CEO of Petroleum Geo Services ASA in Norway.

Mr Wisnoski had been vice president of this business unit, which is involved in smelting, bauxite and energy growth opportunities and projects worldwide. Prior to joining Alcoa in 2005 he was president, Europe and Africa, for El Paso Corporation, one of North America’s largest independent natural gas producers.

KGHM expects lower 2008 profit on weaker dollar and flat price

Thomson Financial reported that Polish copper miner KGHM confirmed has that it expects 2008 profit to fall compared to last year as the dollar weakens on average from last year and copper prices remain roughly flat.

A KGHM official said that last month he expected profits to be around PLZ 3 billion as compared to the PLZ 3.8 billion the company reported in 2007.

In an annual report today, KGHM said it expected copper prices to average USD 7,100 per tonne in 2008 as compared to USD 7,126 in 2007.

ESKOM facing coal transportation troubles

It is reported that South Africa ESKOM is struggling with trucking that is needed to get 45 million tonnes of extra coal to Mpumalanga where the power stations are allocated.

Eskom said that said that it would take close to 900 trucks to travel the crumbling and heavy used roads to Mpumalanga.

Mr Andrew Etzinger a spokesman of Eskom said that the Mpumalanga roads and the coal delivery is amongst its biggest worries and that ESKOM would need a total of ZAR 3 billion in the coming three to five years to upgrade the coal haulage network, thus far the utility has pledged ZAR 550 million.

Rio Tinto Alcan confirmed as 3rd major pillar of Rio Tinto Group

Rio Tinto announced that Rio Tinto Alcan is confirmed as third major pillar of Rio Tinto Group. Rio Tinto completed the acquisition of Alcan on October 23rd 2007 and the new product group, comprising the combination of Alcan and the original Rio Tinto Aluminum businesses, was named Rio Tinto Alcan.

1. Pro forma 2007 underlying EBITDA of USD 4,813 million for Primary Metal and Bauxite & Alumina, making Rio Tinto Alcan the third major pillar of Group EBITDA along with iron ore and copper.
2. Pro forma 2007 underlying earnings for Primary Metal and Bauxite & Alumina of USD 2,092 million, representing 23% of Rio Tinto's pro forma underlying earnings before corporate items and interest.
3. Pro forma capital expenditure for Primary Metal and Bauxite & Alumina of USD 2,296 million in 2007, reflecting continuing investment in value adding growth projects.
4. Pro forma share of production of 4.2 million tonnes of aluminum, 8.5 million tonnes of alumina and 32.0 million tonnes of bauxite in 2007.
5. Significant earnings momentum anticipated in 2008 with each 10 c/lb movement in the average annual aluminum price from the 2007 level of 120c/lb expected to change Rio Tinto Alcan's underlying earnings by USD 620 million. 2008 underlying earnings are also expected to be affected by exchange rate movements with a 10 US cent movement in the Canadian dollar rate expected to impact full year underlying earnings by USD 150 million. Rising energy, pitch, coke, oil and freight costs are also expected to partly offset any gain from higher LME prices.
6. Bauxite reserves totaling 1,387 million tonnes of recoverable mineral at the end of 2007 compared with 1,193 million tonnes at the end of 2006. The 2007 numbers incorporate the Rio Tinto assets and Alcan assets combined under the Rio Tinto Alcan name for the first time. Detailed bauxite reserves and resources data have been included within this release on pages 5 and 6.

Mr Tom Albanese CEO of Rio Tinto said that "These pro forma numbers reinforce the significance of the Alcan acquisition, which has transformed our aluminum group into an industry leader and the third major business within Rio Tinto. The strong fundamentals of the aluminum industry and the excellent long term demand outlook augur well for Rio Tinto Alcan's future financial performance. In addition to these earnings, we look forward to the synergies from the acquisition. Our internal target is USD 1.1 billion, exceeding the USD 940 million after tax synergies announced in November 2007."

Mr Dick Evans CEO of Rio Tinto Alcan said that "The combination of the Rio Tinto and Alcan assets has created a world leader in bauxite and aluminum production with a clear pathway to becoming the largest alumina producer. Our modern, low cost smelting assets benefit from a competitive hydro power position which is becoming ever more valuable in today's energy constrained world. This is a business which we intend to grow and from which we are ideally positioned to deliver value in the future.”

Another worker dies at Hanjin shipyard

GMANews.TV reported that barely 10 hours after the last work related tragedy there, another Filipino worker died Tuesday morning after falling from the roof of a building of the South Korean operated Hanjin Heavy Industries Corporation in Zambales province.

Local authorities identified the fatality as Mr Angelito Banaag a 38 year old resident of Santa Rosa town in Laguna province. He is a construction worker at the HHIC's subcontractor Trigon Steel Marketing.

Reports said the victim was on top of HHIC's Scrap and Waste Material building at Subic Bay in Olongapo City and was fixing its roof when he fell at about 8:30 AM.

Initial investigation showed that Mr Banaag was not wearing a safety line while he was performing his job.

Rio and Curtin University to establish mining research facility

Rio Tinto has established a five year, USD 10.5 million partnership deal with Curtin University for a research and development centre dedicated to open pit and underground mining. The announcement came after Mr Sam Walsh CEO of Rio Tinto Iron told the AJM Global Iron Ore and Steel conference.

The Materials and Sensing Centre will be Rio’s second collaboration with a university, after establishing the USD 21 million Rio Tinto Centre for Mine Automation at Sydney University’s Australian Centre for Field Robotics last year.

Mr Walsh said the new facility would complement the Sydney project. He said that “Its main work will be in development testing and deployment of technologies with specific application to Rio Tinto’s operations.”

Mr Walsh said that as its name suggests, the centre will focus on the use of new materials and sensors in mining. The new centre will provide direct links with research groups in the former Soviet Union, Eastern Europe, South America and China.

South Australia government urged to support Port Bonython plan

It is reported that an alliance formed to fast track Port Bonython for iron ore exports is an urgent issue that will need South Australian Government help.

Mr Bob Duffin chairman of Port Bonython said up to 1,000 jobs are at stake if a suitable port cannot be found soon and Port Bonython offers the best option. He said "It's important to understand we're not looking for any financial support from the State Government."

He added that "What we are looking for from the Government is a willingness to make the land available and to push for this development without waiting for a decision from the owners of the Olympic Dam project, because that could well be six or seven years into the future."

One of the companies involved in the new Port Bonython alliance says a deal it has signed for a port near Port Lincoln should significantly increase the prospects of one of its proposed mines.

NYMEX to change margins for coal futures contracts

The New York Mercantile Exchange Inc announced that it will change margins for its coal futures contracts, beginning at the close of business tomorrow.

As per release Margins for the Central Appalachian coal futures contract will increase to USD 8,000 from USD 7,000 for clearing members, to USD 8,800 from USD 7,700 for members and to USD 10,800 from USD 9,450 for customers.

Margins for the Western Rail Powder Basin coal swap futures contract will increase to USD 2,500 from USD 1,500 for clearing members to USD 2,750 from USD 1,650 for members and to USD 3,375 from USD 2,025 for customers.

Margins for the Eastern Rail CSX coal swap futures contract will increase to USD 5,000 from USD 4,000 for clearing members, to USD 5,500 from USD 4,400 for members and to USD 6,750 from USD 5,400 for customers

Labrador announces appointments of new senior management

Labrador Iron Mines Holdings Limited announced the following senior management appointments for its Direct Shipping Ore Project, located in the Province of Newfoundland and Labrador near Schefferville in Quebec.

1. Mr Marc Duclos as vice president, transport services
2. Ms Linda Wrong as vice president environmental and permitting affairs
3. Mr John Rogers as controller
4. Mr Erick Chavez as senior geologist

Labrador Iron Mines Holdings limited is a resource development company that obtained a listing on the TSX following a successful IPO in December 2007 in which it raised over USD 52 million. The Company was established to explore and develop direct shipping iron ore deposits on properties in which it holds interests located in the Labrador Trough, in the province of Newfoundland and Labrador near Schefferville in Québec.

Cleveland announces 2 for 1 common stock split

Cleveland Cliffs Inc announced that its board of directors has declared a two for one stock split of the Company's common shares.

Each shareholder of record as of the close of business on May 1st 2008, will receive one additional share of Cleveland Cliffs' common stock for every share held. The new shares will be distributed on May 15th 2008.

Mr Joseph A Carrabba chairman, president & CEO of Cliffs said that "Our board believes it is in the best interest of all shareholders to maintain a price that makes Cliffs' shares available to the widest audience of investors, enhances liquidity and reduces share-price volatility.”

Pursuant to the effectuation of the stock split, the par value of Cliffs' common stock will be adjusted from USD 0.25 per share to USD 0.125 per share. The number of authorized common shares also will be increased accordingly from 112 million to 224 million shares.

ABB to supply Mill Drive systems for copper mine in Brazil

It is reported that ABB won an order from Vale to deliver gearless mill drive systems that will maximize productivity and energy efficiency at a new copper mine in northern Brazil.

The Salobo mine is located at the Tapirapé Aquiri National Forest in the state of Pará in Brazil and operated by a wholly owned subsidiary of Vale. When commissioned in early 2010, the mine will have an estimated capacity of 100,000 tonnes of copper per year.

ABB’s delivery for the new mine includes two complete 17 MW gearless mill drive systems for two 26’ ball mills, as well as transformers, spare parts, project engineering, installation, training and other related support services. ABB’s gearless mill drives are more reliable and energy efficient than traditional mill drive systems and increase mill productivity.

Mr Veli Matti Reinikkala head of ABB’s Process Automation division said that “This project underscores our continued leadership in providing advanced solutions for our mining customers. As the need to optimize energy use and overall performance continues to be a priority, innovative technologies like ABB’s gearless mill drives, combined with our industry know-how and engineering resources, help new installations like the Salobo mine start operating successfully from day one.”

ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs more than 112,000 people.

Officials reject proposed coal terminal in western Kentucky

AP reported that officials in western Kentucky have rejected a proposed USD 200 million coal transfer operation and an ethanol plant.

As per report the McCracken County Fiscal Court refused to approve a zoning change Monday to allow the facilities. Ashley 4 Rivers LLC had asked officials to rezone 265 acres along the Ohio River from rural residential to heavy industry.

Supporters said the plants would have created hundreds of construction jobs and about 80 full time jobs. But the project came under fire from area residents, who complained about possible noise and coal dust.

Fennovoima buy land for nuclear plant in Finland

Reuters reported that Outokumpu Oyj and EON AG’s JV, Fennovoima, have decided to buy over 200 hectares of land at Simor in Northern Finland for a potential nuclear plant site.

As per report the JV aims to build a 1,500 to 2,500 MW nuclear plant in Finland. The plant is expected to be completed in 2018. Further details were not disclosed.

Dubai scraps import duty on steel and cement

Dubai ruler has issued a decree to exempt cement and steel from customs fees until further notice and to allow contractors and real estate developers to import these two materials with no restrictions. He has instructed the Dubai Customs Authority to implement the decision with immediate effect.

A Dubai Customs statement said that “The order from Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Dubai Ruler, aims to control the raising prices of construction supplies.’

As per this move, contractors and property owners will be allowed to import these two items without any restriction in order to allow them overcome the soaring prices in this respect.

The government last intervened in 2004 when cement prices doubled within a few weeks, due to soaring global demand, prompting contractors to directly source cement from new markets.

Dubai is a member of the United Arab Emirates federation, which has agreed with its Gulf Arab partners to create a customs union, fixing duties at a minimum 5%.

OYAK plans to invest overseas for the first time

Bloomberg reported that Turkey's USD 25 billion army pension fund Ordu Yardimlasma Kurumu is preparing to invest outside of the country for the first time, with USD 3 billion to spend on purchases in Europe in 2008.

Mr Coskun Ulusoy CEO of OYAK in an interview said that OYAK may use some of the money for infrastructure investments such as roads and bridges. He is also interested in mines that may provide raw materials for Oyak's steelmaking venture.

Turkey's biggest pension fund oversees the savings of about 240,000 serving and retired officers. Until now most of the money has been invested in local companies. OYAK controls Eregli Demir & Celik Fabrikalari TAS, Turkey's biggest steelmaker and part owns a joint venture with French automaker Renault SA.

Dubai construction industry hails customs duty waiver

The construction industry in Dubai has hailed the move to eliminate import duties on cement and steel as a step to help Dubai's fast growing construction sector, if not solve the problem totally.

Dr Ahmad Saif Belhasa, chairman of the UAE Contractors' Association and chairman of Belhasa Group, told Gulf News that "This will help Dubai's construction sector, especially in stabilizing the price of building materials. This is a good move. Dr Belhasa added that "However, the rest of the country's construction sector will further benefit if this facility could be extended to the entire country. We would like the government to reduce the port handling fees as well. This will help importers more."

Mr Rizwan Sajan chairman of Danube Building Materials said that "Prices of steel and cement, the essential components in the construction sector, have skyrocketed in the last few months. This decree will help the market to stabilize."

Mfr JR Gangaramani chairman of Al Fara'a Construction Group said that "The decree comes just in time and will help the prices to stabilize. We have been facing major problems with suppliers who have been increasing prices almost every week. The latest decision will save us from these problems."

The government's intervention comes at a time when contractors are trying to cope with a 50% jump in steel price as well as a similar rise in cement prices. More than 160 major construction projects are expected to be delayed due to the shortage in building materials and skills.

Update on Boulder Steel seamless tube finishing plant in UAE

Following a meeting of its board of directors, Boulder Steel Limited announced that significant progress has been made towards the development of the UAE based finishing plant project.

UK based engineering firm McLellan has updated the feasibility study for the UAE project and reported a good rate of return for projects in the steel industry.

Boulder Steel Limited has received quotations for most of the major equipment components to be installed in the finishing plant through engineering management services of Italy. Leveling of the land in Sharjah, where the plant is to be installed, will commence before the end of March 2008 and the work will be carried out under the supervision of Sharjah based consultants, QHC Architects & Engineers.

Progress has also been made with the potential financiers of the project, who are satisfied with the project documentation received to date. Work on the environmental impact assessment and risk assessment study for the project will commence before the end of March 2008 and the provisional environmental clearance for the project is expected by April 2008.

Steel price surge hits construction sector in Turkey

Turkish Daily News quoted Mr Tahir Tellioğlu chairman of Construction Contractors Committee of Turkey as saying that the increasing steel prices are hindering the development of the construction sector. Mr Tellioğlu said that "We should clear this obstacle in coordination with the state, iron steel producers and contractors, thus facilitating the further development of the economy."

He said that “Prices of the steel product prices have increased by 50% in February 2008. This bogged down the construction sector, which had already been suffering as a result of the global recession and the delay in the expected mortgage international investment funds.”

He added that "The price increase in the iron steel products stems from the fact that China's economy has begun to grow too much lately and these products in Turkey are exported to China. This negatively affects the course of the construction sector. Some precautions need to be taken immediately. Otherwise, we will ask about 30,000 contractors registered at our Committee, and all other colleagues registered or not, to go on strike at all the non urgent construction sites until the iron steel prices return to normal."

He pointed out the importance of the stability in the sector, which contributed to the development of the Turkish economy by 20% annually from 2003 to 2007.

RPG Cables bags USD 25 million supply order form Afghanistan

RPG Cables has bagged order worth USD 25 million for supply of medium voltage and low voltage cables of various sizes to Kabul Distribution Enhancement Project in Afghanistan.

RPG Cables is a leading manufacturer of jelly filled telecom cable and optical fiber cables in India. Recently it has a strategic alliance with Corning Cable Systems for offering structured cabling solutions in India, Sri Lanka, and Nepal.

AP signs MoU with RAK for integrated industrial corridor

It is reported that government of Andhra Pradesh has signed a MoU with Ras Al Khaimah Investment Authority and Matrix Enport for an integrated industrial corridor.

The project, to be spread over 10,000 acres of land, between Nizampatnam in Guntur district and Vodarevu in Prakasam district, will entail an investment of around INR 16,800 crore.

The proposed corridor will be developed jointly by RAS Investment Authority and Hyderabad based Matrix Enport Private in the ratio of 51:49 respectively.

The project to be implemented in phases and will be completed within a period of 6 years.

Pakistan urges Iran to close IPI deal by April

The Dawn reported that Pakistan government has asked Iran to close the gas pipeline project, with or without India, by April 2008 to help meet Pakistan’s increasing gas requirements.

Sources in Pakistani ministry of petroleum & natural resources said that Iran would hold final talks with India in March 2008 to persuade it to join the USD 5.4 billion IPI gas pipeline project. They added that if India continued to dither under US pressure, Iran would invite China to join the project.

A Pakistani government official said that "We have initialed the gas purchase agreement. An inter governmental framework agreement has also been firmed up to prepare a working group for finalizing the draft pact for the project." He added that Pakistan Economic Coordination Committee and Iran had approved the agreements but India had not taken a final decision.

Originally, Pakistan was to get 2.1 billion cubic feet per day of gas from the 2,600 kilometer long pipeline and India was to receive 3.2 billion cubic feet per day. The pipeline’s length will reduce to about 1,600 kilometer if India does not join the project. Pakistan had earlier asked Iran to enhance gas volume for Islamabad by 50% under the project in case India stayed away from the deal.

The price of Iranian gas delivered in Pakistan would be around USD 8 per million British thermal units at the current crude oil price of about USD 100 per barrel under the Japanese Crude Cocktail based pricing mechanism. The current gas price in Pakistan is less than USD 2.6 per million British thermal units, which means that the imported gas will be about 200% costlier than domestic gas. Pakistan government, however, estimates that it will still be 40% cheaper than furnace oil.

India has not officially indicated that it will stay way from the project but it has not come up with any commitment to finalize the deal over the past 9 months.

TCMC granted two coal zones in Thar

Daily Times reported that Thar Coal Mining Private Limited has been allotted zone 1B and 3B in Thar for coal based power generating projects and also Mr Muhammad Aslam Sanjrani has been appointed its MD for the next 2 years.

Pakistan Federal government and Sindh government have jointly established Thar Coal Mining Company to develop coal as strategic national asset under the energy security action plan to minimize the impact of expensive energy on national economy.

Thar Coal Mining Limited aims to encourage independent power producers to commission power plants on Thar coal. According to the sources, Thar Coal Mining Private Limited will produce and market the planned quantity of coal and its products efficiently and economically keeping in view safety, conservation and quality. It will operate as per market requirements maintaining at the same time financial viability to meet resource needs. Besides, it will acquire and develop available cost-efficient clean coal technologies to harness Thar coal for other uses like liquefaction, co generation and extraction of high unit value chemicals.

Federal power & natural resources ministry and Sindh government would be partners of the proposed company which would be formally approved by national economic council’s executive committee soon.

Dewan Petroleum announces significant gas discovery

Unique Pakistan reported that Dewan Petroleum Private Limited has drilled well at Salsabil structure up to the depth of 3305 meters and made first Jurassic discovery in Chiltan Limestone and in the Cretaceous Sembar Sands.

The Safed Koh Block is situated in the tribal areas of district Dera Ghazi Khan of Punjab province and located west of Sulaiman foredeep in the Middle Indus Basin of Pakistan. The gas bearing Salsabil structure in Chiltan has estimated closed area of 23 square kilometer and vertical closure of over 500 meters.

The well flow rate in Chiltan was recorded as 16 million cubic feet a day gas and 110 billion barrels per day of condensate at 40 to 64 choke with the wellhead pressure of 2120PSI. The gas has a calorific value of 870 British thermal unit. The perforation intervals are from 3284 meters up to 3124 meters. The cretaceous Sembar sand flow rate was 1 million cubic feet a day with calorific value of 930 British thermal units and perforation intervals are from 3025 meters to 2928 meters. The flow rates in Sembar are expected to increase significantly after stimulation of the formation.

This discovery is believed to have opened a significant new play in general for exploration in Pakistan and could have material impact on the exploration potential of the Safed Koh Block itself in both Rodho and unexplored structure namely Afiband. Dewan Petroleum believes that this is a significant natural gas discovery and will add to Pakistan’s gas reserves when fully developed and can produce substantial volume of gas along with condensate.

Dewan Petroleum has 60% interest in the Block whereas 30% interest belongs to Rally Energy Limited of Canada and 10% belongs to Oil & Gas Investment Limited of Pakistan.

DP World petition over Mundra terminal dismissed

CargonewsAsia.com reported that Ahmedabad’s civil court has notified DP World owned Mundra International Container Terminal Limited that its petition for an interim stay has been dismissed.

The court rejected this argument and held MPSEZ's argument that the sub-concession agreement should be in compliance with the concession agreement and that DP World diluted its equity in MICT by not intimating GMB about the acquisition. The permission was mandatory as per the concession agreement between MPSEZ and GMB in 2001.

Termination of the sub concession agreement means DP World will have to surrender the container terminal and hand over its possession to the MPSEZ.

A DP World spokesperson said “We are lodging an appeal on the procedural issues reviewed by the local court. The substantive legal issues will be addressed in the future.”

The DP World spokesman said that the issue was having no impact on MICT's operations. He added that "We continue to serve our customers at Mundra with the high level of efficiency they have come to expect. This benefits both the Mundra community and the region's economy."

Gujarat Maritime Board had slapped a notice on DP World, taking strong objection to the fact that the company had not sought its permission before taking over the MICT from UK's P&O. This takeover was a part of DP World's global acquisition of P&O's container terminal business.

Zenath acquires a large horizontal drilling machine

Arab News reported that ETA Ascon Star Group’s subsidiary Zenath Environmental Engineering Services has acquired the largest horizontal directional drilling machine in UAE.

The DD1100 horizontal directional drilling machine from American Augers has a pulling capacity of 500 tonnes, as against the 250 tonnes capacity the machines that are currently in use in the region. The new machine is widely used in the installation of large diameter pipelines under canals and sea beds, connecting islands and river crossings for the oil and gas industry and other utilities.

Mr Hameed Salahuddin director of ETA Ascon Star Group said that "This machine is one of its kinds in the UAE. Zenath’s acquisition of the machine will add great value to the company’s innovative techniques and boost its efficiency significantly in executing the contracts it undertakes."

Mr JSA Bukhari executive director of Zenath Group said that "Zenath has always taken pride in being at the forefront in introducing state of the art products and services for the benefit of its clients. The newly acquired DD1100 is yet another testimony to this progressive strategy."

Zenath is involved in a range of activities from waste management, waste water treatment, garbage chute construction to equipment hiring and trading, earthworks, horizontal directional drilling, and also deals in sand and aggregates, diesel, lubricants and foodstuff. Currently, Zenath is developing a mega rig with American Augers DD 1100 spread for drilling 1800 to 2500 meters in one drill in Saudi Arabia, UAE and India. Zenath’s major clients in the UAE include Dubai Electricity & Water Authority, Abu Dhabi Water & Electricity Authority, Sharjah Electricity & Water Authority and Nakheel.

Pakistan gets USD 300 million aid from Saudi Arabia

Business Recorder reported that Saudi Arabia has extended USD 300 million budgetary support for Pakistan to help it in easing the growing pressure on its economy.

A Pakistan government official said that "In a goodwill gesture for support for the people, Saudi Arabia has given a budgetary support grant of USD 300 million to Pakistan. The grant will help Pakistan bridge the fiscal gap in Pakistan that arose due to high global prices of oil and petroleum products."

Pakistan, after nuclear tests in 1998, had enjoyed for 3 years the facility of oil supply from Saudi Arabia against deferred payments. Pakistan was looking for 1998 like financial support from Saudi Arabia to offset pressure on the economy. The announcement of USD 300 million for budgetary support seems much less than expected financial help in Islamabad.

In the wake of growing current account deficit, Pakistan government was desperately looking for some financial support from Saudi Arabia. It had taken up the matter with the Saudi government many times.

In the recent past, Mr Mohammedmian Soomro Prime Minister of Pakistan had raised the issue with King Abdullah and sought oil supply against deferred payment. But, the response from the Saudi Arabia was not up to Pakistan's expectations. Then President Mr Musharraf took the issue with Saudi King during his visit. This time the response from Saudi Arabia has been positive.

But there is a question mark as to what extent budgetary support of USD 300 million will ease the pressure on its economy. Other than seeking financial help from Saudi Arabia, Pakistan government is taking different steps at home for setting aside the pressure. These include cutting down Public Sector Development Program size and non developmental expenditure for the current fiscal year.

Kuwait extends deadline for refineries upgrade scheme

MEED reported that Kuwait National Petroleum Company has extended the prequalification deadline for the multi billion dollar program to upgrade its Mina al Ahmadi and Mina Abdulla refineries by two months to May 15th 2008.

Chinese steel sector consolidation to be complete by 2010

Mr Zhang Xiaogang general manager of Angang Group while speaking on the sidelines of the National People's Congress said that China should achieve its goal of consolidating 50% of steel output in the hands of its top 10 producers by 2010.

He said that a number of small steel mills must be merged into big ones or they will disappear.

Mr Deng Qilin MD of central China's Wuhan Iron and Steel said the merger between Mittal Steel and Arcelor of Luxemburg has put steel companies across the world under pressure. He said that steelmakers must restructure and merge to meet the new challenges. He added that his company is proceeding with plans to merge with Panzhihua Iron and Steel, based in southwest China's Sichuan province.

TISCO to raise SS prices in April 2008

Interfax China reported that Taiyuan Iron and Steel Group Co Ltd China's largest stainless steel mill will raise its core product prices in April in response to soaring nickel prices.

TISCO sales department official, who wished to remain anonymous, said "We will definitely raise stainless steel product prices for April, in order to reflect soaring nickel prices. The official said moreover, our agents have already reacted to the recent surge in nickel prices by further raising product prices, which currently stand nearly CNY 1,000 per tonne higher than our March prices.”

Another anonymous source close to the situation said that the company is very likely to raise its austenitic stainless steel product prices by between CNY 1,600 per tonne and CNY 2,000 per tonne in April 2008 in order to offset raw material price hikes.

TISCO raised its ferritic stainless steel product prices by CNY 300 per tonne in March in reaction to rising ferrochrome prices following production cuts during snowstorms in mid January, but left austenitic stainless steel product prices unchanged from February.

The company's March price for cold rolled stainless steel sheet stands at CNY 32,100 per tonne while cold rolled stainless steel sheet is sold at CNY 15,600 per tonne.

Baosteel develops ultra high strength steel for engineering machine

It is reported that Baosteel has successfully developed 960 Mpa super high strength hot rolled steel for engineering machine which only can be produced by a few advanced steel mills globally. The strength of this steel is the highest level in the similar products so domestic market relied on import before.

Chinese domestic engineering machinery industry major Xugong Group expressed that after the small batch probation, it thinks the performance, quality of 960 Mpa super high strength HR steel exploited by Baosteel are good, can substitute for import.

In recent years, the demand of this 960 Mpa super high strength HR steel is increasing year after year and is expected to reach 80,000 to 100,000 tonnes in 2008.

Chinese coal exports in February down by 28% YoY

According to the latest statistics from China Customs show China exported 3 million tonnes of coal in February valued at USD 226.064 million down by 28% YoY and 28.9% YoY respectively from last year. Total export volume during the first two months amounted to 8.75 million tonnes up by 13.5% YoY.

An analyst said that figures in February indicated a prosperous export market in this year. "Due to the price gap of CNY 200 per tonne, China's export volume of coal would stay on a high track in February if exports were not restricted. The volume may increase in the future if domestic price fail to rise."

National Development and Reform Commission has said in a report that China would be a net coal importer in 2008. Effective coal supply will increase mildly as railway transport capacity will grow modestly. Coal import volume is expected to climb slightly in this year.

In the meanwhile overseas customers are decreasingly depending on Chinese resources. Korea Electric Power Corp has planed to boost coal imports by 15% this year, with a trebling in shipments from South Africa more than offsetting lower Chinese supplies. It has also said it had already contracted to buy about 91% of its expected demand, a big shift from last year when annual deals covered only 76% of imports.

(Sourced from MySteel.net)

Tangshan to move steel facilities to clean city air

It is reported that China's third largest steel maker, Tangshan Iron and Steel Group may be moved entirely to a new coastal facilities over the next decade as part of a drive to reduce urban emissions. The campaign to cut air pollution was spurred by the upcoming Beijing Olympics but is expected to continue long after the Games end.

The report cited an unidentified source as saying that "Even if there are no Olympics, we would need to prioritize sustainable development. The Olympics give us an opportunity to do this. Tangshan is at the gates of Beijing. If the wind blows, the pollution floats right over."

Mr Zhao Yong the city's party secretary said during a 100 day trial late last year, Tangshan city shut more than 1,000 small polluters from mid September to December and saw a clear improvement in air quality. He said Giant Tangshan Steel is working on a plan to shut its facilities in the city during the next decade as a long term measure to clean up the air.

Mr Zhao said Tangshan's 100 day shutdown of small steel, sinter, concrete and coke plants caused sulphur dioxide levels to drop by 25% and chemical oxygen demand a measure of water pollution to fall by 20%. He said. "We want to make the results of those 100 days permanent."

Chinese ferrosilicon price in upswings

It is reported that despite severe overcapacity, ferrosilicon industry has stepped into a rising period during recent two years, with price jumping to CNY 6200 per tonne from previous CNY 5500 per tonne.

As per report 75# FeSi and 72# FeSi are now quoted at CNY 6200 per tonne to CNY 6300 per tonne and CNY 6000 per tonne to CNY 6100 per tonne respectively in Gansu. The same materials are offered at CNY 6100 per tonne to CNY 6200 per tonne and CNY 6000 per tonne to CNY 6050 per tonne in Inner Mongolia. Prices have gained 20% compared with that in September 2007.

Due to raw materials prices hikes, unstable electricity supply after snowstorms, EU's anti dumping duties and China's strict requirements on environment protection, it is recognized that FeSi price will maintain on a high track.

Mr Zhang Zengchan assistant to chairman of China Ferroalloys Industry Association said FeSi industry boasts capacity of 10 million tonnes per year, indicating an overcapacity. But the industry is markedly influenced by electricity supply.

(Sourced from MySteel.net)

Thor Mining signs molybdenum off take agreement with CITIC

Thor Mining PLC announced that it has signed an off take agreement with CITIC Australia Commodity Trading Pty Ltd, a subsidiary of CITIC Australia Trading Limited to take 100% of the Molybdenum and Tungsten concentrates to be produced from its 100% owned Molyhil Tungsten Molybdenum Project located in the Northern Territory of Australia.

Final approvals for the development of the Molyhil Project are expected in during the second quarter of 2008, with the mine management plan currently under review by the Department of Primary Industries Fishing and Mining in the Northern Territory.

The Molyhil Project has a current resource of 3.73 million tonnes at 0.51% combined tungsten (WO3) and molybdenum (MoS2). The mining plan provides for the development of an open pit mining operation and a new processing facility. The mining reserve contains a total of 4.9 million pounds of molybdenum metal and 700,000 mtu’s of tungsten which will be produced over the expected 5.7 year life of the open pit design.

Mr John A Young CEO of Thor said that “The long running negotiation for the off-take agreement has been a critical factor in progressing the development of the Molyhil Project. We are very pleased to have secured CITIC as a partner and, with this off take agreement now in place, we will move forward with funding arrangements.”

Mr Ting Hu Guo executive director of CITIC Resources Australia Pty Ltd said that he was very pleased to sign this agreement with Thor. He said that “CITIC has been seeking to secure a long-term supply of Tungsten and Molybdenum, which are important raw materials for the Group’s expanding steel business in China. We are therefore delighted to support the Molyhil Project through this Life of Mine off take agreement, which clears the way for financing and development of this project to proceed.”

CITIC Group is one of China’s largest state owned companies with assets in excess of USD 180 billion. The activities of the CITIC Group include banking and financial businesses, industrial investments and international trade.

Chinese copper consumption to hit 5 million tonnes in 2008

Interfax China reported that China's refined copper apparent consumption will reach 5 million tonnes in 2008 edging up 4% from 4.8 million tonnes last year.

Mr Su Li vice president of Jiangxi Copper's trade department said "China is set to continue tightening its monetary policy in an attempt to curb an overheated economy and inflation, so we might see a slight slowdown in refined copper consumption growth this year."

He said that China's refined copper consumption will maintain stable growth in the long run due to growing demand from the power industry. China is currently pumping investment into its power grids, with the aim of increasing power generation capacity from 900 million kilowatts in 2010 to 1.6 billion KW in 2020.

Mr Su said "Despite the likelihood that decreasing copper concentrate treatment and refining charges will force Chinese copper smelters to cut production this year, China's refined copper outputs will still reach around 4 million tons in 2008. He said China's refined copper output in 2008 will rise 16.2% from 3.44 million tonnes in 2007.”

Mr Su said an additional 600,000 tonnes of copper smelting capacity and 700,000 tonnes of refining capacity came online in 2007 and will hopefully reach full production capacity in 2008. This will increase China's copper smelting and refining capacity to 2.84 million tonnes and 4.3 million tonnes respectively in 2008.

He also said that although copper concentrate supply shortfalls have become a stumbling block to the development of China's copper industry, high dependence on copper concentrate imports squeezes copper smelters' profits and accelerates industrial consolidation. He added that China is set to produce 950,000 tonnes of copper metal in concentrate form in 2008 up by 10% from 2007.

Chinese refined zinc exports likely to increase in H1 2008

Interfax reported that China's refined zinc exports will maintain upside growth in the first half of this year, on the back of rising London Metal Exchange zinc prices and market expectation of an export tax rebate cancellation.

Mr Ren Jianfeng an analyst said that "In January 2008, zinc spot prices in London stood at around USD 2,400 per tonne much lower than domestic spot zinc prices, which were around CNY 19,000 per tonne at the time. These low prices in conjunction with reduced production due to snowstorm damage, made domestic zinc producers reluctant to export in January. Speculation rather than fundamentals is leading investment in the broad commodity market at the moment.” He added that China will export at least 25,000 tonnes of zinc in March 2008 compared with 33,624 tonnes in March 2007.

Mr Sun Fan Shenzhen an analyst with Gold Bull Futures said "Chinese enterprises' zinc exports were relatively low in January, partly due to the Chinese New Year holiday, and partly due to January being a traditionally low production month. However, I think that as global consumption starts to lift in March, China's zinc export will increase from January levels."

China currently levies a 5% export tax on 1#zinc and a 10% export tax on 2# zinc. However, there is still a 5% export tax rebate on 0#zinc, the only standard zinc metal traded on the LME and SFE. According to widespread market rumors, the government intends to cancel the export tax rebate and levy at least a 5% export tax on zinc in the near future.

The General Administration of Customs said China exported a total of 10,245 tonnes of refined zinc in January 2008 down 85.6% YoY and down by 12.8 % from December 2007.

Shenhua Energy February coal output up by 26.5% YoY

China Shenhua Energy Company Ltd announced recently that it produced 14.8 million tonnes of commodity coal up by 26.5% YoY and sold 18.9 million tonnes in February 2008 up by 26% YoY respectively.

Shenhua Energy generated 6.32 billion KWH of electricity in February, up by 35.6% YoY and sold 5.86 billion KWH up by 35%.

Two dead after iron ore mine collapse in North China

Xinhua reported that a collapse in an iron ore mine killed two people in north China's Inner Mongolia Autonomous Region on Wednesday morning.

An official with the county's fire fighting department said the accident happened at 11:22 AM in Shengxin Iron Ore Mine of Bisiyingzi Town, Ningcheng County when the two miners were buried by mud after the mine's support frame gave way to water from busted pipes.

The official said the two were repairing the pipes at the time. Fire fighters dug them out and said they had suffocated to death.

The cause of the accident is under investigation.

Bayi Steel wins bid for a CNPC water pipeline project

It is reported that Bayi Steel wins the bid for a water transmission pipeline project of CNPC Dushanzi Petrochemical Corp's No 4 Water Source Project, for which Bayi Steel will supply nearly 2000 tonnes.

As per report the water transmission pipeline project of CNPC Dushanzi Petrochemical Corp's No.4 Water Source Project is an important supporting project for Dushanzi 10 million tonnage oil refinery and 1 million tonnage ethylene project, the petrochemical project with the largest investment in West China and the total investment is several CNY 100 million.

The project has attracted many suppliers to bid, and Bayi Steel finally wins the project with its favorable reputation, proven technology and excellent service, undertaking the supply of all the spiral welded pipes for this project.

China Merchants takes 5.4% stake in Ningbo Port

It is reported that China’s largest port operator China Merchants Holdings (International) Co Ltd has agreed to pay some USD 119.3 million for a 5.4% stake in the state owned Ningbo port.

As per report, the Ningbo Port Group, along with a China Merchants unit and five other promoters, have agreed to set up a joint stock company with limited liability in China to be named Ningbo Port Co Ltd. China Merchants have announced that it will subscribe, using internal cash resources, for 583.2 million shares in Ningbo Port Co upon its establishment.

The Ningbo Port Group, due to own about 90% of the new joint stock company, is slated to inject some USD 2 billion worth of port-related assets into Ningbo Port Co Ltd.

Ningbo port, located in the coastal province of Zhejiang south of Shanghai, is at the crossroads of the north south shipping route and the Yangtze River. It is comprised of several ports; the Beilun seaport, Zhenhai estuary port, the old Ningbo harbor which is now an inland river port, Daxie and Chuanshan. It is one of the Chinese ports with cargo throughput volumes exceeding 100 million tonnes per year.

South West China province to build 4 railways linking 3 ASEAN countries

Xinhua reported that Southwest China's Yunnan Province has speeded its pace to build four international railways linking Vietnam, Myanmar and Thailand.

Mr Qin Guangrong vice governor of province said that the four outbound railways are significant to the transport and economic development of Yunnan province and the three ASEAN countries. He said that his province will strive to start construction this year for the railway in Mengzi in Yunnan to the Sino-Vietnam border.

The preparatory work of the China-Myanmar railway expansion project has been in full swing. The preliminary work of building Kunming-Bangkok railway has been launched which will sharply improve the transport efficiency between the countries.

Baotou steel and Baosteel will carry out capital cooperation

It is reported that Baotou steel and Baosteel carry out capital cooperation in which Baotou would fetch part of funds from Baosteel to promote Baotou steel industrial structure adjustment and upgrade.

At present, the two sides are carrying out cooperation on management and technique, the next step is the capital cooperation.

Mr Cuichen the board chairman of Inner Mongolia Baotou Iron and Steel Company said the form of cooperation whether through directed additional issue or stock transfer.

He said that the assets reorganization between Baotou steel and Baosteel mainly be involved in Baotou steel’s iron and steel part, not including rare earth.

Panzhihua sells 0.37% stake in West China Securities

XFN-Asia reported that Panzhihua Iron and Steel Group, the parent of Panzhihua New Steel & Vanadium Co Ltd is selling its entire holding of 0.37% in West China Securities on the Chongqing United Assets and Equity Exchange.

Panzhihua said in a statement filed with the Chongqing bourse that the floor price is CNY 22.70 million and the closing date is April 2nd 2008.

China Metallurgical Corp to raise CNY40 billion in dual listing

It is reported that China Metallurgical Group Corp one of the Top 20 state owned enterprises in China is planning to list on both mainland and Hong Kong stock markets at the same time.

According to its IPO schedule China Metallurgical Group Corp submitted its IPO application to the State Assets Supervision and Administration Commission two months ago and may launch the dual listing as early as the end of August 2008. The estimated proceeds from the listing are CNY 40 billion.

As of the beginning of 2007, the group holds CNY 1.93 billion worth of shares in its 27 subsidiaries and the registered capital was CNY 2.96 billion.

China and Australia to set up clean coal R&D center in Beijing

ENS reported that two of the world's largest coal producing nations Australia and China signed a formal agreement for research and testing of clean coal technology in Beijing.

The agreement, between the Australian government research organization CSIRO and China's Thermal Power Research Institute, TPRI will see TPRI install, commission and operate a post combustion capture pilot plant at the Huaneng Beijing Co Generation Power Plant as part of CSIRO's research program.

As per report the pilot plant is designed to capture 3,000 tonnes of carbon dioxide a year from the power station and begins the process of adapting this technology to evaluate its effectiveness in Chinese conditions.

Dr John Wright director of CSIRO's Energy Transformed National Research Flagship said low emission energy generation is a key research area for the Flagship and he welcomes the support of the Australian government. He said "Climate change is a critical issue for Australia and internationally and we're delighted to be working with TPRI to help find solutions to this global challenge. This project is part of a major research program to identify ways to significantly reduce greenhouse gas emissions from the energy sector."

Mr Wright said "The project will focus on assessing the performance of an amine-based PCC pilot plant under Chinese conditions. It will allow PCC technology to be progressed in the Chinese energy sector which will have a much greater impact than operating in Australia alone."

The installation of the post combustion capture pilot plant in Beijing forms part of the Asia Pacific Partnership on Clean Development and Climate initiative. This program also includes a pilot plant installation at Delta Electricity's Munmorah power station on the New South Wales Central Coast, with an additional Australian site currently under negotiation.

Pangang to invest CNY 6 billion on coal chemical plant in 2008

It is reported that in 2008, Pangang will focus on the construction of key projects and the technology improving, to make preparation for the future development and contribute to the economy growth in Sichuan Province.

As per report, Pangang intends to invest CNY 6.0 billion on Vanadium Titanium and iron and steel projects construction and technology improving in 2008.

Pangang completed fixed assets investment of CNY 4.07 billion in 2007 and commissioned heat quenching production line, RH vacuum treatment facility in steel melting plant, new 150,000 tonnes per year oil pipe production line in Panchenggang. The projects under implementations are relocation and improving of No 3 and No 4 coke ovens in coal chemical plant, phase one and 500,000 tonnes per year rod and wire continuous rolling line in Panchanggang.

Jiangxi Cement to create JV with CNBM

It is reported that Jiangxi Wannianqing Cement Co Ltd signed agreements with China National Building Material Company Limited to jointly invest CNY 1 billion to set up a joint venture. On August after trading suspension for an hour its stock opened at limit up price of CNY 10.15.

As per repot the two sides will engage in the development of cement industry in Jiangxi Province and expand the annual production capacity of NSP cement to about 30 million tons.

Through low cost expansion like merger, restructuring, transfer and authorization of management of state owned capital, technical reform and building of new production lines, it wholly owns and controls more than ten companies distributing in Shandong, Jiangsu, Anhui, Henan and Hebei.

The Hong Kong listed company is a subsidiary under the wings of CNBM, with its main business covering cement, light building materials, fiber glass, glass steel and project service.

Russia may cut coal taxes to spur exploration

It is reported that Russia’s State Duma has unexpectedly revived the bill on lowering the coal severance tax intending to discuss in May 2008 the two fold reduction in this rate from 2009. The bill was backed up by the government and will be particularly advantageous for SUEK and metallurgical holdings.

Nowadays, the companies pay 4% from the revenues generated by selling the primary product. Therefore with today’s price of RUB 600 for a tonne of rough thermal coal, the rate equals RUB 24. It goes up to RUB 80 for the coking coal, which tonne costs RUB 2,000.

The proposal is to introduce different rates for different coal. For the coking coal, the basic rate of the severance tax will be RUB 40 per tonne and the thermal coal will have RUB 9 per tonne. Another difference in taxation will depend on the mining type. It is offered to zero the rate for the slate coal mining.

Mr Dmitry Kolomytsyn senior analyst of Unicredit Aton said the country’s energy balance is shifting from the gas to coal, the coal industry is strategic for today’s Russia. He said “As to the coking coal, the reason of tax easing could be encouraging the development of new deposits and the coal processing.”

Of interest is that the State Duma will focus on the bill right after Gazprom-SUEK venture is ultimately created.

ENRC and Kazakhmys in merger talks– Report

Bloomberg reported that Eurasian Natural Resources Corp said that it may bid for Kazakhmys Plc, seeking to combine Kazakhstan's biggest copper producer with its aluminum, coal and iron ore operations.

Kazakhstan based ENRC in a statement said that “The companies have talked and the proposal is one of several. No formal proposal has been made.

ENRC, which accounts for 4% of Kazakhstan's economic output, produces alumina, generates 16% of the country's electricity and has annual sales of more than USD 3 billion. ENRC raised GBP 1.36 billion pounds when it first sold shares