POSCO ground breaking ceremony on April 1st 2008 uncertain

PTI reported that uncertainty is prevailing over holding the ground breaking ceremony of POSCO project in Orissa slated for April 1st 2008.

The report said that Mr Naveen Patnaik chief minister of Orissa is unsure of the schedule for the ceremony. He told PTI that "We will certainly examine the issue.’

Mr Patnaik said the government would review the situation before making any formal confirmation on the scheduled function at the proposed plant site near Paradip. He said "We will see what best can be done on the day.”

Mr Patnaik and Mr Ku Teak Lee CEO of POSCO had earlier announced that the ground breaking ceremony would be held at the proposed plant site near Paradip on April 1st 2008, which is observed as the Utkal Diwas in Orissa and also foundation day of POSCO.

Indian government to take all measures to contain steel prices

PTI reported that Indian government will go all out to contain the prices.

Mr RS Pandey secretary steel told PTI that "Steel prices have risen considerably, particularly during the last three months. This is a matter of concern. All possible measures will be considered to address the issue.”

Mr Pandey said that "Steelmakers have cited rising raw material prices as well as the rising international prices as reasons for such an increase. However, there is a need to contain prices which is possible by augmenting supplies through containment of exports.’

He informed that Mr Ram Vilas Paswan steel mister has already told Parliament that the possibility of having a regulator for the sector will also be considered. However, he said it was also necessary that the prices of steel as well as inputs are contained.

Indian steel industry trapped in input cost spiral – ISA

Indian Steel Alliance has published a an advertisement in public interest highlighting the raw material cost push on Indian steel makers

It said that “Steel is the backbone of any growing economy. Steel industry is deeply concerned with the recent increase in prices globally due to high raw material prices. All commodities like mineral resources, food grains, energy, crude oil, nonferrous metals etc are at an all time high. Steel has only followed the trend in last two months. It is pertinent that the facts are brought out to the discerning public.”

ISA said that “The cost push of all raw materials used for steelmaking have gone up substantially from April 2007 to March 2008”
Iron ore - 2.5 times (Spot)
Coke - 2.9 times
Coking coal - 3.2 times (Spot)
Scrap – 1.5 times
Manganese ore – 3.7 times
Natural gas – 3 times (Spot)
Thermal coal – 3 times (Spot)
Transportation costs including sea, rail and road have almost doubled

ISA said that “The raw material cost push has increased the cost of production by INR 12,000 per tonne to INR 13,000 per tonne since Aril 2007. However, price for hot rolled coil has increased by about INR 6,500 per tonne only.”

ISA added that “TMT is a crucial input for construction and infrastructure. The major producers account for only 18% of the TMT produced in the country. The secondary steel manufacturers, which are the leading TMT have been impacted by high increase in scrap, iron ore and coal prices thereby pushing up the TMT prices.”

ISA also outlined the global trends. It said “Global steel prices have already been increased from around USD 600 per tonne in December 2007 to USD 970 per tonne in March 2008 to cover cost push during the period ie an increase of INR 15,000 per tonne without excise duty and taxes.”

ISA said that the Indian steel industry is closely linked to global trends and can not remain in isolation. It said “Any large gap in prices between Indian and International levels will reduce imports thereby increasing the demand and supply gap.”

SAIL RSP receives ISO 2000 certification

It is reported that a milestone was crossed with three units of the Steel Authority of India Limited’s Rourkela Steel Plant receiving the prestigious ISO 2000 certification.

Mr B N Singh MD of the RSP received the ISO certification for traffic and raw materials, entire cold rolling mill and special plate plant from Mr S Talukdar lead auditor of TUV India Private Limited.

Mr Singh said the ISO certifications stressed on the importance of systems rather than the individual. The ISO system which ensures ideal documentation also goes a long way in reducing cost and reaffirming self confidence in employees.

Mr Talukdar congratulated the RSP for achieving the ISO certification and said that the challenge ahead was to match the professionalism of competitors.

Anti POSCO faction ready to take on government

SNS reported that the POSCO Pratirodh Sangram Samiti has geared itself up for a confrontation with the state government on April 1st 2008 by pledging to hold is Vikalp Vikash Samavesh as opposed to the Posco foundation day celebrations.

Mr Abhaya Sahu leader of POSCO Pratirodh Sangram Samiti warned "It will be a showdown between us and the government not because we are determined to opposed the anti-people project but the kind of repressive preventive measures adopted by the government.’

He said that "The government has indulged in provocative measures like clamping Section 144 at Balitutha only to debar us from holding the Samavesh."

Mr Sahu added that "On 1 April, the statehood formation day will see thousands of villagers pledging to protect their motherland from the onslaught of multinationals Women, children and elderly people of the village are our soldiers and we are prepared to take on the government on 1 April. If Section 144 is not lifted we will violate it in thousands to hold the Samavesh and renew our pledge against the project.”

SAIL to start production at Kulti in August 2008

Mr Ram Vilas Paswan union steel minister, while laying the foundation stone of a INR 50 crore bridge on Damodar river last week, said that West Bengal based Kulti Steel Works will commence production by August 2008 and the modernization of steelmaker IISCO steel plant was on schedule to meet the 2010 deadline.

Mr Paswan said that the revival of the IISCO steel plant and Kulti Steel would be the harbinger of development in West Bengal. SAIL is investing over INR 20,000 crore for the modernization and expansion of its units.

Describing IISCO and Kulti Steel as national heritage, he urged the state government to extend sales tax waiver for the Burnpur based steel unit beyond the March 31st 2008 timeline as the plant is yet to regain its net worth.

6 States suggest sites for 2 proposed mega shipyards

Maritime States were requested by the ministry of shipping, road transport and highways to identify suitable location for setting up of international size shipyards, one each on the East Coast and West Coast of India respectively. In response, the following locations have been suggested by the Maritime States:

The following basic requirements are preferable for setting up of an international size shipyard:
1. The minimum land requirement of 1000 to 1500 acres and waterfront of about 2.5 Kilometers in length
2. Water draft of 10 meter to 12 meters
3. The site location for the proposed shipyards to have good rail and road connectivity;
4. Contiguity to a Major Port situated within the State.

Indian government is planning for setting up two international size shipyards, one on the East Coast and another on the West Coast of India. An international size shipyard may build and repair ships upto the size of Very Large Crude Carrier which has a carrying capacity of 300,000 DWT. The international size shipyard may have at least two and preferably three big dry docks 2 for building and 1 for repair, a quayside length of at least 2.5 kilometers and various support facilities for building and assembly of ships.

Mr T R Baalu minister of shipping, road transport and highways has proposed setting up these shipyards on a public private partnership basis. The minimum land required for the suggested sites was 1,000 to 1,500 acres and 2.5 kilometer waterfront with a draft of 10 to 12 meters apart from desired rail and road connectivity.

Zambia invites TATA for mining investments - Report

Live mint.com reported that the TATA group is in talks with the government of Zambia to explore iron ore and set up a steel plant in a proposed special economic zone in the African nation exclusively reserved for Indian companies.

The report quoted Mr Felix Mutati minister for commerce, trade and industry of Zambia as saying that “We will give them a mine and we are fast.”

He added that about 200 square kilometer has been identified in Kabwe in central Zambia for the India SEZ and already, 10 Indian companies have visited the country.

Mr Syamal Gupta chairman of TATA International Ltd and the Confederation of Indian Industry’s Africa committee, would not confirm TATA’s plans but said that “We are looking at all opportunities. We are exploring for coal, iron ore everywhere in the world.”

The TATA group, which began its African operations in Zambia more than 20 years ago, has diverse interests in that country, including hospitality, agriculture and in the automotive industry.

Karnataka foundries urge for banning iron ore export

BL reported that the increasing export of iron ore from Karnataka has had negative impact on foundries with many facing closure due to rising input costs as it has resulted in the increase in prices of pig iron, which the main raw material for the foundries.

Mr V Ramaswamy president of Karnataka Foundries’ Association president told presspersons that over 500 foundries operating in Karnataka and employing over 60,000 people had been facing problems as the prices of pig iron has gone up by 40%.

He said that exporters were paying less royalty to the Government, but were getting good price from the foreign buyers. He added that “This had led to acute shortage of raw material for foundries threatening their closure. Foundries in India are not in a position to meet the demand owing to sudden increase in prices of raw materials.”

Mr Ramaswamy said the Union Government should come to the rescue of foundries by banning the export of iron ore and prices of pig iron should be fixed for the secondary producers.

Indian coal demand may reach 731 million tonnes in 5 years

Mr Dasari Narayana Rao union minister of state for coal said that India's demand for coal for power generation over the next 5 years will be 731 million tonnes.

Mr Rao said that "The total import by various consumers during 2006-07 was 48.80 million tonnes and as per available information during 2007-08, till September 2007 the total import by various consumers was about 26 million tonnes."

He added that major production bottlenecks at coal mines run by Coal India Limited were caused by problems with land acquisition.

Indian maritime policy under finalization

Mr TR Baalu union minister of shipping, road transport & highways said that the policy for the maritime sector seeks to combine vision and strategy for the sector through harmonious and coordinated development of our maritime assets including the ports, shipping, inland water transport systems and the ship building and ship repair industries.

He added that the locations for setting up deep sea ports have not been identified.

BHEL to spend INR 5,000 crore on JVs

BS reported that power equipment manufacturer Bharat Heavy Electricals Ltd is likely to spend nearly INR 5,000 crore over the next three years in its yet to be formed JV companies with power utility NTPC and Nuclear Power Corporation of India Ltd.

Mr K Ravi Kumar CMD of BHEL said that “Some of this money will also be spent on other possible ventures with private sector companies.”

Mr Kumar said that BHEL and NTPC agreed to form a joint venture in September 2007 to construct power plants and also manufacture power equipment. He added that the new company was likely to be formed by next month. The proposed company will take up projects both in the country and overseas.

Mr Kumar said that a joint venture with NPCIL is also likely to be formed in the first half of the next financial year. The joint venture is likely to take up engineering, procurement and construction for nuclear power plants in India and overseas. NPCIL, which is the only company mandated to set up nuclear plants in India, currently generates about 3,900 MW of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 MW over the next six years.

BHEL in which the government owns 67.72% stake is also looking to buying a mid to small sized company for which it has INR 1,000 crore. Mr CS Verma finance director of BHEL said that “We are talking to many companies in India and overseas and we are primarily looking at companies in the US and Europe. He added that the company, which has cash reserves of over INR 4,000 crore, would fund these investments through its internal accruals.

Infrastructure experts call for an independent regulator

Mr Vinayak Chatterjee co chairman of CII National Council on Infrastructure and also chairman of Feedback Ventures Limited recently said that there is a need to set up independent regulatory authorities on energy, transport and urban infrastructure at the state level to ensure smooth implementation of infrastructure projects.

He added that "In the absence of a regulatory authority at the state level, it would be tough to attract private investment for the infrastructure projects."

Mr Chatterjee also stressed on the need for the eastern region states to create an off budget infrastructure development fund, which is already in place in the states of Punjab and Gujarat. He said that "This apart, all states should aim towards effective utilization of all central government schemes like Jawaharlal Nehru Urban Renewal Mission, Viability Gap Funding, Accelerated Power Development and Reform Program and the Transmission and Distribution Fund proposed in this year's union budget."

He pointed out that in 2006-07, West Bengal should have invested INR 15,631 crore on infrastructure projects which comes to 9% of the state's net domestic product of INR 1,73,674 crore.

Indian economy can match US economy by 2050 – PWC

According to a report prepared by PricewaterhouseCoopers, India’s economy will grow to 90% of the size of the US economy by 2050 as the global centre of economic gravity is already shifting to China, India and other large emerging economies.

The report said that "Our latest projections suggest that China could overtake the US in around 2025 to become the world’s largest economy and will continue to grow to around 130% of the size of the US by 2050."

The study projects Brazil to overtake Japan by 2050 to move to the fourth place, while Russia, Mexico and Indonesia all have the potential to have economies larger than those of Germany or the UK by the middle of this century.

The report said that long term prospects for China, India, Brazil, Mexico, Russia, Indonesia and Turkey are still upbeat, but an additional 13 emerging economies also have the potential to grow significantly faster than the established Organization for Economic Cooperation & Development countries.

The report projects India to move ahead of China in GDP growth due to several factors, mainly the significantly slower labor force growth in China because of the rapidly-ageing population of over 45 years. On the other hand, the UN has projected India’s working age population to continue growing at a healthy rate.

China Light is lowest bidder for Haryana power project

It is reported that Hong Kong based China Light & Power Holdings Limited has emerged the lowest bidder for setting up Haryana Power Generation Corporation's 1,326 MW thermal power project at Jhajjar in Haryana.

The bids were opened on March 17th 2008 and the letter of intent is likely to be awarded by end of March 2008. China Light outbid Lanco Infratech and Torrent Power by quoting per tariff of INR 2.996. Lanco emerged as second lowest bidder at INR 3.046 per unit, while Torrent Power followed at INR 3.82 per unit.

The proposed power project with an investment of INR 7,000 crore will be implemented in two units of 660 MW each. Around 1,215 acres of land has been acquired for the project and letter of intents for environment impact assessment and geo technical studies have already been completed. Draft detailed project report has been prepared from Desein and is in the final stages. The project will get coal linkage from Coal India's North Karanpura fields. The first phase of 660 MW is expected to become operational within 42 months from the signing of the power purchase agreement.

China Light will have to sell 90% of power to Haryana Power Generation Corporation Limited and the balance 10% outside Haryana.

Chhattisgarh denies signing water supply pact with NTPC Seepat

Chhattisgarh government has last week denied that it has ever signed any pact with National Thermal Power Corporation to draw water from the state’s resources for its 2,980 MW Sipat power project in Bilaspur district.

Mr Hemchand Yadav water resources minister of Chhattisgarh asked "Which agreement? Neither the undivided Madhya Pradesh nor the Chhattisgarh government had ever signed any agreement with NTPC to provide water from the state’s resources to the Sipat plant."

He added that water was supplied to the plant earlier following some understanding and not any agreement.

NTPC management has been stating that the Chhattisgarh government reneged on its commitment to supply water and this had put on hold the commissioning of the first 500 MW unit of INR 12,000 crore Sipat power project. After the trial run for 14 days, the unit had to be closed due to shortage of water. The second 500 MW unit would have been commissioned in March 2008 or early April but that plan is also put on hold.

NTPC has been passing through the worst ever crisis in Chhattisgarh with two of its major projects at stake. Besides the Sipat plant, the construction of 500 MW expansion unit in the 2,100 MW Korba plant has also run into rough weather after the state government curtailed the quantity of water supplied to the plant.

India sets up 69 MW waste to energy based power projects

Mr Vilas Muttemwar union minister of state for new & renewable energy said that 31 waste to energy based power projects aggregating to 68.62 MW capacity in 8 states and 36 demonstration wind power projects aggregating to 70.9 MW capacity in 9 states have been set up with central financial assistance from ministry of new & renewable energy.

He said that moreover, commercial wind power projects of about 7844 MW capacity have been installed in the country through private investment. Resource Assessments are being carried out for power generation from wind and biomass resources in the country, including the backward and rural areas.

Mr Muttemwar said that wind solar hybrid systems and biomass gasifiers are being installed for meeting the energy requirements in various states, including the backward and rural areas. He added that "The ministry is also implementing a program for electrification of remote un electrified census villages and un electrified hamlets of electrified census villages through various new and renewable energy sources including biomass resources such as crop residues and agro-industrial wastes."

He further added that central financial assistance of INR 10.03 crore for waste to power projects and INR 1.90 crore for demonstration wind power projects has been provided by the ministry to various states during the last 2 years.

KSEB inks PPA with wind energy promoters

It is reported that Kerala State Electricity Board has signed agreements for purchase of power with 4 promoters of wind energy projects in the state. The promoters are
1) Bhima Brothers
2) Poppy Umbrella Mart
3) Watts Electronics
4) Shah Agency

The wind energy projects are coming up in Palakkad and Idukki districts. A total of 33 wind mill units are being set up at Agaly in Palakkad district and 44 at Ramakkalmedu in Idukki district with private participation. At Agaly, each unit will have a capacity of 600 kilowatts, which will work out to a total installed capacity of 19.8 MW for 33 units.

BMW to source chassis and engines from India

According to a BMW AG board member, the company is assessing over 100 Indian component manufacturers before it begins to outsource engines and chassis for its global manufacturing operations.

The report quoted Mr Ind Herbert Diess who is on the BMW AG board as saying that “We are impressed with the quality of die casts and forgings in India that we use for our global operations. The quality of products from second and third tier is impressive. Once our pilot project evaluating 100 ancillaries is completed we will outsource engines and chassis for our cars.”

BMW purchasing office at Gurgaon in Haryana, currently sources motorbike handles and die casts from India. The India outfits of multinationals like Mico Bosch and Conti also supply it software solutions.

Hyderabad Metro to link up airport with 12 kilometer stretch

BL reported that the USD 2.2 billion Hyderabad Metro Rail Ltd, a project aimed at providing mass rapid transport system and decongest the city, may now be extended to the new Rajiv Gandhi International Airport by adding a new line of 12 kilometer in the next phase.

Mr NVS Reddy MD of Hyderabad Metro Rail Ltd said that the financial bids for the project will be called by April and a developer from among five in the fray will be chosen by June. He said that the project being guided by the Delhi Metro Rail Corporation and with the support of consultants Span Semaly will have three major corridors.

He added that each station will be truly world class with adequate parking and circulating areas. The first phase of three lines will cover 66 kilometer stretch and with the need felt to add a mass transit system to airport, it is now proposed to add additional 12 kilometer stretch to the second line from Secunderabad that passes through Old City and reaches the airport. This is expected to cut short time and add to convenience. He also said that to make these three major lines accessible to people, it is proposed to link them up with feeder bus services.

Once the financial bids are through, the build, own and operate developer would be chosen from among the five consortia led by Magna Allmore, Reliance ADAG, Navabharat, GVK and Essar.

CSN proposed slab plants facing one year delay

Bloomberg reported that Brazil Cia Siderurgica Nacional is at least one year behind schedule with plans to build two steel slab mills the company was depending on for production growth.

CSN in April last year said that it expected to set up a 4.5 million tonnes per year plant in Rio de Janeiro by September 2009 and another of the same size in Minas Gerais state by August 2010. But CSN, which hopes to triple its steelmaking capacity, failed to secure China's Baosteel Group Corp as a partner in one of the projects.

Mr Otavio Lazcano CFO of CSN in a telephone interview from Sao Paulo said that “We are facing delays in the signing of accords with the state governments on legal, tax and infrastructure issues.” He added that “We may move ahead with the slabs projects either with a partner or alone. We should be able to expand by 9 million tons a year capacity within the next five years.''

Mr Lazcano said that CSN in 2007 held talks with China’s Baosteel that failed to result in a partnership. The Chinese company confirmed it would instead build a USD 3.6 billion slab mill with Cia Siderurgica Vitoria and Cia Vale do Rio Doce in Espirito Santo state.

In December, CSN signed a preliminary accord with the Minas Gerais state government for a slabs plant, Mr Lazcano said that a similar accord is being worked on with the Rio de Janeiro state government, which has not yet granted environmental permits, he said.

Prices of long products to reach new peak by May - GFMS

Global consultancy firm GFMS recently said that the global prices of long steel products are likely to rise sharply in 2008 and peak at a new record by May.

GFMS in a steel market report said that long product prices, which had increased by 44% over the last twelve months, could climb by a further 10% to a fresh peak, but prices were expected to soften later in the year, as the current panic buying might lead to higher inventories and would probably draw out more supply from high cost areas.

GFMS said that “We believe that prices will come off highs, but will remain well above 2007’s averages as higher material pricing, combined with strong demand in emerging markets and limited additional supply will keep the market tight and vulnerable to price spikes.” It added that on average, 2008’s prices would be some 40% above the average prices of last year.

GFMS explained that emerging markets were driving the higher prices, as demand in mature economies was weak. Prices in Europe and North America were lower than in the Commonwealth of Independent States, the Middle East, Latin America and North Africa.

It said that “Europe is currently a net exporter of long products, while the US imports of long products are at their lowest for many years. But Russia and Ukraine, as well as other smaller suppliers such as Brazil, Egypt and North African countries were reducing export supplies thanks to higher domestic demand.”

While China also reduced export volumes owing to higher tariffs, GFMS said that it believes that the current high prices would lead to an increase in exports from that country as it currently had spare capacity. However, countries in the Gulf and other emerging economies would continue to draw in long products.

ThyssenKrupp BF 1 in Duisburg to restart operation in April

ThyssenKrupp announced that after a record downtime of only 70 days, blast furnace Schwelgern 1 of ThyssenKrupp Steel in Duisburg is expected to begin its fifth campaign at the beginning of April. Built in 1973, the unit was shut down at the end of January after a campaign lasting approximately 12 years.

ThyssenKrupp in a release said that “The unit is now being completely modernized. The inside of the blast furnace is being relined with refractory material 5,500 tonnes of advanced material will be used for this alone. In addition, the furnace cooling system is being upgraded. 1,800 out of a total of 2,100 cooling plates are being replaced and six rows of cooling plates will replace one row of staves to intensify cooling in the bosh.”

The release further added that “In the cast houses, the complete runner system and refractory lining are being replaced. The tap hole equipment is also being overhauled. The refectory lining of the hot blast stoves is being refurbished the screens, controls and extraction lines in the stock house are being modernized. Further repairs and renewals are being carried out on the coal injection system, gas cleaning system, emergency water supply, re-cooling system, slag granulation system as well as the expansion turbine, clarification plant and sludge drying system.”

ThyssenKrupp said that an approximately 300 strong team from ThyssenKrupp Steel is handling this gigantic modernization project with the help of around 100 national and international contractors a significant proportion of the work is being carried out by companies from other segments of the ThyssenKrupp Group. The project was planned down to the last detail over a one and a half year period in order to keep downtime as short as possible. Overall, the upgrade represents an investment of around EUR 150 million and over a tenth of the cost is for additional pollution control equipment. To further improve the environmental situation, a new filter unit was built to collect cast house and stock house dust in 2004.

ThyssenKrupp said that after three and a half decades of production, blast furnace Schwelgern 1 will produce its 100 million tonne of pig iron at the beginning of May 2008 and its currently providing 550 jobs for employees of ThyssenKrupp Steel AG, plus several times that number at outside contractors in the region.

Schmolz+ Bickenbach AG revenue in 2007 up by 50% YoY

Schmolz+Bickenbach AG last week announced that the adopted strategy of alignment to the production, processing and distribution of high grade steel products is successful. In 2007, despite the drastic price fluctuations in some raw material prices, it has achieved record net income.

SCHMOLZ+BICKENBACH AG said that increased sales volumes, higher revenues due to alloy prices and an expanded scope of the consolidation produced strong growth in net sales income compared to 2006.

2007 result highlights are
1. Group revenue rose to EUR 4,246.9 million as compared to EUR 2,831.5 million in 2006.
2. EBITDA increased to EUR 416.0 million from EUR 291.6 in 2006.
3. Operating profit was EUR 327.7 million from EUR 227.0 million in 2006.
4. Group net income rose to EUR 184.3 million as compared to EUR 144.6 million in 2006.

Schmolz+Bickenbach AG said that again in 2007, important acquisition projects were completed that add further strength to our market position for high grade steels in the international markets. Through the integration of A. Finkl & Sons Group, Chicago, with steelworks and processing plants in the USA and Canada, we have become the world market leader for tool steels. It added that the acquisition of the Swedish company Boxholm Stal AB reinforces our position for bright steels in Scandinavia and the Baltic States. There were also various acquisitions and new establishments of distribution companies in European countries.

OECD cuts economic forecasts for Japan and US

It is reported that the Organization for Economic Cooperation and Development has revised downward its economic forecasts for Japan and the United States for the first and second quarters of the year.

Organization for Economic Cooperation and Development said that Japan's economic growth for the January to March 2008 quarter was downgraded from 0.4% projected in December to 0.3% for the first quarter and from 0.4% to 0.2% for the second quarter in gross domestic product. It also cut US economic growth for the first quarter from 0.3% to 0.1% and from 0.4% to flat for the second quarter.

On the Japanese economy, the Paris based OECD said in an interim update, "In Japan, quarterly national accounts are volatile and prone to large revisions, but overall the pace of underlying growth seems to be softening as well, notwithstanding the support from still buoyant neighboring Asia economies. How macroeconomic policies should react is contingent on the outlook for activity and inflation beyond the near-term projection horizon as well as on the balance of several risks," such as developments in oil and other commodity prices and financial turbulence, it said.

OECD said that the US economy, meanwhile, is now essentially moving sideways, if not contracting outright. It may be premature to declare a recession, but with the pace of activity so far below potential, economic slack is widening rapidly.

BHP Billiton to buy nickel from Metallica Minerals

Platts reported that BHP Billiton has agreed to buy 100% of contained nickel from the Lucky Break Nickel Project in Queensland, owned by Australia's Metallica Minerals and its joint venture partner Metal Finance Corp.

The contained nickel produced from the project will be refined at BHP Billiton's Yabulu nickel refinery near Townsville in north Queensland.

Metallica said that under the agreement, BHP Billiton will buy 1,500 to 1,800 tonne per year of contained nickel for the life of the operation, based on an agreed percentage of London Metal Exchange prices for the metal, but it did not disclose the percentage amount.

Metallica added that the nickel supply agreement has significantly enhanced the Lucky Break operation by providing a secure long term local market for the project on favorable commercial terms, and access to a broad range of technical and commercial skills.

Construction of the Lucky Break project has started and it is expected to be commissioned end 2008.

America exports 1.32 million tons of scrap in January

American exports of scrap in January 2008 went up by 10.6% YoY to 1.32 million tons.

Turkey, the top export destination, registered faster growth with 268,000 tons. It was followed by Taiwan, China, Canada and South Korea, with 188,000 tons, 161,000 tons, 111,000 tons and 80,000 tons respectively.

(Sourced from YIEH.com)

Oriental iron to invest USD 7 billion in Congo project

Bloomberg reported that Oriental Iron Co a company led by Israeli diamond entrepreneur Mr Dan Gertler will invest USD 7 billion in an iron ore project in the Democratic Republic of Congo.

The report citing Mr Martin Kabwelulu Mines Minister as saying that the mine will be built in the country's northeastern Orientale province at a site where there are seven deposits containing 700 million tonnes of iron ore.

Higher yen rate suffers Japan electric furnaces

JMB reported that Japanese electric furnace carbon steel makers' profitability are suffering from higher yen rate along with higher cost for ferrous scrap and materials and have stopped export offer of products and billet under higher yen rate.

As per report the concrete reinforcing steel bar makers are estimated to lose around JPY 15,000 per tonne due to lower shipping price and higher cost.

United Spiral to produce large diameter line pipe

It is reported that US based United Spiral Pipe LLC will enter production for large diameter line pipes from next April.

The new facility will have a total annual maximum capacity to 300,000 tons and will focus on large diameter production from 24 inches to 64 inches and grades up to X80.

United Spiral has a bright view on this new facility due to the outlook on the development and implementation for the line pipe markets.

Taiwanese H beam price to up in April

It is reported that Taiwan’s H beam price is expected to rise again by USD48 to USD 64 per tonne to reach USD 935 to USD 942 per tonne in April 2008 since the electricity and oil prices is anticipated to raise after the coming presidency election.

Furthermore, it’s said that mills might raise H beam price again in order to offset increasing scrap price.

(Sourced from YIEH)

River Steel expands into West Salem

River Steel Inc last week announced that it has begun operating in its new fabrication facility in West Salem. The new facility is located within the Lakeview Business Park at 1115 Industrial Drive. The new plant was built due to increased and sustained business within the industries it primarily services.

Mr Timothy Brennan CEO & president of River Steel Inc and its affiliate company La Crosse Technical Consultants announced the USD 6.9 million expansion to company staff at a recent employee meeting. Construction of the project is expected to begin in March of 2007, with completion of the project by December of that year. It is expected that the company will begin hiring an additional 30 experienced welders and machine operators in the very near future.

Mr Timothy Brennan added that “This doubling of the size of our fabrication operation is due in a large part to the increased order demand from our longtime client, Bucyrus International, Inc of South Milwaukee in Wisconsin, the world leader in large electric earthmovers and heavy excavating machines. Our company typically fabricates for BUCYRUS the operator cab, main house structure, control room, utility room, lube room and filter houses for the company’s 100 tonne capacity Model 495 Electric Mining Shovel, of which we usually fabricate 4 to 6 units per year.”

He added that “Due to the increasing global demand for coal, iron ore, copper and oil (tar sands), the industry projects a period of prolonged growth resulting in an anticipated increase in orders and production volume.”

River Steel is a full service steel fabricator and manufacturer supplying original equipment manufacturing components, structural fabrication, heavy duty trailers and other custom manufactured orders for fabricators, manufacturers and suppliers. The company, founded in 1954, currently operates out of a 50,000 square foot facility on 9 acres of land and employs 38 people, averaging over 16 years of tenure with the company.

US forecast for auto sales gloomy

Purchasing.com reported that JD Power & Associates cut its forecast for new vehicle sales in the US by 4.8% to 14.95 million a level last seen in 1994. JD Power & Associates told the Wall Street Journal that the sales market will weaken further in the second quarter before beginning a rebound.

The market research firm, while noting weaker sales in January and February, said that much of the outlook reduction was due to slumping consumer confidence and persistent economic turbulence. JD Power's prior 2008 sales forecast was 15.7 million; the last time US sales totaled less than 16 million vehicles was 1998.

Auto sales were expected to be weak this year given the economic climate and with few new models driving traffic to showrooms. In addition, delinquencies on auto loans have been increasing, and the credit crunch has tightened lending standards.

South Korean shipbuilders bumper year continues

Yonhap reported that South Korean shipyards, led by Hyundai Heavy Industries Co are raking in massive shipbuilding contracts this year, dispelling concerns that a slowdown in the US economy may pose a threat to the global shipbuilding market.

Hyundai Heavy won USD 5.7 billion worth of new contracts last month, an industry record, buoyed by growing demand for vessels to move consumer goods and fuel. Hyundai Heavy along with its unit Hyundai Samho Heavy Industries Co clinched USD 7 billion worth of orders in the first two months of the year, a great leap from the USD 803 million it received during the same period last year.

According to Mr Lee Young min an analyst at Kiwoom Securities, Hyundai Heavy and its unit Hyundai Mipo Dockyard Co have received orders so far this year equivalent to 25% and 30% respectively of their yearly targets. He added that "Other shipyards such as Daewoo Shipbuilding & Marine Engineering Co and Samsung Heavy Industries Co are also showing a good start in their business this year.”

Mr Cho Joon young an analyst at Shinyoung Securities said that "There have been concerns that shipbuilders' fundamentals may worsen as the troubled US mortgage market may pose a significant risk to the sector. He added that "But local shipyards are defying it.”

Mr Cho said strong demand for ships will remain this year, fueled by growth in China and other emerging economies. According to London based market researcher, Clarkson Plc, global shipbuilders have won a total of 6.38 million compensated gross tonnes in new orders for the first two months of the year, a steep fall of 36.2% YoY. But South Korean shipyards have won a combined 4 million in new orders, accounting for 62.7% of the total shipbuilding orders placed during the cited period. According to Clarkson, the figure was also up 63.3% YoY.

Shipyards in South Korea, the world's top shipbuilding nation, have won record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world. The shipbuilders already have enough orders to keep them busy for about four years. But investors have been worried that the US subprime mortgage crisis could leave global shipping lines facing difficulty in financing new vessel purchases this year, leading to a decline in orders.

Tinfos takes 14% stake in Spitfire

Australian exploration company Spitfire Resources Limited announced that it has secured the strategic support of the diversified Norwegian based industrial, trading and metals & alloys group, Tinfos AS, as its new major shareholder via a 14% share placement.

Spitfire has agreed to make a placement of AUD 8.65 million shares at 20 cents per share to Tinfos, raising AUD 1.73 million. The proceeds of the share placement will further strengthen Spitfire’s cash position to in excess of AUD 7 million and will be used to accelerate the Company’s manganese exploration activities in the East Pilbara region of Western Australia.

In addition to acquiring the strategic interest in Spitfire, Tinfos has agreed
1. To consider assisting Spitfire with future financing either by way of project mining finance or direct company capital injection to help Spitfire evaluate, explore and develop other manganese projects.
2. To consider providing technical and funding support to Spitfire to assist it in evaluating and developing its South Woodie Woodie Manganese Project in Western Australia.

Mr James Hamilton MD of Spitfire said that the Company was delighted to have secured the involvement of Tinfos, a leading supplier of metals and alloys and key player in the global manganese business, as a supportive major shareholder. He added that “We are pleased to welcome Tinfos as a new major shareholder and strategic partner to help us with our manganese ambitions. In addition to strengthening our cash position during a particularly difficult period in global equity markets, this share placement introduces a strong strategic partner to the Company to support our forthcoming manganese exploration activities.”

Mr Hamilton said that “Tinfos also understands and is supportive of Spitfire’s secondary corporate goal, which is to bring in other assets to the company even if they are non-manganese related. Ultimately, this partnership significantly increases the range of development options we have available to us at South Woodie Woodie should our forthcoming exploration programs be successful.” He added that “With the global manganese market continuing to strengthen on the back of strong demand from the steel industry and tightening high-grade ore supply, Spitfire is now ideally placed to capitalize given the support and knowledge of Tinfos.”

Spitfire Resources Limited is an Australian resource company initially focused on the exploration and development of a portfolio of manganese exploration assets in the East Pilbara region of Western Australia.

Europe becomes uncomfortable with strong euro

Xinhua reported that European Central Bank board member Mr Lorenzo Bini Smaghi defended the bank's role in the aftermath of a warning by European Union leaders over the relentless rise of the euro against the US dollar.

Mr Smaghi said that the European Central Bank's main task is to keep prices stable and avoid the effects of second round inflation, adding that exports have held up well in recent years despite the rise of the euro. His remarks came after EU leaders issued a rare collective warning at their summit.

Wrapping up a two day summit, leaders from the 27 EU member states made a last minute addition to their final conclusion which said that "Excessive volatility and disorderly movements in exchange rates are undesirable for economic growth. In the present circumstances we are concerned about excessive exchange rate moves.”

The warning came as the euro climbed to a series of new highs against the dollar. Up to Monday, the single currency of the 15 nation euro group had touched 1.5903 dollars in New York trading, the lowest level since it was introduced to world financial markets as an accounting currency in 1999.

Analysts said that the unusual warning underlined the nervousness among European politicians and business leaders about the euro's steep climb against the dollar and other currencies. It added that a strong euro is certainly a burden for European exporters, making their goods less competitive in the United States and other dollar linked markets.

Wescoal hopes for own output in 2 years

miningmx.com reported that coal trader Wescoal intends to start to mine coal within a couple of years and has a number of possible prospects in Mpumalanga, KwaZulu Natal and the Waterberg.

The report quoted Mr Petrus Janse van Rensburg CFO of Wescoal as saying that “We are applying for prospecting rights. We should come up with good news in the next year, at least getting some prospecting rights.” He added that if the prospecting rights come through and the resource is proved up the company may be mining in about two years time.

Mr Van Rensburg said that when the company starts to mine its own coal it will have some grades suitable for sale to Eskom. Generally, Eskom buys lower grade coal than what is known as A grade coal, which is usually exported, or the B grade, which is sold to industrial users such as breweries that use steam in their production processes.

Earlier this month Wescoal completed the acquisition of AtlantisCoal Estate CC and Express Technology CC. Wescoal, which listed in 2005, sells coal in the domestic market and because it does not have its own mines as yet it is not eligible to receive an allocation to export through Richards Bay Coal Terminal.

Wescoal currently supplies coal to a number of the municipality operated power stations such as Kelvin in Johannesburg. It also has a washing plant outside Witbank which processes 35,000 tonnes of coal a month most of which goes to industrial users.

RBCT confident about expansion despite coal supply crunch

Mining Weekly reported that state owned power utility Eskom's coal crunch would not affect or delay a potential phase six expansion of the world's biggest single coal terminal to bigger than 100 million tonnes a year.

Mr Kuseni Dlamini chairperson of Richards Bay Coal Terminal said that the terminal company had completed a study late last year which showed that there was a business case for expansion beyond the 91 million tonnes a year by 2009.

When asked on what Eskom's coal shortage would have on the possible expansion. Mr Dlamini said that "I do not foresee any impact.” He explained that export coal and the fuel that the power utility burned in its power stations were of different grades. Mr Dlamini said that however, what could impact on the phase six expansion was another parastatal, rail monopoly Transnet Freight Rail's, ability to boost its coal carrying capacity to the port.

Transnet Freight Rail said in January that it would support industry expansion, but only if it had assurances that the coal miners would have enough coal to take up any expanded rail capacity.

The coal terminal's management had not yet decided on the quantum of the potential expansion, but Mr Dlamini said that it was certainly likely to be bigger than an increase to 100 million tonnes a year.

When asked about the possible timing of any further expansion Mr Dlamini stressed that "We cannot expand in isolation. What we've said is that we will take the decision on the ability of Transnet." But he said that he was confident that there was enough coal in South Africa to meet both domestic and export demand.

Vinacomin sets 60 million tonne coal target by 2015

VNS reported that the Viet Nam National Coal Mineral Industries Group expects to produce 60 million tonnes of coal per year by 2015, 150% more than at present.

Mr Tran Xuan Hoa general director of Vinacomin said that to reach its goal, Vinacomin plans to open seven to 10 new coal mines, adding 1.5 to 2 million tonnes to capacity each year between 2008-15, even though exploratory costs are high.

Mr Hao said that "With its existing facilities and technology, Vinacomin can exploit mines up to 100 m underground, much less than the several hundred meters in the rest of the world. We are willing to welcome foreign investors to exploit our coal.”

Mr Hao further added that "Exploratory results show Viet Nam has great reserves of coal," including 10 billion tonnes at 300 meter in the northern province of Quang Ninh and hundreds of billions of tonnes at a depth of 1,000 meter in the Red River Delta region.

According to Mr Hoa, Vinacomin has established two subsidiaries in preparation for exploiting coal in Quang Ninh’s Cam Pha and Uong Bi districts. He added that "It normally takes two or three years to develop a mine, but as the two companies are authorized by the Government to hire contractors the mines will begin operation sooner.”

Mr Hoa said that besides developing new mines, the national coal group is negotiating with partners to import coal in order to meet domestic demand estimated at 70 to 80 million tonnes in 2015, mostly for use in thermo electric plants.

Vinacomin at present capacity is about 40 million tonnes a year, enough to serve domestic demand as well as exports.

Siemens unveils surprise profit warning

AFP reported that German industrial giant Siemens issued a surprise profit warning last week saying that Q2 earnings would be cut by some EUR 900 million after a review of major projects.

Simens in a statement said that a weaker than expected performance in projects at its energy division, which builds power plants, its transport unit and a British contract for information technology services meant a hit to earnings in the three months to March.

It added that delays in a large number of turnkey projects in the fossil power generation operations had an adverse effect adding it had also suffered structural challenges in the supplier markets and delays recruiting experienced project engineers.

Siemens said it expected the EUR 900 million impact to be the largest piece of any additional financial burdens for 2008.

Siemens group also affirmed its 2010 financial targets, saying that definite progress toward these targets is expected in 2009. It said that the profit warning was a surprise for the conglomerate, which is active in diverse areas including the construction of tramways and turbines, and the manufacture of telecommunications equipment.

South Korean economy grows by 5% YoY in 2007

According to South Korea's central bank, South Korean economy grew by 5% YoY in 2007 due to strong exports and solid growth of facility investments and private spending.

Mr Choi Chun sin director of the Bank of Korea's economic statistics division said that "The South Korean economy maintained solid growth last year as exports and private spending picked up.” He added that “Consumer spending is expected to grow further this year.”

According to the Bank of Korea, Korea's GDP reached USD 969.9 billion in 2007 and exports of goods, which account for nearly 40% of the economy, rose by 12% YoY in 2007.

Bank of Korea said that facility investments grew by 7.6% YoY in 2007, up from an earlier 7.5% estimate, while construction investments expanded 1.2% less than an earlier estimate of a 1.6% gain. Private spending, one of the main growth engines of the Korean economy, advanced 4.5% YoY in 2007

Bank of Korea also forecast that the Korean economy will likely expand 4.7% in 2008 due to solid exports and private spending amid global uncertainties.

Japanese scrap average price up

During the third week of March 2008, Japanese H2 scrap steel average price was at JPY 49,875 per tonne in Kanto, middle part and Kansai regions up by JPY 2,378 per tonne than last week.

The report added that H2 scrap steel price was JPY 51,017 per tonne in Kanto region, up by JPY 1,067 per tonne than last week; JPY 48,940 per tonne in middle part, up by JPY 2,400 per tonne; JPY 49,667 per tonne in Kansai region up by JPY 3,667 per tonne.

At the same time, Japanese H2 scrap average price was JPY 50,118 per tonne increasing by JPY 2,091 per tonne than last week.

(Sourced from YIEH)

New tin investment products launched

Dow Jones Commodity Indexes has launched sub indexes for platinum, lead and tin. The metals are not included in Dow Jones' main benchmark commodity index because not enough is produced globally or traded on exchanges.

The indexes have been licensed to ETF Securities Ltd, a London based provider of exchange traded commodities.

About USD 155 billion was invested in long only funds and products tracking commodity indexes at the end of 2007, of which USD 42 billion is invested in the benchmark Dow Jone -AIG Commodity Index of 19 futures.

The other main commodity indexes are the Standard and Poors’ Goldman Sachs Commodity Index and the Rogers International Commodity Index. The S&P GSCI also does not include tin, while the RICI has a 1% tin weighting. An estimated USD 30 billion has flowed into commodity indexes so far in 2008, as investors have diversified their portfolios away from equities.

Sub prime crisis can fuel commodity bubble – UNDP

Mr Kemal Dervis administrator of the United Nations Development Program last week said that the liquidity boost and various macro economic measures being adopted to fight the sub prime crisis, which has sent stock and bond markets on tenterhooks across the world, can soon fuel a commodity bubble.

Mr Dervis said that "I will not be surprised that 2 to 3 years from now, we realize that the liquidity and macro boost generated to fight the sub prime housing crisis ended up fuelling a commodity bubble. We may again be faced with fighting the negative consequences of an unforeseen downward adjustment, this time in commodity prices."

He was also critical of strong expansionist US macro policy response to crisis situations saying such policies carry dangers of inflation. He said that strong US macro policy responses have led to one asset bubble being replaced by another.

He said that "It may well be the commodities, which are now rising in price at an unreasonable and unsustainable rate." He added that this is fuelled again by underlying huge investment resources and accompanying liquidity available in Asia because of high savings rate, in the Middle East because of the oil bonanza and in the advanced economies because of significant rise in the share of profits and high incomes in GDP.

Samsung Heavy wins USD 1.3 billion ship order

Yonhap reported that Samsung Heavy Industries Co has won a deal valued at KRW 1.35 trillion (USD 1.3 billion) to build two drill ships.

Samsung Heavy Industries in a regulatory filing that the deal with an American company calls on Samsung Heavy to deliver the vessels, used for deep water oil exploration, by July 2011.

Shipyards in South Korea, the world's largest shipbuilding nation, have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world.

Massey mine cited for 2007 fatal accident

AP reported that Massey Energy Co is facing fines for safety violations that state inspectors say contributed to a fatal accident at a West Virginia coal mine. The office of Miners' Health Safety and Training cited the Richmond company for violations investigators say contributed to Dixie in West Virginia resident Mr David Neal's death.

Mr Neal suffered critical injuries after falling about 39 feet from a conveyer belt at Massey's Stockton mine in Kanawha County on December 4th 2007. He died 10 days later.

Inspector Clarence Dishmon said that Massey was cited because an alarm designed to sound when the belt starts was broken and Mr Neal wasn't using a safety harness. Massey also was cited because the power to the belt wasn't turned off and because there was no way for a non electrician to shut it off.

State regulations require miners to make that impossible whenever a person is repairing a conveyer. But investigators found that Neal and his co-worker didn't take any of several steps to make sure the power was off and the belt was locked in place.

Massey had no immediate comment.

Price of old vessels soars to USD 750 LTD in Pakistan

Daily Times reported that in Pakistan the prices of scrap producing breakable ships surged sharply by USD 250 per light displacement tonnage to reach at record level of USD 750 LTD in the international market during the last two weeks, hampering the working pace of the local industry.

Ship breakers attributed the higher prices of breakable ships to the increasing demand of the steel coupled with the high fuel oil in the prices during the last three months.

Mr Azam Malik president of Pakistan Ship breakers’ Association told Daily Times that the purchase of the old breakable ships have been stopped in the country by the local ship breakers due to higher prices of ships’ selling companies.

He added that the ship breaking activities have seen a decreasing trend in the country despite high local demand of steel scraps and billets. He also said that if more ships were not purchased by the next month, a large number of daily wagers would be unemployed. Presently, around 5,000 workers are earning their livelihood at Gaddani. He further told that the supply of scrap to local steel re rolling mills has witnessed decline, owing to the lack of scrap steel supplied by ship breaking industry.

Mr Malik said that the country’s ship breakers are now waiting for expected prices decline in the global market so they could buy required number of ships to meet the local demand.

Ship breakers have set the target to produce around 500,000 LTD steel scraps by the end of the years to cope with the local demand of one million LTD scrap steel in the country.

Turkey and EU agree on site for start of Nabucco pipeline

Reuter reported that Turkey and the European Union have agreed on a site near Ankara for the start of the Nabucco pipeline, planned to carry natural gas to Europe. Construction is expected to begin in 2010 and gas is expected to begin flowing by 2013.


High level Turkish Energy Ministry official said the EU will provide financial support for the planned site near Ankara at Ahiboz. Gas supplies for the project have thus far only been secured in Azerbaijan. The European Union’s support, including financial support, will help build the physical infrastructure that will turn Ahiboz into an energy hub.

Apart from the Nabucco project, Turkey has also said it wants to export gas to third countries. The official did not specify how large the EU’s financial support would be.

The EUR 4.6 billion Nabucco pipeline is expected to carry 21 billion cubic meters of natural gas annually from the Caspian region to European consumers in order to lessen Europe’s dependence on Russian gas.

Dubai begins work on water reservoirs

It is reported that Dubai has begun building what will become the world's largest pre-stressed concrete drinking water reservoirs as the emirate attempts to cope with skyrocketing water consumption.

The USD 168.6 million projects is made up of three reservoirs, each with a capacity of 60 million gallons, almost twice the capacity of the Earl Thomas Reservoir in San Diego, US, the current world record holder with a capacity of 35 million gallons.

The reservoirs will be located in the Mushrif area of Dubai and will cover a total area of approximately 16.5 hectares. The project is being built by UAE construction firm the Mammut Group and the Max Boegel Group of Germany. Mammut said construction of the reservoirs was expected to take 15 months.

The reservoirs are part of a AED 12 billion package of infrastructure projects recently unveiled by Dubai Water and Electricity Authority designed to meet the water and electricity demands of all existing and planned projects in the emirate. According to Dewa, Dubai currently has a water capacity of 262 million gallons a day, which is due to rise to nearly 800 million gallons a day by 2015.

DP World to boost China port capacity by 30%

Khaleej Times reported that DP World Ltd, the Dubai controlled port operator aims to boost its container handling capacity in China 30% in 2008 because of the country’s surging trade growth.

Mr Kris Chang MD of DP World China DP World Ltd plans to add four container berths in Qingdao, eastern China, and a second venture in the northern port of Tianjin. DP World had a capacity of 10 million cargo boxes in China and Hong Kong at the end of 2007.

Mr said Chang “We’re still a newcomer in China and we will continue to expand our portfolio here. He said DP World aims to boost its global capacity to 90 million twenty foot boxes by 2017 from 48 million in 2007 through a combination of new ventures and expansion at existing ports.

He added that the company handled 43.3 million boxes in 2007 at its 42 terminals worldwide up by 18% YoY. It aims to have 56 terminals in 27 countries by 2017. New projects include plans in Peru, Qatar, Egypt, Turkey and Vietnam.

DP World raised USD 4.96 billion in the Middle East’s largest initial share sale last year to fund expansion plans, as Dubai aims to become a global transport hub for Asia, Europe and Africa. The company plans to add facilities in China after the country’s exports surged 26% in 2007.

Minimum wages for Indians in Gulf countries

Mr Vayalar Ravi in a written reply to a question in Indian parliament said that minimum wages for workers have not been prescribed by the local laws in the Gulf countries and the wages are determined by the contracts between the employer and the worker.

Mr Ravi said that however for effective protection and welfare of women emigrants, Government of India has decided to ensure a minimum wages since they are in the most vulnerable category. The minimum wage are fixed by the Indian Missions concerned in the range of USD 300 to USD 350 per months after taking into account the prevailing market wage in that country.

As per reports received from the Indian Missions in the Gulf countries, the following is the approximate break up of men and women working there.

No separate data on skilled and unskilled workers is available with the Missions. However, the Missions in Saudi Arabia and UAE have reported that as per rough estimates 80% and 65% of the workers respectively are blue collared workers, whereas the Mission in Qatar has reported that approximately 65 to 70% are unskilled and semi skilled workers.

Gulf Extrusions to award aluminum plant contract in June 2008

It is reported that the USD 32 million contracts for Phase One of Gulf Extrusions' new aluminum plant in Qatar is expected to be awarded in June 2008. Construction of the new plant is part of an expansion plan to double the company's production to 100,000 tonnes within the next six years.

Mr Modar Al Mekdad general manager of Gulf Extrusions said "The new facility has been strategically located to cater to high growth markets, particularly Qatar, the UAE, Kuwait and Saudi Arabia. We will award the construction package in June."

As per report the new facility will be located near the Qatalum aluminum smelter in Mesaieed and is expected to be operational by mid 2009. Qatar's United Development Company is the consultant on the project.

The second phase of the project will involve the construction of another 10,000 tonne facility.

Nearly 70% of Gulf Extrusions' production is supplied to the domestic market to support the enormous construction projects in the UAE. The rest is exported to South East Asia, other GCC countries, Europe and Canada.

Hyundai E&C wins USD 301 million orders in Qatar

South Korean builder Hyundai Engineering & Construction Co announced that it has won a combined USD 301 million in orders to build substations and power cables in Qatar.

Hyundai said in a statement that it would construct seven substations in 30 months and lay the power cables in 23 months.

The company said it had won a combined USD 1.5 billion in overseas orders so far this year.

AvtoKraz gets approval for dumpers in GCC

It is reported that Ukrainian auto major AvtoKrAZ has successfully completed the certification of the dump truck KrAZ-65055 (6x4) in Saudi Arabia.

This truck with payload of 20 tonnes is equipped with dump platform with capacity of 12 meter cube and represents one of the most in demand models of dump trucks on the market of the Kingdom of Saudi Arabia.

The certification has been carried out by Standardization Organization for the Cooperation Council for the Arab States of the Gulf. The Standardization Organization issued the conformity certificate stating the compliance of the truck KrAZ to the required standards.

The delivered certificate enables Holding Company AvtoKrAZ to export the trucks KrAZ in the countries members of Cooperation Council for the Arab States of the Gulf and to operate them on the general purpose roads.

Expansion plans for water projects in Saudi Arabia

ArabianBusiness.com reported that Saudi Arabia is set to expand the privatization of its desalination and wastewater treatment sector to cover more cities in the country. The move follows the creation of the National Water Company earlier this year to oversee the privatization process which aims to improve water services in Saudi Arabia and save dwindling supplies.

The report added that the company will initially target the privatization of water projects in four cities, including Jeddah, Madinah and Riyadh.

Mr HE Loay Al-Musallam head of privatization team and deputy minister of planning and development, Ministry of Water & Electricity said "Within the next three years, we hope to cover most major cities in Saudi Arabia. I'm confident that we can create a leading water utilities service in the region."

Mr Al-Musallam added that desalination and wastewater treatment projects are implemented either as a build operate transfer or private-public partnership. He said that "Having both schemes gives us the ability to attract different types of bidders. We issue a management contract for the distribution of water and wastewater collection, one for construction of the plant and another for the sales promotion.”

He added that "The way in which we have built these contracts gives us the confidence that our targets will be met in collaboration with the private sector."

The process of privatizing Saudi Arabia's water projects began in November 2005, when a consortium of Saudi and Malaysian companies was awarded a USD 2.4 billion contract to build the Shuaiba 3 desalination plant.

Cicek Shipyard starts building Supramax bulk carrier

Marinelog reported that Turkish Cicek Shipyard has begun construction of the first of three 58,000 DWT Supramax bulk carriers for Bayraktar Shipping Group. The carriers will be constructed in the shipbuilder's Panamax sized building dock, which is currently being extended to 215 meters and when completed will be 250 meter long.

Mr Berke Cicek VP of Cicek Shipyard said hat "It was impossible for a private Turkish shipyard to build a 15,000 DWT vessel when we started our expansion plan but the outlook for building supramaxes and capesizes in Turkey now looks very promising."

It may be noted that Cicek Shipyard started construction of the building dock at its Tuzla Bay facility in 1999, but lack of government support resulted in its not being completed until 2006. It is served by a 300 tonne gantry crane and has already been used to construct four IMO II chemical tankers. Three of these were ice class 1A vessels for Besiktas Shipping, the 18,000 DWT Besiktas England and Besiktas Scotland, and the 26,000DWT Besiktas Jutland, while the fourth is a 20,000 DWT tanker currently under construction for the Kaptanoglu Group. The yard also has a 160 meter long slipway served by a 200 tonne gantry crane and a smaller slipway suitable for building coastal vessels.

In addition to the 58,000 DWT Supramax bulk carriers, Cicek has contracts for two 1,300 TEU containerships, also for Bayraktar, that are due to be launched in April and August 2008, two 24,000 DWT bulk carriers for a foreign shipping company, one for delivery in 2009 and the other in the first half of 2010 and four 3,150 DWT IMO II chemical tankers for delivery in 2008.

Turkish firm to build 90 bridges in Turkmenistan

Anatolia News Agency reported that Turkish construction company Net Yapı has won the tender to construct 90 bridges in Turkmenistan.

The bridges, which in total will cost nearly USD 287.5 million to build, have to be completed by March 2010. All bridges will be constructed over the Türkmenbaşı Atamurat highway.

New Iraq deals to spur oil output

It is reported that the Iraqi government is expected to pay as much as USD 2.5 billion to five top oil companies to increase the country's oil output by nearly a quarter.

Mr Thamir Ghadhban oil minister of Iraq said he expects the contracts to be signed by early next month. He said “There is a rough estimate that it could cost about USD 400 million to USD 500 million per field. So a total could be up to between USD 2 billion and USD 2.5 billion over two years that should be paid by the government to companies.”

Mr Ghadhban said Iraqi representatives met with company officials last week in Amman, Jordan, to discuss final details of the contracts, including whether payment would be by cash or by oil. He said “As far as we are concerned, everything is positive and it is a matter of time for the minister of oil and oil companies to finalize and shake hands.”

Shell is negotiating for the northern Kirkuk oilfield and is also in talks, along with BHP Billiton, for the development of the Maysan fields.

Leases of irregular mines being cancelled in Pakistan

Business Recorder quoted Mr Makhdoom Afqar ul Hassan Punjab Minister for Mines and Minerals as saying that leases of irregular mines are being cancelled and notices have been served to the mine owners through out the province so that they could regularize their mines according to prescribed rules and regulations.

Mr Hassan said that owners were given a chance to regularize their mines and failing to such would be faced action and their leases could be cancelled.

He directed the authorities concerned to monitor the functions of mines regularly and submit a report in this regard. The minister said a complete data bank was being established of mining areas so that interested parties could get comprehensive information.

New oil and gas discovery in NWFP

It is reported that MOL Pakistan Oil & Gas Co has made a new discovery of oil and gas in the TAL block which is located in the North West Frontier Province.

Following the completion of seismic acquisition and its interpretation resulting in an attractive geological prospect, the joint venture resolved to drill an exploratory well, Mamikhel-1 in fourth quarter 2006.

MOL Pakistan having a 10% working interest and as operator of TAL joint venture has been operating this block since 1999 with four other Pakistani companies i.e. OGDCL, PPL, POL and GHPL. The pre discovery working interest of the joint venture companies is MOL with 10%, OGDC 30%, PPL 30%, POL 25% and GHPL 5%.

Chinese plate export prices cross USD 1000 FOB

It is reported that this week, export offers for Chinese steel products continue to move up despite flat or softening domestic prices.

Chinese steel makers have shoot up steel plate export price again on better overseas demand. The latest transaction price has exceeded USD 1000 per tonne FOB.

Domestic prices are largely unchanged this week. On Shanghai market, commercial 16mm plate by Yingkou Steel is being offered at CNY 6000 per tonne to CNY 6020 per tonne, 40mm low alloyed plate at CNY 6600 per tonne. By comparison, commodity grade 16mm plate by tier two steel makers are at CNY 5650 per tonne.

Export offer for commodity grade 15mm to 40mm plate has jumped to USD 1020 per tonne FOB to USD 1030 per tonne FOB a jump of USD 50 per tonne to USD 60 per tonne from early last week.

Tianjin Steel told Mysteel that it has been fully booked for April production and base price averages at USD 970 per tonne to USD 980 per tonne FOB. It normally sets unified export price every month while some steel mills just negotiate business case by case. In order to keep up with market pace, it has decided to wait for 2 to 3 weeks before setting quotations for May production.

China may further tighten steel exports when rebound occurs

Interfax China reported that China is likely to impose further controls on steel exports if they rebound, which will result in a decline in Chinese steel exports over the whole year.

Mr Luo Bingsheng executive vice chairman of the China Iron and Steel Association at the Sixth International Steel Market and Trade Conference said that "However, demand for Chinese steel from emerging economies will remain high in the foreseeable future as their infrastructure lags behind their domestic demands."

The Chinese government released a new export tax policy on January 1st 2008 increasing its export tax on low value added products in an attempt to curb rapidly increasing exports of highly polluting and high energy consuming products. The export tax on both steel billet and coke was raised from 15% to 25%.

According to China's General Administration of Customs said China's steel product exports slumped 24.88% MoM to 3.11 million tonnes in February. For the first two months of this year, steel product exports fell 17.2% to 7.25 million when compared to the same period last year. Steel billet exports came to 80,000 tonnes for the first two months down by 92.6% on an annual basis, while exports for February alone were zero.

2008 likely to be most difficult for Chinese economy-Premier

Xinhua cited Mr Wen Jiabao Premier of China as saying that the year 2008 may be the most difficult year for Chinese economy, largely due to growing uncertainties both inside and outside the country.

Mr Wen at a press conference following the annual full session of China's top legislature last eek said that "It will be harder to make decisions. He said we have set 'two prevents' when mapping out this year's economic policies. The first is to prevent the fast-growing economy from being overheated, so that we can better address problems surfacing from the economic growth. However, China is a developing country with a population of 1.3 billion which demands us to keep the economy at an appropriate growth rate to confront the employment pressure."

Mr Wen said the problems that emerge on the way ahead shall be resolved through development. He said that "We must strike a balance between economic development and inflation control. Now we have set our 2008 goal for economic growth at 8% and a target of CPI rise at about 4.8% showing that we are trying to hit a balance. He added that "I know it's a tough task."

Mr Wen said "We shall keep a close eye on economic changes and trends, take timely and flexible responding measures, and have a good command of the pace, direction and intensity of macro control measures to ensure a steady and fast economic development, employment of about10 million people and also effective inflation control He said we shall not sheer away from the difficulties and shall face up to the responsibilities to carry our development cause forward."

Chinese CR export prices continue to move up

It is reported that this week, export offers for Chinese steel products continue to move up despite flat or softening domestic prices.

Export quotation for Chinese cold rolled steel coil price has advanced substantially early this week due to surge in overseas market prices. Steel producers are still upbeat on future despite softening in home market

According to traders Offers for 1.0mm cold rolled steel coils are prevailing at USD 950 per tonne to USD 960 per tonne FOB a jump of USD 30 per tonne to USD 40 per tonne from last week. Supply are said to be quite tight and it is very difficult to get allocation even at the updated levels

Export prices seem to be on an upward trend and there is strong likelihood that there would be another increase of USD 100 per tonne in next one or two months, driven by the strength of international market prices and higher domestic level

Shougang first phase targets 9.7 million tonnes per year

It is reported that Shougang’s Caofeidian based Shougang Jingtang Iron and Steel Plant has quickened its pace of construction. The first phase will have a design steel output of 9.7 million tonnes and be completed at the end of 2010. It is slated to start production in October 2008 with a capacity of 4.85 million tonnes per year.

Shougang’s No 3 Steelmaking Plant has totally produced 24.93 million tonnes of converter steel since it started operations in 1970. In particular, the plant has increased its output by 200,000 tonnes year by year since 1997 until hitting two million tons mark.

In January 2008, Shougang decided to conduct an overall updating project at the old converter site and build two 120 tonne top bottom blowing converters, two six high six strand slab continuous casting machines, one desulphurization station for molten iron, one LF refining furnace and other assistant facilities within three years. It also plans to dismantle No 4 converter and No 4 continuous casting machine in July 2008.

Iron ore price negotiations – Chinese mills eying overseas investment and mergers

Mr Zhang Xiaogang the president of Anshan Steel recently said we need to increase iron and steel capacity, as well as a great volume of mineral resources. However, current mineral resources could only satisfy about half of the demand from China’s iron and steel industry. He said. “Consequently, China is now strengthening the prospecting and exploiting of mineral resources in China. At the same time, many Chinese enterprises are searching for mineral resources in international market in order to enlarge raw materials supply.”

Mr Xiaogang said that the merger and the increase of industrial centralization is a necessary phase of the sustainable development of Chinese iron and steel industry, but every steel enterprise has different views on the schedule. He believed that, however, the aim could cone true and the consolidation of Chinese iron and steel industry should be accelerated in the coming three to five years.

Steep Chinese Steel prices may deter steel export

It is reported that Chinese steel prices have been perching over a high track recently and the steep price might dampen the export demand and lead to steel shipment decline to other countries. Meanwhile, the accelerating domestic steel capacity installation could tip the domestic market fundamental into over supply and increase the price volatility downward in days to come.

Mr Wu Xichun senior advisor to China Iron & Steel Association at a recent industrial conference said that soaring steel prices in the first two months of this year has pushed up the Producer Price Index by 6.6% in February 2008. As a result, Beijing is set to step up efforts in restraining rampant steel price rally.

He said "Ballooning domestic steel price has come against the backdrop of robust demand and moderating steel output growth during January to February. The movement of balance between supply and demand, including production growth pace, import and export volume would be the major factor determining the steel price in April.”

Mr Wu said that domestic steel prices now have close tie with global prices, and global steel prices are stepping into a high level bolstered by booming demand, weakening US dollar and tight supply of resources.

Current steel price has already exhausted the push from escalating input costs. And the market demand has been exaggerated by steel traders who are piling up materials in anticipation for further price hike.

(Sourced from MySteel.net)

Benxi Steel HR galvanized sheet adopted by Huachen Group

It is reported that recently, the first coil of 4 tonnes plus weight HR galvanized sheet for auto surface panel which is produced by Bengang Group has been adopted by Shenyang Huachen Automobile Group as raw material to make Zhonghua Brand cars to be exported to Europe soon.

Almost all foreign automakers have accepted this material because it boasts stronger anti corrosive property than cold rolled auto surface panel despite a higher production cost. Based on this fact, Benxi Steel made a strategic decision on the development of HR galvanized auto surface panel in September 2007.

The first coil of 4 tonne plus weight HR galvanized sheet for auto surface panel has been adopted by Shenyang Huachen Automobile Group as raw material to make Zhonghua Brand cars to be exported to Europe soon.

Almost all foreign automakers have accepted this material because it boasts stronger anti corrosive property than cold rolled auto surface panel despite a higher production cost. Based on this fact, Benxi Steel made a strategic decision on the development of HR galvanized auto surface panel last September.

Laigang outstanding achievement increased by 48% in 2007

It is reported that in 2007, Laigang realized operating income of CNY 32.926 billion, the total profit of CNY 1.577 billion, the net profit vested in parent company reached CNY 1.14 billion up by 22.01% YoY, 34.94% YoY, 48.11% YoY respectively.

Laiwu Steel expressed that the total production of pig iron in 2007 was 5.35 million tonnes, steel was 5.76 million tonnes, and billet material was 6.91 million tonnes. The operating plan and goal in 2008 is to produce pig iron 5.64 million tonnes, steel 6.25 million tonnes, billet material 7.38 million tonnes and to achieve sales revenue CNY 34 billion, the total cost of CNY 32.54 billion.

Laiwu Steel also expressed that in 2008, it will accelerate the strategic adjustment of the product structure, continue to play the role of H-beam guiding the market. It will make effort to construct H-beam, excellent special steel production bases and bar production base.

Phase 3 of steel wire project of Baori Steel starts construction

It is reported that after equipment import contract signed, phase III of steel wire project of Baori Steel is ready for the construction now.

Phase III construction is the emphasis of the job in Baori Steel in this year. Besides five sets of annealing ovens and a pickling line, it is realized that other equipment such as drawing machine is manufactured in China. At present, both commercial negotiation and contract signing on all equipment have been completed.

In order to complete the construction and to start the trial production in this year, all jobs including production preparation, technology upgrade have already overall started, including training of special personnel specialized in management, technology and distribution. Moreover, the program of products outline and market and consumer research are in order now.

Minmetals to provide Baosteel with 36,000 tonnes of FeCr

China Minmetals Group announced on March 14th 2008 that the company had officially signed long term contract with Baosteel, concerning that Minmetals will supply 36,000 tonnes of ferrochrome every year to Baosteel with 3 years to 5 years.

Analysts said the contract achieved the efficient combination between the supply capacity of Minmetals and Baosteel’s demand for resources, pioneering a new way of the cooperation between central enterprises.

China doubles 2010 wind power capacity target

Interfax China reported that China's National Development and Reform Commission released its renewable energy development plan for the 2006 to 2010 period in which it doubled its prior wind power generating capacity target for 2010.

According to the plan, by 2010 China will have a total wind power generating capacity of 10,000 megawatts. In the renewable energy development plan for the 2006 to 2020 periods it released last year, the target for 2010 was set at just 5,000 megawatts.

Mr Shi Pengfei vice director of Chinese Wind Energy Association told Interfax that the CEC figure includes only wind farms which have been hooked up to power grids. He said he was also optimistic that the country would be able to hit its new 2010 target.

Mr Shi said "The government hopes that non hydropower renewable energy projects can contribute 40 million megawatt hours of electricity of the country's total electricity generation in 2010. As biomass power capacity is growing relatively slowly, wind power will have to reach about 20,000 megawatts in order to hit that target."

Mr Shi said when asked by Interfax to what extent that target might change, he was not privy to internal decisions in the NDRC, but that China's plan to see 200 million megawatt hours of electricity generated by non hydropower renewable energy projects by 2020 would indicate a need for roughly 100,000 megawatts of wind power capacity by that time.

The new plan also said that by 2010 the country will see around 30 large wind farms built and five large wind power bases built. The country will also begin preparations to build an extremely large wind power base with over 10,000 megawatts of installed capacity in northwestern China's Gansu Province, one in the northern Inner Mongolia Autonomous Region and one offshore base near the eastern coastal province of Jiangsu and its neighboring municipality, Shanghai.

In addition, to ensure that the ambitious targets can be met, the NDRC also said it wants to see domestic wind turbine manufacturing capacity reach 5,000 megawatts by 2010, and enough components for turbines to generate 8,000 megawatts. Furthermore, the government is pushing the industry to be able to manufacture wind turbines with a capacity above 1.5 megawatts, and will start to develop 3 megawatt offshore wind turbines.

China Direct launches aluminum recycling project in China

Interfax China reported that China Direct Inc, a US company with controlling stakes in a diverse portfolio of Chinese companies, will construct an aluminum recycling facility in China.

CDI will inject USD 352,000 into the facility, which will be run by a newly established venture, CDI Metal Recycling Co Ltd CDI Shanghai Management Co. Ltd, another wholly owned CDI subsidiary, will control an 83.3% interest in the new venture. The 1,000 tonnes per annum recycling capacity facility, which will use a mechanical crushing method that reduces losses associated with traditional heating methods, will primarily recycle aluminum wire to create aluminum powder.

Production at the facility is scheduled to begin in the second quarter this year, and the company intends to expand its capacity to 5,000 tonnes per annum by June 2009. The company did not reveal where the plant would be located in its statement, and officials were not available for comment when contacted by Interfax.

The company said that it believes recycling will become a strong growth driver worldwide as natural resources continue to deplete.

TMK to buy IPSCO US tubular business from Evraz

OAO TMK and its affiliates announced last week that they have entered into a definitive agreement with Evraz Group SA, whereas TMK will acquire from Evraz the US companies and assets of IPSCO Tubular’s business in conjunction with Evraz’s acquisition of the Business from SSAB.

According to the agreement, TMK will acquire 100% of IPSCO Tubulars Inc and 51% of NS Group Inc for approximately USD 1.2 billion. TMK and Evraz have also entered into a call / put option for the remaining 49% of NS Group Inc which will be exercisable in 2009 for approximately USD 0.5 billion subject to certain adjustments. The closing of the transaction will be subject to customary regulatory approvals and closing conditions.

Mr Konstantin Semerikov CEO of TMK’s said “The acquisition of IPSCO Tubular’s US assets is the latest step in the execution of TMK’s strategic emphasis on further bolstering our offering in the oil and gas sectors, while expanding our geographic footprint. The transaction marks the entry of TMK, one of the world’s largest steel pipe and tube makers into the North American market, the world’s biggest market for OCTG and line pipe. The transaction also broadens TMK’s product mix with significant position in higher value-added products.”

UBS Securities LLC is acting as exclusive financial advisor to TMK. Gibson, Dunn & Crutcher is acting as legal counsel to TMK.

Mr Potanin and Mr Prokhorov not to liquidate KM-Invest

Reuters reported that Mr Vladimir Potanin and Mr Mikhail Prokhorov agreed last week not to liquidate the KM-Invest firm managing their joint assets.

KM-Invest gave no details of the agreement, adding that the company's shareholders also agreed on a unified approach on voting with packages of Polyus Gold and Norilsk Nickel shares at emergency shareholders' meetings.

Mr Potanin and Mr Prokhorov had been in a complex process of dividing their jointly owned assets and their decision not to liquidate the asset management firm may indicate they have reached some kind of agreement.

A Russian arbitration court earlier blocked the sale of the assets managed by KM-Invest, including 2% in metals giant Norilsk Nickel and 7.4% in the country's top gold producer Polyus Gold, at Mr Prokhorov's request.

USW approves Severstal acquisition of Sparrows Point Mill

Mr Leo W Gerard president of the United Steelworkers confirmed the union's initial approval of Russia's Severstal North America Inc acquisition of the Sparrows Point steel mill in Baltimore, where the union represents 2,200 steelworkers.

Mr Gerard said "Negotiations with both the seller and the new buyer of the Sparrows Point steel mill are completed. The Severstal deal demonstrates the USW and its members are the critical players in the continuing consolidation and revitalization of North America's steel industry for those who want access to our hemispheric market. USW-represented steelworkers are world class partners for the economic future."

Mr David McCall Chairman of the USW bargaining committee for ArcelorMittal in North America said "In the search for a buyer, following the unraveling of a previous proposed deal last December, we have always maintained that the union will not reach agreement with a successor unless it includes a long term business and operational strategy that produces security for our members, their families and our retirees. We now have that at Severstal."

Mr David McCall declared that "SNA has the capital assets to compete globally and a commitment to the steelworkers at Sparrows Point that assures a great future in making steel for the North American market."

Mr John Cirri president of USW Local 9477 representing workers at Sparrows Point wrote an email message to the union members saying that "The many months of uncertainty on who will be our third new owner are finally over. Severstal North America has agreed to purchase Sparrows Point for USD 810 million. He added the protections and provisions provided under the USW collective bargaining agreement with ArcelorMittal remain intact. We believe that the date Severstal officially takes control will be in about 60 days."

ArcelorMittal's Sparrows Point is being sold by Mr Joseph G Krauss, Divestiture Trustee as required by a federal district court to settle a complaint filed by the US Department of Justice following the merger agreement between Mittal Steel and Arcelor SA in 2006.

OMK starts cold trials for furnaces at Liteyno

It is reported that OMK’s Liteyno plant has started cold trials for its ne electric furnaces, which will continue till March 2008 end

The new furnaces are being setup by a Turkish company GAMA Endustri in conjunction with specialists’ Italian company Danieli, which is the main supplier of equipment.

As per report construction work was launched on June 11th 2005 and the total investment in the project OMC more than 600 million dollar.

LPK will produce 1.2 million tonnes of hot rolled coils in thickness range of 1 mm to 12.7 and feed OMK’s pipe plants including VMZ and Almetyevsk works.

Gazprom to start coalbed methane project in Kemerovo

It is reported that the city of Kemerovo hosted a meeting dedicated to the issues regarding the execution of the pilot coal bed methane production project. The meeting was co chaired by Mr Aman Tuleev, Governor of the Kemerovo Oblast and Mr Alexander Ananenkov Deputy Chairman of the Gazprom Management Committee.

While opening the meeting Mr Alexander Ananenkov mentioned that the existing global practice enables to consider cabled methane production as a significant supplement to Gazprom’s resources. Mr Alexander Ananenkov said ”The task we are facing demands not only implementing one of the largest innovation projects on the pilot methane coal bed production, but also creating a new segment of gas industry to become an essential element of Gazprom’s production complex. Commercial introduction of Russian coal bed methane production technologies will minimize accidents at coal mines and considerably improve the ecological situation.”

The participants addressed the implementation progress of the pilot coal bed methane production project and planned the high priority activities to be performed within the project during 2008 to 2009.

The meeting resulted in signing a joint protocol. The significance of the project support by the government is particularly highlighted in the protocol. Among the primary measures proposed to be taken in this direction was including coal bed methane in the industrial classification system, reduction or annihilation of customs duties for the entry of equipment and materials having no domestic analogues and needed for the execution of the project as well as support in issues related to land and subsurface use as well as energy supply. In this context the Kemerovo Oblast Administration will introduce several changes and supplements in the subsurface use laws aimed at solving issues relevant to the legal basis provision for coal bed methane production.

The decision was taken to offer the Gubkin Russian State University of Oil and Gas to start development and training of specialists in non conventional gas production.

Russia and Egypt discuss Gazprom entry in Egypt projects

Reuters reported that senior officials from Russia and Egypt on recently discussed the entry of Russian natural gas export monopoly Gazprom into energy projects in Egypt,

Mr Rachid Mohamed Rachid Egyptian Trade and Industry minister said "One of our important points is cooperation in energy, now oil and gas. Novatek and LUKOIL are already working here. We were discussing how to have Gazprom start cooperation in Egypt also."

Mr Rachid spoke by telephone from Cairo after talks with Mr Viktor Khristenko Energy Minister of Russia. He declined to give details on a possible deal with Gazprom.

ArcelorMittal visits Kuzbass

It is reported that Mr Aman Tuleyev head of Kuzbass met with Mr S Maheshwari executive VP of ArcelorMittal and Mr Narendra Choudhary VP of ArcelorMittal along with Mr Deniskin Novel GD of JSC Severstal-Resurs.

As per report, the possibilities of participation of ArcelorMittal in coal company Kuzbassugol, belonging to the company JSC Severstal-resource, were discussed.

Mr Aman Tuleyev said that the priority for the new owner should be the task of security in the mines, raise wages, the environment, social security for miners and their families, as well as deep coal acquired by the company.

DMKD equity issue is on the way

Millennium Capital reported that AGM the shareholders of Dniprovskiy Steelworks voted for a 144% charter fund increase and approved 2007 financials.

The capital increase will be exercised through the additional issue of 4 billion new ordinary shares at USD 0.05 par value. The subscription will take place in two stages from May 12 till May 30th 2008 and from May 31st till December 5th 2008 respectively with an ex rights date of May 12th 2008.

In 2007 DMKD increased net sales by 37% YoY to USD 1.565 billion and net income by 20% YoY to USD 0.107 billion slightly over performing our latest forecasts. Shareholders decided not to allot profit but direct it to finance an announced 2008 USD 750 million CAPEX program.

Zaliv Shipyard starts building ship for Ulstein Hull

Ukrainian Journal Staff reported that Kerch based Zaliv Shipyard has started building a hull for an offshore ship to service drilling platforms for Norway's Ulstein Hull AS shipbuilding holding.

The sum of the contract, which was signed in the spring 2007, is not disclosed. The order will be completed in October 2008.

UES and Kemerovo ink pact for developing energy system

It is reported that Mr Anatoly Chubais Chairman of the Management Board of UES and Mr Aman Tuleyev Kemerovo Region Governor have signed a Cooperation Agreement designed to develop the Tomsk Region's energy system and ensure reliable power supply to customers. The Agreement will remain in effect until 2013.

According to social and economic development forecasts, electricity consumption will grow 1.23 to 1.41 fold by 2015 to 44 billion kWh or 50.2 billion kWh from 35.6 billion kWh in 2007. According to the forecast, coal industry, ferrous metal industries, machine building and metal working industries will develop most rapidly. These power intensive projects will be the key drivers behind the growing demand for additional power generation and transmission capacity.

To meet the energy needs and ensure reliable electricity supply to customers, it is planned to significantly increase the installed capacity of the Kemerovo Region's power plants. To meet these targets, OAO "Kuzbassenergo" will bring on line a new power 660 MW units at the Tom-Usinskaya TPP and a 120 MW turbine unit at the Novo-Kemerovskaya CHPP. The company will also modernize more than 330 MW of its existing capacity. Over 2,340 MW of generation capacity is planned to be built with private investors' funds.

The Agreement provides for the construction and modernization of the region's power grid infrastructure. In the regions bulk transmission grids sector, it is planned that 742 kilometer of transmission lines will be put into operation. As a result of the new construction of high voltage substations their capacity will grow by 2,582 MVA. Among the major projects to be implemented is the construction of the 550 kV "Kuzbasskaya substation with 500 kV and 220 kV lines and the 220 kV Olzherasskaya” substations with 220 kV lines. Grid substations with a capacity of 4,827 MVA are to be modernized.

Under the Agreement, the total amount of funds to be spent on the projects in the Kemerovo Region will be in excess of RUB 127.6 billion, of which over RUB95 billion and RUB 32.5 billion will be invested in the power generation sector and grid infrastructure, respectively.

Russia companies advancing in nano technology

Itar-Tass cited Mr Sergei Ivanov first deputy PM of Russia in the Federation Council upper house of parliament said that 5 Russian companies that have received support of their investment projects are already producing nano products.

Mr Ivanov said “This is not any ‘nano marmalade’, as critics sometimes say. For example, Severstal has already begun series production of unique alloys with the twofold enhancement of performance characteristics. They are intended for the construction of structures used in extreme conditions, in particular in the development of Arctic offshore oil and gas fields. At present, the amount of sales is about RUB 2 billion per year but it can be increased one hundred times.”

Mr Ivanov said the potential market of these products in the world is significant about 3 billion dollars a year. He said “In connection with the expansion of the use of energy saving technologies the market will grow by 2012 about twenty fold. Needs of our country by that time are estimated at over RUB 70 billion.”

He however told the parliamentarians that funds invested by private investors are insignificant so far.