Chinese mills to spur spot Indian iron ore prices

It is reported that Chinese steel mills, due to recent increase in Capesize freight from Brazil and squeeze in supplies by Australian miners, will divert their purchases to Indian spot market in coming weeks.

Most of Chinese mills are worried about their inventory levels in coming weeks.

Chinese buyers have also faced credit problems for purchase of iron ore from spot market during recent weeks, which has helped in softening ocean freight in India to China route. But at the same time, can have negative implications for steel mills in terms of lower inventories in the near future as very few transactions are taking place at present. Buyers also risk an increase in spot iron ore price again as and when the Credit availability improves for spot iron ore importers.

Whereas Panamax freight in Australia to China route is stable and have witnessed fewer bookings, among Chinese steelmakers' worries of decreased supplies by Australian Miners in the month of April. It was widely reported that Australian miners had squeezed supplies to China in the month of March, after a trade dispute on spot iron ore shipments.

With strong steel market and supply concerns of Australian iron ore, spot market looks poised to move upward.

Mr Kamal Nath favors duty free import of steel into India

PTI reported that Mr Kamal Nath India’s commerce & industry minister said that his ministry would recommend scrapping of import duty on steel, whose rising prices have contributed to a surge in inflation rate.

He said “We are going to recommend scrapping of import duty on steel.”

Seeking to improve the supply situation in the domestic market, the Commerce and Industry Ministry withdrew export incentives given on major categories of steel.

Ispat Industries to reach 5 million tonnes in 2 years

It is reported that the shareholders of Ispat Industries Ltd approved the issue of convertible warrants to the tune of INR 509 crore to promoters of the company. Proceeds received would be used to part-fund the company’s capital investment plans that have been pegged at INR 2,292 crore.

The amount generated from the preferential allotment will be used to part fund investment plans that include
1. Setting up of a coke oven plant of 1 million tonne per annum capacity
2. Setting up of a pellet plant of the annual capacity of 4.5 million tonne per annum capacity
3. Enhancing capacity of the existing hot rolled coil plant from 3 million tonne per annum capacity to 3.6 million tonne per annum capacity.

The implementation time of all the projects has been pegged at between 12 months and 24 months from now.

Mr Vinod Mittal MD of IIL said that Ispat currently produces 3.6 million tonne steel a year and plans to take its capacity to 5 million tonne in the next two years.

He added that “We have drawn up plans internally to raise our steel capacity to 10 million tonne, which we expect to meet by 2013-14. The 10 million tonne capacity will be achieved by increasing the capacity of our Dolvi plant to 5million tonne and setting up a new plant in Jharkhand which will initially have a capacity of 2.8 million tonne, expandable to five million tonne later.”

More measures to come to cool down steel prices –Ministry

BL reported that, a day after withdrawing Duty Entitlement Pass Book Scheme benefits on steel exports, centre said that the exporters will have to do more to contain prices and it would decide on further course of action after meeting them in the next few days.

Mr RS Pandey secretary steel said that "In the next few days, the government is going to meet iron ore exporters, secondary steel producers and major steel producers. Further strategies will emerge following these meetings."

He said that more steps would have to be taken by the industry and government to contain spiraling prices of steel in India. .

Mr Pandey said that suspension of export subsidy available to steel companies under the DEPB would fetch the government about INR 600 crore and go a long way to contain prices and bridge demand supply mismatch in the sector. He added that "The Government has announced temporary withdrawal of DEPB benefits in steel products. This is aimed at disincentivising exports to some extent as lesser exports would somewhat augment availability of steel in the domestic market."

He however appreciated steelmakers for offering to exercise self restraint on steel exports. He said "In the last 3 days downtrend has been witnessed in steel ingot prices."

TATA Power eying more coal mines overseas

BS reported that TATA Power is evaluating opportunities to make another overseas acquisition of a coal mine and is planning to zero in on smaller mines. The report cited Mr Prasad Menon MD of TATA Power as saying that "We are evaluating various opportunities."

As per report, TATA Power is considering fresh acquisitions to minimize the risk from the supply of 2 million tonnes of coal from Indonesia based mines for its ultra mega power project at Mundra, whichbecome operational in 2012.

The report added that TATA Power will adopt a judicious approach while making the mine acquisition given the current surge in coal prices and the rise in valuation of coal mines.

TATA Power is implementing the 4,000 MW UMMP at Mundra through a special purpose vehicle Coastal Gujarat Power. It requires about 5 million tonnes of coal annually for the project. In April 2007, TATA Power had acquired 30% stake in two coal mines in Indonesia based PT Kaltim Prima Coal and PT Arutmin Indonesia. It will receive 3 million tonnes of coal a year from the Indonesian mines.

SC asks POSCO to approach Orissa for mines

PTI reported that Supreme Court has asked POSCO to approach Orissa government for allotting demarcated mining area for its proposed INR 51,000 crore mega steel plant.

As per report, a special environmental bench headed by chief justice Mr KG Balakrishnan asked POSCO India Private Limited to approach the state to execute lease for a captive and demarcated mine.

However, it was not convinced with POSCO's counsel Mr Mukul Rohtagi's argument that state government owned Orissa Mining Corporation had agreed to supply uninterrupted iron ore and other minerals for its 12 million tonne steel project.

Mr Rohtagi said that "There is a tie up with OMC to give raw materials. The mines are not earmarked. This way the project will take 5 years to come up. The mines which have been identified are 300 kilometer away from the project site."

Senior counsel Mr Harish Salve, who is assisting the court in the matter, said that "The POSCO's huge plant would involve a large land as it would need huge quantity of raw material."

Mr Salve cited the Vedanta Alumina case in Lanjigarh, which also faced the problem of raw material after setting up the project. Despite being commissioned, the plant was idle for the past more than 6 months due to environmental clearance for its mine.

CIL CCL makes INR 2.66 billion profit from coal e auction

IANS reported that Coal India Limited’s Central Coalfield Limited has posted a profit of INR 2.66 billion through e auction of coal in the current financial year.

Mr Deepak Kumar public relations officer of CCL said that "Through e auction our company has earned a profit of INR 2.66 billion in the current financial year till March 25th 2008. CCL sold 5.44 million tonne coal through e auction. The total profit earned till February 2008 is INR 6.10 billion. In the current financial year we are likely to earn a profit of more than INR 10 billion."

CCL had posted a profit of INR 1.4 billion through e auction in the financial year 2006-2007 and INR 1.68 billion in 2005-2006.

CCL’s total coal production figures are as under
Year Volume

In million tonnes
** 2007-08 figures are till March 25th 2008

Ahmedabad to lay pipeline for textile effluents

BL reported that, alarmed by the high level of pollution created by textile processing units located on the outskirts of Ahmedabad, city based MCT Enviro Infrastructure Limited is constructing a 78 kilometer effluent discharge pipeline up to the Gulf of Khambhat.

As per report, a special purpose vehicle called MCT Ahmedabad Textile Effluent Cluster Limited will be formed for the project in partnership with the Gujarat government.

The pipeline, to be constructed on build, own, operate and transfer basis at a cost of INR 295 crore, will be handed over to the Ahmedabad Textile Processors Association after 5 years from the date of commissioning, which is likely by June 2009. The project will witness utilization of glass reinforced plastic pipes of 1,000mm diameter with a peak load capacity of 120 million liters a day.

Mr Vinod Mittal director of MCT Enviro said that "Earlier, the capacity permitted for the effluent discharge pipeline by the Gujarat Pollution Control Board in the industrial areas of Narol and Piplaj was 30 million liters a day but textile processing units have been illegally discharging effluent at a rate of 60 million liters a day. With serious pollution problems arising out of this, we felt the need for a pipeline with 100 million liters a day capacity, which leads directly to the sea."

Mr Mittal said that the plan for the pipeline has already been approved by the National Institute of Oceanography. He added that it has also applied for subsidies under the technology up gradation fund scheme with the state government for the project.

Set up jointly by Mr Mittal and Mr Chetan Contractor, MCT Enviro Infrastructure Limited plans to take up more such projects.

Orissa opposition parties term Vedanta project as a great scam

SNS reported that Opposition members of Orissa state assembly have demanded scrapping of the MoU and institution of a CBI probe into Vedanta project scam.

The report cited Mr Narasingha Mishra of Congress as saying that "The government of Norway had given its views on Vedanta, the Supreme Court has also said it cannot trust the company and yet the BJD BJP government has issued a certificate describing Vedanta as a responsible corporate house."

Mr Mishra said that the MoU states specific provisions which shall be incorporated in a legislation to be enacted by the assembly. It takes the House for granted he remarked.

Mr Arun Dey member of National Congress Party, who in the past had raised questions on Vedanta and created a stir in the House, quipped it should be named ‘Naveen Patnaik Foundation project’. He however tried to justify the proposed international varsity saying it will be home to 100,000 students and bring in investment of over INR 24,000 crore.

Prakash Industries board approves investment of INR 4 billion

Prakash Industries has announced that its board of directors at its meeting held on March 27th 2008, have approved the investment of INR 4 billion by way of purchasing 570000 equity shares of INR 10 each at a premium of INR 7008 per share for consideration other than cash of an unlisted company owned by the promoters and having mining rights of an iron ore mine.

The board approved the issue of 1,600,000, 0% compulsory convertible preference shares of the company of INR 100 each at premium of INR 2400 per share to the promoters of that company in lieu thereof which would be convertible into 10 equity shares of PIL within a period of 18 months. The issue price of the 0% compulsory convertible preference shares of INR 100 each convertible into equity shares has been determined as per SEBI guidelines on the relevant date on March 26th 2008.

The board also approved increasing the authorized share capital of the company from INR 1.60 billion to INR 1.70 billion and borrowing powers of the board of directors from INR 10 billion to INR 30 billion.

Orissa BJD stage demonstration against New Mining Policy

SNS reported that, voicing its protest once again against the union government for not consulting the mineral rich states including Orissa for the formulation of National Mineral Policy 2008, the ruling BJD recently demonstrated in front of the official residence of the governor and submitted a memorandum addressed to the president of India seeking her interference in the gross injustice to the state.

It may be noted that, though chief ministers of 5 mineral rich states including Orissa have urged upon the union government time and again to share the draft mineral policy with the, the centre government tabled the National Mineral Policy 2008 in the Rajya Sabha on March 20th 2008 in a seemingly surreptitious manner, they alleged and added that the international mining companies and not the concerned states are going to benefit from it.

The chief ministers described the whole incident as a violation of the duty of the union government in upholding the spirit of federalism as enshrined in the constituency and questioned the timing, just before the house adjourned for recess.

They said that value addition at all stages should be attempted to add value to the exports, in stead of exporting minerals, which are the primary products. Value addition within the state would have been a boon for the state, even as it has embarked upon the industrialization path.

Business Plans for Major Ports in India

Mr TR Baalu union minister of shipping, road transport & highways said that Port Business Plans with a 20 year perspective for the 12 major ports have been prepared. Consultants, selected through the international competitive bidding process were engaged by the respective ports for the purpose.

The Port Business Plans address
1) The long term vision, goals and strategy of ports
2) Current port capabilities and recent performance
3) Competitive situation and outlook
4) New business opportunities and demand forecast
5) Removing barriers to ports performance
6) Required investment in port facilities and equipment
7) Required improvements in hinterland connectivity
8) Financing future investment requirements

Ports declared as major ports under the Indian Ports Act, 1908 are under the administrative control of the central government. All other ports, including private ports, collectively known as non major ports are under the overall jurisdiction of the respective maritime state governments.

Maruti Suzuki eyeing INR 9,000 crore CAPEX

It is reported that Maruti Suzuki India Limited is planning to invest INR 9,000 crore for expanding its business operations.

The proposed investments will be made for over a period of 8 years for setting up a world class R&D and design facility, improving warehousing facilities and marketing channels, upgrading logistics support and similar ventures.

Era Engineering inks MoU for investment in coal energy in Zambia

It is reported that Era Engineering Innovations has committed an investment of USD 5 million into coal powered energy generation in Zambia. As per report, Mr Felix Mutati Zambian minister of commerce, trade & industry has signed a MOU with Mr Ajay Mishra director of Era Engineering over the commitment on the sidelines of the meeting.

Mr Mishra said that Era would be sending a delegation of experts to Zambia in the first week of April 2008 to start the project assessment with plans to place the actual investments later in the year. He added that "We are keen on this investment and should be in Zambia in the first week of April 2008."

Mr Mutati said that Zambia and the Southern African Development Community had a shortage of 1,600 MW of electricity and needed to develop huge hydro power plants but still needed coal powered thermal generation for immediate use. He added that "There is a lot of market for power in Zambia and beyond. We also have vast coal resources which we will be happy to see transformed into electricity through your planned investment."

Maamba Coal Mine produced about 600,000 tonnes of coal per year in the 1980s, but years of undercapitalization have led to a fall in production. The coal mine has 78 million tonnes of known coal reserves likely to last over 70 years while the coal mine has capacity to produce up to one million tonnes of coal per year.

Era Infra JV bags DMRC contract

It is reported that Era Infra Engineering, along with partner KMB ERA JV, has secured a contract valued at INR 148.40 crore from Delhi Metro Rail Corporation.

The contract involves design and construction of Dwarka Underground Station, approach cut and cover tunnel and connected works.

Recently Era Infra bagged a contract valued at INR 86.5 crore from Central Park Estates for the construction and development of central park at Gurgaon. It operates as an integrated infrastructure construction company in India. It develops and constructs highways, railways, airports, power and industrial projects, institutions and universities and residential and commercial complexes.

TERI to set up climate centre in Ethiopia for Africa

PTI reported that Energy & Resources Institute will soon set up its centre in Ethiopia to focus on climate change and jointly work with African countries on the issue.

Dr RK Pachauri director general of The Energy & Resources Institute said that "The problems faced by earth are multi inter disciplinary in character. Climate change is one of the greatest threats. The new centre will focus on climate change in Ethiopia and look to work with various governments in Africa in this regard."

Mr Pachauri said that there is a shift taking place in the US' stance with regard to climate change and efforts were now being made on a substantial scale to try and reduce the greenhouse gas emissions. The impact of climate change on India would be very severe at both the social and economic levels. India had to develop sustainable solutions which the world can adopt. He added that "We have to look at the imperative of sustainable development, to meet the needs of the present generation without compromising the need of future generations."

He also warned that the impact of climate change would be serious on agriculture and food sustainability and there was a need to develop different agricultural and cropping patterns. He said "Water management will also become very important. We need to revamp the entire drainage system. Our hydro power plants should take into account the impact of the increasing precipitation levels."

Varun Shipping acquires large AHTS vessel

Varun Shipping Company Limited recently announced that it has taken delivery of third anchor handling & towing supply vessel with BHP of 16,085.

This is a specialized vessel which is used for deep sea oil exploration activity going on in areas like North Sea, KG basin and Atlantic Ocean off the coasts of Nigeria, Brazil and Mexico.

The acquisition was financed partly out of its internal resources and partly out of long term loans from State Bank of India and London based Bank of India.

With this acquisition, Varun Shipping will own a diversified fleet of 21 vessels comprising of 12 LPG carriers, 3 double hull Aframax crude tankers, 5 anchor handling towing and supply vessels and 1 product tanker.

Essar Shipping Limited changes name

Essar Shipping Limited has announced that it will be known as Essar Shipping Ports & Logistics Limited with effect from March 24th 2008.

PGCIL to take USD 1.2 billion loans from ADB & World Bank

PTI reported that Power Grid Corporation of India Limited has signed agreements with World Bank and Asian Development Bank for two loans of USD 600 million each for funding projects.

The loan from ADB is a part of the bank's newly introduced loan facility called multi tranches financing facility, under which loan assistance can be availed in a number of tranches depending upon the funding requirement. Mr RP Singh CMD of PGCIL and Mr Tadashi Kondo country director of ADB has signed that the loan agreement for USD 400 million.

PGCIL said in a statement said that "A framework financing agreement for multi tranches financing facility had been signed with ADB for USD 600 million. The multi tranches financing facility loan will be drawn in two tranches. In the first tranche, ADB will lend USD 400 million to the company."

It added that "Power Grid has not only tapped domestic markets, but has also been arranging funds from multilateral funding agencies. Signing of this loan of USD 400 million between Power Grid and ADB is a major milestone in this direction."

The loan will be utilized to finance part of the fund requirement for an 800 kV high voltage direct current lines under North Eastern Northern Western Region Inter connector I Project.

CCEA approves formation of JV by Daimler and Hero Group

Cabinet Committee on Economic Affairs has given its approval for setting up a JV by Dailmer AG with Hero Group India to jointly incorporate a company with an investment of INR 1650 crore. The JV will also be sourcing components from India for Daimler’s global requirements.

The JV would also undertake research and development activity for new products and variants. FDI amounting to INR 1650 crore will be received in India.

Border Road completes longest bridge in J&K

It is reported that Border Roads Organization has completed a 280 meter bridge in Jammu & Kashmir that would provide connectivity to the remote districts of Rajori and Poonch. The bridge that has been in the making since 1979 is currently the longest bridge in the state.

Built over river Chenab, the bridge is of civilian and strategic importance. The bridge has a pair to pair distance is 160 meter with two end spans of 60 meter each. With an overall width of 12 meter, the bridge has been constructed suing segmental construction technique and is equipped with four shock transmission units imported from France to withstand earthquake.

Work on the bridge began in 1979 but was abandoned due to technical difficulties. Even the resumption of work in 1986 could not be sustained for long. Work finally began in April 2006 and was completed in a record gestation time of 20 months.

Deheriya gypsum mining project in Rajasthan gets approval

It is reported that union ministry of environment & forests has cleared the Deheriya gypsum mining project of Rajasthan State Mines & Minerals Limited.

The INR 7.74 million project will have a production capacity of 500,000 tonnes per annum of gypsum by opencast semi mechanized method over a total lease area of 499 hectares. The life of the mine is 4 years.

About 1,667 tonnes per day of mineral will be transported by road to consumers. The water requirement of the project is estimated as 13.75 cubic meter per day, which will be sourced from Indira Gandhi Canal. After excavation of gypsum, land will be backfilled, compacted and returned to farmers.

BHP declares force majeure on Cerro Matoso nickel

It is reported that BHP Billiton had declared force majeure on nickel deliveries from its Cerro Matoso mine in Colombia.

BHP in a statement said that "Union strike action, which began on February 27th 2008, has impacted production at BHP Billiton's Cerro Matoso nickel operations. As a result, Cerro Matoso has advised customers that it has declared force majeure."

BHP said the management team at Cerro Matoso was working with the unions towards resolving the strike. It said that "We will continue to work with our customers and inform them when we return to full operations and production and when force majeure is lifted.”

The mine, which produces nearly 4% of the world's nickel, has been paralyzed since the strike started. Workers are demanding higher pay, better safety conditions and a reduction in the use of outside contractors. The main dispute is over outside contractors. The union opposes the use of such workers, while the company says they are necessary for short-term exploration, construction and other projects.

Mr Roger Herrera said that the strike can continue for 60 days before a government mediator is appointed, the miners went on strike demanding more hiring to replace workers who have left.

Cape Town based Investec Securities Ltd in a March 13 report said that Cerro Matoso mine produced 51,000 tonnes of nickel in the 12 months ended June 30. The strike will cut output to 44,000 tonnes of nickel this year, compared with an earlier forecast from the company of 48,000 tonnes.

US banks may get USD 325 billion subprime hit

JPMorgan Chase & Co in a report said that Wall Street banks are facing a systemic margin call that may deplete banks of USD 325 billion of capital due to deteriorating subprime US mortgages. JPMorgan, which sent a default notice to Thornburg Mortgage Inc after the lender missed a USD 28 million margin call, said that more default notices and margin calls were likely.

According to the report co authored by Mr Christopher Flanagan an analyst said that ''A systemic credit crunch is underway, driven primarily by bank write downs for subprime mortgages. We would characterize this situation as a systemic margin call.''

JPMorgan said that “The credit crisis that began about a year ago will likely intensify after February US employment report that most definitely signals recession.”

The US Labor Department reported that indeed, corporate bond spreads widened to a new record, surpassing levels seen in October 2002 during a boom in bankruptcies following the dot com crash. US employers cut payrolls in February for a second consecutive month, slashing 63,000 jobs, the biggest monthly job decline in nearly five years.

JPMorgan said that ''The weak February employment report points to an economy in recession.” The report included a revised bleaker forecast for subprime related home prices. The bank now sees prices falling 30% from its prior 25% forecast. Those prices have declined 14% since mid 2006.

OPEC maintains estimate for world oil demand in 2008

AFP reported that OPEC left unchanged its estimate for growth in world oil demand in 2008, arguing that while high oil prices and mild winter weather would brake demand in major industrialized countries, the market for crude would be strong elsewhere.

The Organization of Petroleum Exporting Countries in its March monthly report said that "World oil demand in 2008 is forecast to grow by 1.2 million barrels per day to average 86.97 million barrels per day, unchanged from our previous estimate.”

The report said that "Slow world economy and warm winter in some parts of the Organization for Economic Cooperation and Development regions dented demand for winter products. Fluctuating weather patterns caused oil demand in the OECD to decline in February.”

It continued that "The halt in economic activities in China over the Chinese New Year holiday season last month did not affect the country's oil consumption. In fact, power shortages caused independent power generators to kick in, which led to excessive diesel demand. Oil demand in other non OECD countries such as the Middle East, India, and Latin America was strong, offsetting the weak OECD oil demand during February."

OPEC said that nevertheless, it would primarily be the weather that would affect oil demand this year. Although the slowdown in the world economy, along with high retail petroleum prices, is considered a major variable in oil demand this year, the weather will play a significant role in oil demand as well. Strong non OECD oil demand is expected to boost total world oil demand by 1.3 million barrels per day in the first quarter."

OPEC also left unchanged its estimate for world oil demand growth in 2007, when it was projected to have risen by 1.2 million barrels per day or 1.4% to average 85.77 million barrels per day. It said that “Strong economic growth in non OECD countries accounted for all of last year's oil demand growth.”

Steel in the US seen as a growth industry

A panel of steel industry analysts at the Steel Business Briefing Steel Markets North America conference agreed that 2008 will be a banner year for North American steel mills, notwithstanding the specter of a recession.

Mr Mark Parr MD and equity research analyst at Key Banc Capital Markets told delegates that “Steel is a growth industry. Steel product shipments from US mills could increase 5% in 2008, even as demand from end users may drop 5% to 10%” He explained that imports to the US are down, inventory levels are low, but exports are up. He added that "It's a volume story for the US mills in 2008. The earnings outlooks for steel mills and service centers in the US market are as good as ever, but we are looking at a potential recession."

Mr Charles Bradford president of Bradford Research told delegates that the steel industry in the US actually had its recession last year, in 2007, when apparent consumption was down 9.9%. He said if any steel companies cannot make money in this market, then something is wrong. He elaborated on the extent of low import volumes by calculating that the net flow of imports into the US market may be as little as 4 million ton. To arrive at such a net flow figure, Mr Bradford takes total imports and then deducts for semi finished material and some hot rolled coil that's further processed and also subtracts the industry's healthy export quantities.

South African iron ore exports in 2007 up by 16% YoY

It is reported that South Africa exported 30.336 million tonnes of iron ore in 2007, which represents an increase of 16% YoY as compared to 26.161 million tonnes in 2006.

As per report, the major destinations are as under

1. China - 11.772 million tonnes up by 8.2% YoY
2. Japan – 6.570 million tonnes up by 33.7% YoY
3. Germany – 5.658 million tonnes up by 54.8% YoY

Rail infrastructure battle will lift inflation - FMG

According to Mr Andrew Forrest CEO of Fortescue Metals Group, the duplication of rail infrastructure to mines in Western Australia's Pilbara region will contribute to inflation. Mr Forrest at an iron ore conference recently in Perth said that its is battling Rio Tinto Ltd and BHP Billiton Ltd through the courts and National Competition Council to open up their Pilbara rail network. He said that it is time for the parties to cooperate.

Mr Forrest said that "Let us stop trying to cut each other off at the legs and let's cooperate for the good of Australia and the good of our shareholders. We are a growing economy but what we don't need to do is spend wasteful, precious investment dollars where we don't have to because this will just drive up the cost of living right across Australia.”

He added that "We have one of the heaviest haul, if not the heaviest haul railway lines, that runs right alongside BHP's and we're saying come and use ours you're most welcome. We are advancing the cause for WA's precious Pilbara cooperating as one single unit to compete against the rest of the world, instead of this anti-competitive, bad for Australia situation."

Mr Forrest said that three separate rail operators and three separate port operators with railway lines running alongside each other were simply unnecessary.

Fortescue wants access to Rio's Hamersley Iron and Robe River railway network and BHP Billiton's Goldsworthy and Mt Newman rail line. So far, the mid-tier miner has won several court proceedings on the matter.

Noble loss widens in Q4 of 2007

Auto parts supplier Noble International Ltd announced that its Q4 loss more than doubled as hefty one time charges offset a more than twofold increase in sales. It posted record quarterly net sales of USD 317.4 million Q4 of 2007, an increase of 129.7% YoY as compared to net sales of USD 138.2 million in Q4 of 2006 and net loss of USD 5 million as compared with a loss of USD 2.2 million in Q4 of 2006.

The net loss for the fourth quarter of 2007 included the negative impact of the following one time items:
1. USD 2.3 million of integration and transition services costs related to the Company’s acquisition of the tailored blank operations of ArcelorMittal
2. USD 1.5 million non cash equity loss related to the Company’s equity investment in SET Enterprises, Inc.
3. USD 1.1 million charge related to the resolution of a commercial issue with a North American OEM
4. USD 0.9 million income tax expenses related to the Company’s treatment of its planned repatriation of earnings from a foreign subsidiary
5. USD 0.9 million charge for an adjustment to the Company’s self insured workers’ compensation liability at its roll forming facilities
6. USD 0.6 million severance charge related to a headcount reduction in the Company’s North American operations.

TNB will buy more coal in 2008

The star online reported that Malaysian utility Tenaga Nasional Bhd has agreed to buy more than its coal requirements for this fiscal year.

Mr Datuk Izzaddin Idris at Investor Malaysia 2008 said that it had secured 111% of coal needs for the year ending August financial year 2008. Mr Izzadin said that “The outlook for financial year 09 would be very, very challenging adding that he expected prices to extend gains.”

He added that TNB is looking for new sources for coal.

According to Bloomberg, TNB hasn't locked in coal purchases for 2009 and 2010. Rising coal prices have raised concern that TNB's profit may be eroded by higher fuel costs.

ArcelorMittal to reduce dust emissions at Vereeniging

Engineering News reported that ArcelorMittal South Africa will spend ZAR 150 million to cut visible dust emissions at its Vereeniging plant, south of Johannesburg as part of its ZAR 1 billion environmental plan. This came after the so called Green Scorpions in July 2007 said that they had found a series of noncompliance at the plant.

ArcelorMittal South Africa said that the Vereeniging works project would comprise of a new dust extraction system to be completed by the last quarter of 2009. The company said that its ZAR 1 billion environmental plan sought to address the environmental legacy problems inherited by the company and to install cleaner technology.

Mr Rick Reato outgoing CEO Of ArcelorMittal SA said that “Currently the dust from the permitted stack at its Vereeniging melt shop is within the permissible limits but experiences fugitive emissions arising from the building to the surrounding environment. We are committed to decreasing air emissions; energy consumption; targeting waste through material efficiency and recycling and developing systems and processes that will afford our plants zero effluent discharge status.”

Utah Tower mine closed for safety concern

It is reported Murray Energy Corp subsidiary Utah American Energy's Tower mine, the deepest coal mine in the US, abruptly shut down indefinitely because of safety problems. The company's statement did not specify whether the Tower mine is being permanently shut down.

Mr P Bruce Hill CEO of UtahAmerican Energy said that they were forced to close the mine because of unexpected and unusual stress in mine pillars that threatened the safety of miners. He said that the company wanted to relocate a longwall mining machine inside Tower but found the conditions unsafe and changes ordered by federal regulators contributed to the mine's closing.

It had closed the mine for several weeks last summer as engineers tested its ability to withstand seismic shocks. The Tower mine, seven miles north of Price Utah, reopened in late January.

Mine owners were fined USD 420,000 for flagrant safety violations at the mine on March 20.

Mr Jindal breaks ground for shipyard at Houma

It is reported that Mr Bobby Jindal governor of Louisiana lunged gold shovels into the property breaking ground for Edison Chouest Offshore’s LaShip shipyard project at Houma in the Louisiana Sate of US.

Mr Jindal said "This is a great day for Louisiana. This is a huge economic development not just for the Bayou Region, but for the whole state. That’s 1,000 families who’s hopes and dreams will be realized right here in south Louisiana."

Edison Chouest Offshore project represents a USD 90 million investment and the potential creation of 1,000 jobs. The LaShip shipyard is expected to be Chouest's largest fabrication and shipbuilding facility worldwide, producing ships larger than 350 feet. It should be fully operational in 2009.

US economic growth slumps to 0.6% in Q4

US Commerce Department said that US economy grew at an annual rate of just 0.6 % in the Q4 of 2007, down sharply from the brisk 4.9% pace in the previous quarter. US economy grew by 2.2% for all of 2007, the worst showing since 2002.

Consumer spending, which accounts for two thirds of overall economic activity, rose at an annual rate of 2.3% in the October to December period, down from a 2.8% growth rate in the third quarter but better than a 1.9% growth rate previously estimated. For all of last year, consumers boosted their spending by 2.9%, the smallest increase since 2003.

Spending on housing projects plunged by 25.2% in the Q4, steeper than the 20.5% drop in the third quarter, the most in 26 years. Many economists believe growth in the current quarter, will be even weaker than the 0.6% increase due to the continuing housing and financial crises.

Analysts said that this underscored how much momentum the economy has lost.

OneSteel Whyalla Steelworks boosted by new plant

AAP reported that a USD 400 million conversion program at OneSteel's Whyalla steelworks should extend the life of the operations to 2027.

Mr Kevin Foley deputy premier of South Australian said that in Whyalla to mark the completion of Project Magnet, the plant was a key component of the future of the Spencer Gulf region. He said that "The people of Whyalla can look toward a strong and prosperous future confident that their jobs are safe and that there will be jobs, especially more highly skilled ones, for their children.”

With Project Magnet, OneSteel has converted the Whyalla Steelworks to use magnetite ore as its feedstock rather than the hematite ore used in the past. The change has helped the company boost steel exports, cut operating costs and reduce the amount of dust produced, a significant issue for Whyalla residents for many years.

With magnetite ore delivered from the mine as a wet slurry and then turned into pellets, the production process results in less dust emissions.

Mr Geoff Plummer MD of OneSteel said the Whyalla steelworks were important to the continued growth of the company. He said that "Whyalla has had a long relationship with steel production and it is very satisfying to be able to build on that relationship and extend it into increased mining activity.”

Macmahon bags rail contracts by BHB Billiton

Macmahon Holdings Limited and its subsidiary MVM Rail Pty Limited have been awarded approximately USD 42 million of contracts. Under the contracts they will provide 7 kilometers of rail track servicing BHP Billiton Limited's iron ore rail operations in the Pilbara Region of Western Australia.

The company said the project involved both Brownfield and Greenfield earthworks as well as drainage and roadwork on four sections of rail line at Newman Loop, Orebody 25, Jimblebar Wye and Jimblebar Mine.

Macmahon said that "This contract is the first project where Macmahon and MVM Rail will construct both earthworks and trackworks on sections of rail line for BHP Billiton Iron Ore.”

The award of these contracts follows the signing, in December 2007, of the contract to construct the extensive foundations for the new crushing and screening plant at BHP Billiton's Newman Hub as part of BHP Billiton Iron Ore's Rapid Growth Project 4.

The project is expected to commence work in April, with completion scheduled for October 2008.

Lower steel imports in US to hit top line of New Orleans port

AP reported that reduction in steel imports into US is hurting the Port of New Orleans, which is seeing a big drop in revenue as a result. The port budget for the year that began July 1st 2007 was based on expected revenue of USD 40.1 million from terminal operations and other maritime activities. But actual revenues for the year will be closer to USD 36.4 million or 9% short of projections.

Mr H Daniel Hughes chairman of the Dock Board at the port's monthly Dock Board meeting said that "This is a direct result of problems with steel." He added that a weak dollar and frenzied buying in 2006 that left surpluses in domestic steel warehouses has hurt steel imports.

The trend was more pronounced at the Port of New Orleans, where steel imports slipped by more than 48%in 2007. That was a sharper decline than the 26% drop in national imports of the commodity.

General cargo at the port totaled 7.4 million tons in 2007. That was the least amount of cargo to reach New Orleans since 1991, when the port processed 6.9 million tons of the steel, boxed retail items and various other goods that make up general cargo. It also was a fifth less freight than the port saw in 2006 and down 400,000 tons from 2005, the year Hurricane Katrina struck the city.

Jacquet adds West Coast service in California

Jacquet Mid Atlantic Inc a stainless and nickel alloy plate distributor and subsidiary of Jacquet Metals SA announced that it has added a West Coast service center located at Irvine in California. This will be the fourth operating location for the group in the USA and the third subsidiary for Jacquet Mid Atlantic Inc.

The facility in Irvine is an 83,000 square feet building with 3 bays and six cranes. The company has installed a large waterjet and plasma system similar to the previous facilities at Houston in Texas and Racine in Wisconsin.

Jacquet West will begin its sales effort in March 2008 and after installation of cutting equipment expects to be processing plate products by the end of 2nd Quarter.

Mr Kevin McKown a former GM at Curtis Wright of Crane Co and Mr Flowserve has been named to head this location and brings over 20 years of management experience in the oil refining, power generation and the process industries.

In addition, Jacquet Mid Atlantic opened a sales office in November 2006 at Charlotte in North Carolina and continues to grow its presence in the Southeast USA.

South Korea imported 6 million tonnes of coal in February 2008

According to the latest customs statistics, South Korea imported 7.6 million tonnes of coal in February 2008 as compared to 7.3 million tonnes in February 2007

The country wise coal import details are:
China - 1.3 million tonnes
Canada - 0.7 million tonnes
FSU - 0.8 million tonnes
Australia - 2.5 million tonnes
Indonesia - 2.2 million tonnes

Maco Steel Inc closes doors

The Grand Rapids Press reported that 45 lose jobs as family owned Maco Steel Inc closes doors of Plainfield Township plant in US. The plant is owned by Mr Dan Slater the son of late founder Mr Kent Slater.

Mr Dan Slater said that "We lost some customers recently and that was a big hit. It was basically the downturn in automotive, in the local tool and die market."

Maco cut and ground heavy steel plates for the manufacture of stamping dies, injection molds and special equipment for a variety of industries. After it filed bankruptcy, the company got another shock. Its biggest customer Die Tron unexpectedly closed doors March 18.

CSC board approves 2007 results

During the 5th meeting of the 13th board of directors of China Steel Corporation held on March 19th 2008 at Kaohsiung, CSC's operation results in fiscal year 2007 were approved.

CSC has announced revenue of TWD 207,919 million and income before income tax of TWD 61,652 million.

American wire rod import prices jump

It is reported that imported wire rod price in US have increased by USD 88 to USD 110 per ton last week.

The reported levels are
1. Chinese - USD 1,047 to USD 1,069 per ton FOB
2. Turkish - USD 1,090 to USD 1,113 per ton FOB

Although American buyers do not want to pay a higher price, the low price resources have already been sold out, so they have no choice but to buy at a higher price.

American domestic price for low carbon steel wire price at USD 871 to USD 893 per ton FOB and for high carbon at FOB USD 926 to USD 948 per ton FOB.

(Sourced from YIEH.com)

South Korean professors call for end to canal plan

Yonhap reported that with parliamentary elections only 15 days away, about 1,800 South Korean professors launched a coalition calling for the country's new president Mr Lee Myung bak to withdraw his plan to push for a massive cross national canal.

As per report Mr Lee a former Seoul mayor and Hyundai construction chief who took office last month, has pledged to build a 450 kilometer long canal linking Seoul with Busan, the nation's second largest city on the south coast during his single five year term.

Dominican builders want imported steel and cement

Dominican Today reported that Dominican Housing Builders and Promoters Association asked the Dominican government to authorize international tenders to import 1 million bags of cement and that same number of quintals of rebar, to confront the rise in the prices of materials in last three months, which they say is from speculation and as much as 66%.

Mr Jaime González president of Acoprovi said that the companies which market those materials have raised prices to levels which don’t guarantee the industry’s stability, affecting employees and the country’s economy. He said that rebar and cement are 65% of the cost of constructions.

He noted that in November a quintal of rebar cost XCD 1,500, compared with XCD 2,400 now, whereas cement was XCD 5 and is now XCD 7.2 per bag.

Central Highlands approves steel rolling plant

VNA reported that Vietnam’s Central Highlands Dak Nong province on March 28 gave the nod to a steel rolling plant building project, which is expected to be the largest of its kind in the area.

The plant, estimated to cost more than VND 1.63 trillion (USD 1 billion) is expected to break ground in August 2008 and will be built in two years.

Dongbu Steel appoints Mr Hui and Mr Wuk as Co CEOs

Dongbu Steel Co Ltd. announced that it has appointed Mr Han Gwang Hui and Mr Cheon Ju Wuk as its Co CEO effective March 28th 2008.

The current Co CEOs Ms Kim Jun Gi and Mr Lee Su Yil continue their duty at the Company.

Yokohama Steel appoints Mr Ito as new president

Yokohama Steel Co Ltd announced that it has appointed Mr Seiki Ito as President and Representative Director of the Company, effective March 26th 2008.

Mr Seiki Ito replaces Mr Takeshi Yokohama who will resign as president and representative director on March 26th 2008.

Ezz Steel the largest steel maker among Arab nations

ArabSteel reported that Egyptian steel major Ezz steel achieved the biggest production figure among the Arab companies in 2007 as its production amounted to 4.8 million tonnes of long and flat products, followed in the second rank by Saudi Hadeed with a production figure of 4.7 million tonnes.

The number of the companies which produced more than 900,000 tonnes is as under in the descending order
1. Ezz Steel in Egypt
2. Hadeed in Saudi Arabia
3. Libyan Iron and Steel Company in Libya
4. ArcelorMittal Annaba in Algeria
5. SONASID in Morocco.

The number of the companies which produced more than 500,000 tonnes but less than 900,000 tonnes each is also five

The total production of the Arab companies of long and flat products in 2007 is estimated to be slightly more than 23 million tonnes, according to the initial data of the Arab Iron and Steel Union, of which 4.4 million tonnes of flat products and the rest were long products.

RAK Investment Authority to invest in Poti Sea Port in Georgia

Sea News reported that RAK Investment Authority will be taking a 51% stake in Poti Sea Port in Georgia. It is scheduled to close the deal in the first half of April.

Novosti Georgia quoted Mr Vladimir Gurgrnidze prime minister of Georgia as saying that “51% share of the Poti Sea Port and a part of the port area of about 3 million square meters will be sold to RAK Investment Authority of United Arab Emirates.”

The Georgian Government also approved a project of building a new port at the sold territory and establishing free industrial zone there.

It is expected that within the next 3 years to 4 years RAK Investment Authority will invest in the named projects more than USD 200 million.

In 2007 the Poti port handled 7.7 million tonnes of crago.

Emirates Steel increases rebar price for April to USD 1050

Steel Business Briefing reported that Emirates Steel Industries has increased its rebar price to UASD 1,050 per tonne for April 2008 deliveries. Its March price was USD 900 per tonne.

Oman’s Sharq Sohar raises rebar prices for April to USD 1000

Steel Business Briefing reported that Oman’s largest rebar producer Sharq Sohar has increased its ex mill price to USD 1,000 per tonne for April 2008 deliveries up from USD 900 per tonne for March 2008 deliveries.

Sharq Sohar produces about 300,000 tonnes per year of rebar. It is constructing a billet plant of 300,000 tonnes per year capacity which is set to start production in a couple of months.

Some rebar is also imported into Oman from Turkey, Qatar, Saudi Arabia and the UAE. Imported rebar was booked at USD 900 to USD 1,010 per tonne on CFR basis for early April 2008 deliveries.

Update on Emirates Steel expansion plans

SBB reported that Emirates Steel Industries has a 3 phase expansion plan.

The first phase recently started operation and it reached a production capacity of 750,000 tonnes per year of rebar, 480,000 tonnes per year of wire rod and 620,000 tonnes per year of rebar in coil.

The second phase includes a 1.6 million tonnes per year DRI plant and 1.4 million tonnes per year melt shop. A contract was signed with Danieli and the project is planned to be completed in a year.

The third phase of expansion is construction of a DRI facility with 6 million tonnes per year capacity. A sections mill is also planned to be built in 2013.

Pakistani cement sales in March hit record 2.6 million tonnes

The News reported that Pakistan’s cement sales in March 2008 have breached the previous monthly record high of 2.56 million tonnes in November 2007 to reach 2.61 million tonnes. This has been achieved on the back of record breaking exports of 726,000 tonnes and 1.9 million tonnes local sales.

The total expected sales at the end of March 2008 would reach 3.2 million tonnes with local sales reaching 2.3 million tonnes and exports 903,000 tonnes.

Exports, which have already broken the monthly record of 645,000 tonnes set in February 2008, are believed to exceed 900,000 tonnes registering a phenomenal growth of 143% YoY and 40% MoM.

However, the local sales which made a record of 2.0 million tonnes in November 2007 are likely to reach 2.3 million tonnes in March 2008. High cement dispatches during this period is a normal phenomena since it marks the start of peak demand season. Winter season has ended and upbeat construction activities, both in the local and the exports market, are on the rise.

Mr Wali Bhai Patel president of Karachi Cement Dealers Action Committee said that the rise in cement prices is not just because the production cost is not what they raised and this is just in line to make profits when government control is weak to control cement companies activities. He added that "We demand new government to take serious action of the investigation of Competition Commission of Pakistan against cement companies in previous government which after its completion did not make public and this is the need of hour to book those who are responsible of cement cartels in Pakistan."

The company wise sales breakup reveals that Pakistan Cement and Maple Leaf Cement would be the two companies to post cement dispatches growth of over 100% July 2007 to March 2008 period with sales at 1.8 million tonnes and 1.9 million tonnes respectively. The second highest growth of 76% in dispatches will be of DG Khan, followed 49% and 23% by Pioneer Cement and Lucky Cement, respectively.

Doosan bags desalination contract in Kuwait

Arabian Business reported that Kuwaiti ministry of electricity & water has signed up South Korea's Doosan Heavy Industries to build a reverse osmosis desalination plant at Shuwaikh Port in a deal worth USD 320 million.

The facility will have a capacity of 30 million gallons per day and will supply drinking water for 450,000 residents in Kuwait City. Startup is scheduled for August 2010. Under the contract, Doosan will design and build the plant as well as supply equipment and materials. It will also operate the plant for 3 years.

Mr Yoon Sik Park senior VP of Doosan said that "We have furthered our reputation as a reliable builder of reverse osmosis desalination plants, in addition to multi stage flash plants, for which we enjoy our status as the world's number one in terms of market share."

Doosan has secured a firm position in the desalination plant market in the Middle East since completing the Sabiya Desalination Plant 1 and 2, the refinery of Shuaibah Desalination in 2004, and Sabiya Desalination plant stage 3 in 2005, both in Kuwait.

Earlier in March 2008, Doosan was awarded a contract worth USD 1.68 billion from Dubai Electricity & Water Authority for the construction of the ‘M Station' power plant in Jebel Ali. It was also behind the Fujairah desalination/power plant.

Pakistan Punjab Province increases iron ore and coal output

The Post quoted Mr Afqar ul Haq minister for mines & minerals of Pakistan’s Punjab province as saying that the overall annual production of iron ore in the province has reached 60,000 tonnes and coal 600,000 tonnes, which will be further increased with the discovery new reserves.

Mr Haq said that exploration work has been expanded and the services of private sector are also being utilized in this regard.

He added that “The demand for iron and coal is increasing by the day. During 1 year more than 30 licenses had been issued for iron ore exploration and 130 for coal exploration.”

Egypt and Russia set to ink nuclear deal

Itar Tass news agency reported that Mr Hosni Mubarak president of Egypt met with Russian leaders to close a deal allowing Moscow to join a tender for Egypt's first civilian nuclear power station. Mr Mubarak said that after difficult negotiations he is ready for the nuclear cooperation agreement.

Russian president elect Mr Dmitry Medvedev, who takes over from Mr Vladimir Putin in May 2008, told Mr Mubarak that he expected a productive partnership in the nuclear sphere following the agreement.

The nuclear cooperation accord will allow Russia to bid in an international tender for a USD 1.5 to USD 1.8 billion reactor projects on Egypt's Mediterranean coast, first stage in Cairo's program to reduce energy reliance on gas and oil reserves.

Russia is keen to reestablish a commercial and diplomatic presence in the Middle East, which was a stronghold of Soviet influence before the end of the cold war and subsequent surge of US dominance.

UAE wood imports surge by 63% - Report

Gulf News reported that UAE witnessed a 63% increase in wood imports in the last 2 years, with 2007 figures reaching AED 8.5 billion as compared to AED 5.2 billion in 2005

Dubai Ports, Customs & Free Zone Corporation statistics indicate that market growth of 25% to 30% per annum, with certain segments enjoying higher growth rates.

The growth in the industry has come as more contractors are moving away from traditional concrete and tile and using wood products for flooring, construction work and interiors.

The majority of wood imports are timber and plywood, however, wood flooring has also seen a dramatic increase. According to statistics released by Dubai Customs, in 2005, flooring imports alone registered an increase of 1,345 %.

Along with the increased preference for wood in construction projects in the UAE, the re-export of wood from the UAE has grown by 60 per cent since 2006 and is set to go up by another 30 per cent in 2008, according to

Mr Dawood Al Shezawi MD of Strategic Marketing and Exhibitions, which organized the annual Dubai Woodshow expo recently said that “The wood and wood products sector has largely benefited from the tremendous growth of the regional property market. With AED 150 billon worth of projects still in the pipeline, there is remarkable scope for expansion of the wood industry.”

Potential for wind & solar power in Egypt is massive – Expert

Mr Gianpiero Coppola VP Middle Eastern operation of Avelar Energy has stressed the importance of expanding renewable energy in Egypt.

Mr Coppola said that the potential for wind and solar power in Egypt is massive and called on the government to encourage private investment through tax credits and other incentives. He added that "If you cover a relatively small portion of Egyptian territory with solar collectors, you will be able to supply the power needs of the whole of Europe. The problem is that the investment in order to do this would be huge."

Mr Coppola said that Avelar would focus on wind power in Egypt first because it is cheaper and more developed than other technologies. But the greatest potential is in solar energy, he said, despite restrictively high investment costs. He added that "What we are trying to do here in Egypt is try to talk to the authorities in charge to find a way to make the investment feasible, profitable."

Egypt’s interest in renewable fuels spans more than 2 decades. In 1986, the ministry of electricity & energy founded the New & Renewable Energy Authority to vitalize the sector. But the pace of growth has not always met expectations. In 2007, New & Renewable Energy Authority said that it aimed for 3% of Egypt’s energy to come from renewable sources by 2010 and 14% by 2020.

In 2007, Egypt’s wind power capacity ranked 21st in the world, producing about 310 MW up from 145 in 2005. Still, this figure is dwarfed by the 3,129 MW generated in Denmark, 15,145 MW in Spain and 22,247 MW in Germany. Egypt was ranked just one spot above Belgium.

Yanbu water and power project invites bids

It is reported that interested bidders can submit bids for the development of the Yanbu independent water & power project in Saudi Arabia by August 27th 2008. Mr Thamer S Al Sharhan president & CEO of Power & Water Utility Company for Jubail and Yanbu announced that they have released a request for proposals for the project last week.

Marafiq has issued the request for proposals to pre qualified bidding groups to select a developer or a developer consortium to own 60% of a special purpose project company that will build, own, operate and transfer the 1,700 MW and 150,000 cubic meter of water per day. The remaining 40% of the shares in the project company will be held by Marafiq.

Mr Al Sharhan said that "The issuance of the request for proposals for Yanbu independent water & power project represents a major step forward in the development and privatization of Saudi's water and power sector. The request for proposals is the product of significant work by various organizations in Saudi and has the full support of the government. This is also a reflection of the strong economy that Saudi is experiencing."

The project company will sell its entire capacity and output to a new off taker company in Yanbu that is 100% owned by Marafiq. This will be done under a 25 year power & water purchase agreement with structured credit support from the ministry of finance.

This is the second independent water & power project that is being tendered by Marafiq, with the first being the Jubail independent water & power project, which achieved financial close in June 2007.

Marafiq's owners are the Royal Commission for Jubail and Yanbu, SABIC, Saudi Aramco and the Public Investment Fund, each holding 24.81%. The remaining 0.76% is held by private investors.

Dubai to host technology management conference in April

Trade Arabia News Service reported that Dubai is set to host a major technology management conference in April to support Middle East’s construction boom. Senior representatives from Nakheel and WS Atkins Global will use the event to examine the role of new technology in the creation of globally famous projects, including the famous Palm Islands in the UAE.

To be held under the patronage of Sheikh Ahmed bin Saeed Al Maktoum, the 17th International Conference on Management of Technology will provide one of the most in depth assessments to date of the impact of the knowledge economy on regional success.

The 17th International Conference on Management of Technology will take place from April 6th 2008 to April 10th 2008 at Dubai International Convention and Exhibition Centre. The event’s main sponsors are Al Maktoum Foundation and WS Atkins Global.

Dr Abdullah Alshamsi vice chancellor of British University in Dubai said that "International Conference on Management of Technology event supports professionals from a full range of industries, from financial services through to the government sector and we believe there are strong lessons to be learned from the technology pioneers in the construction sector."

One of the major presentations from Nakheel will focus upon the company’s ground breaking knowledge & technology centre, which was designed to manage the flow of technology and information within the Palm Jebel Ali project, one of the world’s largest reclaimed islands.

Agility buys stake in US based Industriaplex

It is reported that Agility has acquired a 10.82% equity stake in US based Industriaplex Inc.

Industriaplex is a global sourcing, equipment distribution and facility services company that provides integrated supply, installation and maintenance solutions. Its customer base is largely in the US, Canada, Kuwait and China and includes industry leaders in the retail, foodservice, grocery and manufacturing markets.

Mr Essa Al Saleh president & CEO of global integrated logistics for Agility said that "Industriaplex has a unique business model and set of services that complements Agility’s global network. Through this partnership, we continue to focus our strategy of differentiating Agility’s capabilities and solution offering to its customers by adding sourcing and related value adding services in key emerging markets."

According to Mr Jason Gries chairman & CEO of Industriaplex, its business model integrates sourcing, supply chain, installation and maintenance solutions that reduce the total lifecycle costs of its customers’ facilities, equipment, and systems. This is achieved through volume aggregation, variable, unlimited global manufacturing capacity, and by optimizing the design and deployment of the products material sourcing and Lean Sigma continuous improvement processes.

PEPCO calls for national energy plan in Pakistan

Mr Munawar Basser Ahmad MD of Pakistan Electric Power Company has stressed the need for formulation a national energy plan for the current century to effectively deal with the power crisis in Pakistan.

Mr Ahmed said that non availability of affordable energy to the industrial sector had adversely affected the economic growth and declined tendency for industrial investment in Pakistan.

Referring to the power crisis in Pakistan, he mentioned several crucial aspects which included inadequate energy demand forecast, lack of effective implementation modalities, lack of financial planning, lack of coordination between hydel, oil, gas and coal entities.

He stressed the need for implementation of short term, mid term and long term plans for the next 25 Years in Hydel, gas, oil, coal and nuclear sectors.

Sharp rise in Capesize freight on Brazil to China iron ore route

It is reported that after consistent drop in Capesize freight on Brazil to China route for 2 weeks till March 23rd 2008, it witnessed a very sharp increase during past few days.

As per reports, Capesize freight which was in the range USD 62 per tonne to USD 64 per tonne during last week, have been reported quoting USD 78 per tonne to USD 79 per tonne level on March 28th 2008. This is the sharpest rise in the ocean freight in Brazil- China route in 2008.

This has lead to a sharp rally in Baltic Capesize Index from 9894 to 11815 in 4 sessions after Easter holidays, an increase of approx 20%.

Shipping industry experts attributed the reason of recent rise in Capesize freight to increase in chartering activity by Chinese buyers of iron ore from Brazil for April month. It is anticipated that further 10% rise in ocean freight in this sector may occur in the coming week.

Chinese HR export prices likely to increase further

It is reported that Chinese domestic HR prices witness rebound this week after a period of downward corrections but export offers changed little since most steel producers have not announced quotations for May 2008 production yet.

On Shanghai market, price for commodity grade 4.75 to 11.5mmx1500mm by Shagang is at CNY 5200 to CNY 5220 per tonne, that for 1800 wide at CNY 5500 to CNY 5520 per tonne. Low alloyed 1500mm wide HRC is being quoted at CNY 5450 per tonne, which compares with CNY 5600 per tonne for 1800mm cargo.

Export offer for hot rolled steel coil price is set to move up again in the next 1 or 2 weeks due to expected increase in domestic market and higher than expected overseas demand as there are said to be more enquires than allocation at moment.

Tier two steel makers are offering commercial 4.5-11.5mm HRC at USD 860 to USD 870 per tonne FOB but supply is tight. But traders also mentioned that it is not difficult to get tonnage May 2008 shipment as long as transaction price is USD 860 per tonne FOB. While a North East China based tier one steel mill is said to have concluded business at USD 870 FOB. Another major producer in Jiangsu province tells Mysteel that it going to release offer for June 2008 shipment next week, which is forecast to be up additional USD 20 to USD 30 per tonne to USD 880 to USD 890 per tonne FOB or even USD 900 per tonne FOB.

But, South Korean buyers are bidding commercial HRC at USD 840 to USD 850 per tonne CFR, which compares with Chinese offer at USD 870 per tonne to USD 880 per tonne CFR for May 2008 shipment.

Traders are anticipating further rise in export price, however most of them are afraid of abrupt downward adjustments in the near future. At the same time, trading sources indicate that some overseas buyers have become cautious and are scaring to take aggressive action on purchase since import cost has been much higher than its domestic level.

(Sourced from MySteel.net)

Shougang to double Peru iron output in 2010

Shougang Hierro Peru has announced that it will invest in an expansion project to double annual iron production to 16 million tonnes, starting in 2010.

Mr Raul Vera general director of Shougang Hierro declined to say how much the project will cost, but Peru's mining minister has said it is around USD 700 million.

Mr Vera said that "The plan is to double production, in the first stage to some 16 million tonnes of iron a year. Right now, it produces about 8 million tonnes a year. In the second stage, we will increase production to 20 million tonnes of iron per year."

Shougang Hierro Peru is a subsidiary of the Chinese Shougang Group and is the largest iron producer in Peru. The mine, which produces some 20,000 tonnes of mineral a day, sends most of its output to China, a major minerals consumer.

Chinese rebar and WRC export prices remain firm

Export offers for Chinese construction steel remained firm this wee mainly due to the improvement in both domestic and overseas market prices.

Domestic market prices witnessed a rebound this week. On Shanghai market, HRB335 20mm rebar was being quoted at CNY 4820 to CNY 4830 per tonne up by CNY 50 to CNY 60 per tonne from last week, HRB400 at CNY 4860 to CNY 4880 per tonne, commercial wire rod goes at CNY 5020 per tonne and hi speed material at CNY 5040 per tonne.

Export offers were largely unchanged. Prevailing export offers for rebar are still at USD 860 to USD 870 per tonne FOB, but there is little transaction. Wire rod was being quoted at USD 890 to USD 900 per tonne FOB, an increase of USD 10 per tonne. Some steel makers were tagging at USD 860 per tonne FOB for material with boron.

Though there is expectation of further rise in export offer, traders are afraid that steel producers would transfer lots of cargo to overseas market if there is downward correction in domestic market prices. If that's the case, steel mills probably would cut export prices substantially as there is as large as 15% to 20% profit margin as a result of tricks to avoid export tariff.

(Sourced from MySteel.net)

Chinese traders building stocks on positive outlook till May

It is reported that many steel traders are keen to stock up materials in light of declining output growth but strong demand.

As a result, HRC inventory surged to 634,000 tonnes in early March from 422,000 tonnes at the end of 2007 in Shanghai market, CR steel up to 293,000 tonnes, medium plate to 286,000 tonnes.

Although domestic steel market slipped a bit, traders are confident that Chinese steel market boom will persist at least till May, and they are in no rush to cash out at the moment.

(Sourced from MYsteel.net)

Tangshan based small and medium steel mills facing cost pressures

The Beijing News reported that, in face of mounting raw materials prices and the government's intensified elimination campaign, small and medium scale steel mills in Tangshan are trapped in hopeless straits now.

Tangshan has more than 70 steel mills, accounting for half of Hebei Province's steel output, or one tenth of China’s. But a single mill's annual production is below 650,000 tonne on average, often generated by backward and polluting facilities.

Due to mounting iron ore and coking coal costs, China’s backward capacity elimination campaign and policies encouraging M&A trend, it becomes harder for the smaller steelmakers to survive, incl. those in Tangshan. They have to choose from dropping out, trying for expansion, being regrouped or sold to foreign companies.

According to manager of a mill located in a small town of Tangshan, his profit is shrinking dramatically, earning not more than CNY 100 for per tonne steel produced, because of the materials. Some mills are already closed for not being able to afford high costs. Fr a few others, the boss ran away, owing four months of salaries of the workers, who are trying to report to relevant department.

(Sourced from MySteel.net)

Chinese steelmakers profit growth dives in first two months

According to statistics released by China Iron and Steel Association showed that the large and medium sized iron & steel enterprises in China reported a mere 20.4% profit growth in the January to February 2008 as compared to the hefty 408% YoY growth in January to February 2007.

CISA said that despite a combined profit of CNY 22.56 billion, more steelmakers reported losses in the first two months due to impacts of the snow havoc raging south China in January and early February and a substantial rise in the price of raw materials. It said that a total of eleven mainstream steelmakers reported losses in the January to February 2008 period, six more than the figure in the same previous period. Cumulative losses reached CNY 1.017 billion up a hefty CNY 929 million from the same previous period.

Analysts predict that listed steelmakers' profit growth is doomed to drop significant in the first quarter of this year over Q1'07, when the combined net profits of 30 listed iron and steel companies grew by 202.8%. Of the 13 iron and steel firms that have released their 2007 results so far, only Tangshan Iron & Steel Co reported a projected year on year first quarter net profit growth of between 50% and 100%.

CISA reported that mainstream steelmakers created a gross industrial output value of CNY 331.372 billion, up 35.07% YoY, while their total sales revenue reached CNY 359.033 billion up by 36.11% YoY.

It said that February's iron and steel industry gross output value and sales revenue, at CNY 163.892 billion and CNY 175.24 billion dropped by 0.93% MoM and 3.58% MoM. In terms of profit, mainstream steelmakers reported a profit of CNY 10.349 billion up 4.1% YoY and down by 13.87% MoM. Their pre tax income stood at CNY 20.53 billion in February up by 19.2% YoY and 5.41% MoM.

Sinosteel transforms from trader to service provider

China’s State owned Sinosteel Corp over last 15 years has transformed itself from iron ore trader to an integrated steel industry services provider.

Formed in 1993, Sinosteel's businesses now cover metallurgical mining resources exploitation and processing, metallurgical raw materials and products trade and logistics, technical support and equipment manufacturing. Its 2007 sales increased by 83% YoY to CNY 111.24 billion (USD 15.77 billion) and its profit also saw 180% YoY growth.

Mr Huang Tianwen president of Sinosteel Corp, since 2003, said that "We provide full services to steel companies, both in upstream and downstream sectors. As the world's largest steel manufacturer, China has many big steel companies. But in the service sector, no other company in the country can provide the full range of services we do. Globally, I do not know of any big company that covers the business range Sinosteel does."

Mr Huang said the company is focusing on boosting manufacturing facilities like raw material and equipment production to increase service capacity. He said “Last year, it took over Jilin Ferroalloy Co Ltd, China's largest ferroalloy producer. Sinosteel signed four important deals in 2006. Its machinery equipment manufacturing business was bolstered when it took over Jilin Xinye Equipment Co Ltd, Xingtai Mechanical Roll Co Ltd and Hengyang Nonferrous Metallurgical Machinery Co.”

He added that "Now we are preparing for an IPO. We will reinforce our resources development, trade and logistics, engineering, science and technology."

Baosteel to supply 2000 tonnes for World Expo

It is reported that World Exposition Commission of Shanghai has signed one purchasing contract for 2000 tonnes steel production with Baosteel Corp. That is the first agreement between both sides after Baosteel Corp has been the copartner of Shanghai World Exposition.

The contract involved 1000 tonnes each for hot rolling and color coated products. Baoshan Steel Corporation stock distribution center will ensue these supplies. It is estimated that the first batch of supply contract may complete by the end of this month.

The construction of Shanghai World Exposition needs much more steel. The project will reach peak this year, not only the progress of works is tight, the goods supply cycle is short, the construction work is heavy, but also the demand involving hot rolling, the color coated products, hot dip galvanized, the heavy plate, seamless steel pipe and so on are increasing.

Tanggang Q1 net profit likely to be up by 50% to 100% YoY

Tanggang Iron & Steel Company has predicted that its net profit would be up by 50% to 100% on an annual basis in the first quarter of 2008. It achieved the total net profit of the parent company of CNY 464.7 million at the same period in 2007. The detailed data will be announced in the first quarter report of 2008.

It has attributed these results to

1. It strengthened the cooperation of the strategic resources and lowered the purchasing cost of the raw materials.

2. Medium & Heavy Plate Company will be put into production in the first quarter of 2008

3. It increased high added value products by optimizing varieties structure.

4. It strengthened its effort to reduce emission and save energy, and to develop circular economy, optimize major economic indexes.

Chinese thermal coal prices to Japanese utilities to go up by 90%

It is reported recently that, China National Coal Group Corp will negotiate with Japan on 2008 coal contract price.

The officials of China National Coal Group expressed that they will increase the coal price substantially and that the contract price will be higher than the price negotiated between Japan and Australia.

It is estimated that the coal export price of China National Coal Group will be more than USD 130 per tonne up by more than 90% YoY as compared with USD 67.9 per tonne in 2007.

Henggang develops special specification pipe

It is reported that recently, Hunan Valin Hengyang Steel Tube Group has successfully undertaken trial production of 600 tonnes high pressure boiler tubes of 44.5 mm in wall thickness of 7.5mm. Henggang successfully trial rolled some special specification steel pipes which could not be produced before.

It indicates that the ability of Henggang to produce steel tube with the least ratio between outside pathway and pipe wall thickness has reached world top level.

According to reports, the global steel pipe production enterprises can produce steel pipe with the outside pathway less than 45mm but the thickness of pipe wall is not thicker than 7mm.

Guangdong iron ore import in 2 months down by 14.4% YoY

According to data from Guangzhou Customs that Guangdong province imported 1.42 million tonnes of iron ore sand in January to February 208 down by 14.4% YoY. The import value was USD 230 million up by 56.7% YoY and the average import price was USD 163.3 per tonne up by 90.5%.

Guangdong imported 321,000 tons of iron ore from Australia up by 36.9% and taking 22.5% in total import volume.

Experts believe that there are two reasons for the decline of import volume and the hike of import price.
1, Due to strong demand from international iron and steel industry, international supply of iron ore is tight, so the price is rising up continuously.
2. Higher ocean freight also boosts the surge of iron ore import price.

Risks ahead for Chinese nonferrous metal industry

Worldwide economic risks and China's tight economic measures are anticipated to exert negative influence on China's nonferrous metal industry. Credit crunch triggered by the US real estate industry is passing on its influence to developing countries including China, adding risks on nonferrous metal industry from macro economic prospective. Influenced by credit crisis, nonferrous metals in late March 2008 ever experienced price nose dive on international futures market.

Also affected by worldwide crisis, such preliminary products as crude oil, iron ore, copper and alumina are undergoing price rise, pushing up production cost of nonferrous metals. Under such circumstances, international giants hasten acquisition of small metal companies, further reinforcing their monopolistic position but weakening China's enterprises weight on international market.

Domestically, the tight economic measures to be implemented this year will deteriorate the situation for nonferrous metal industry. China has lifted doorsill for entering industries related to manufacture copper, aluminum, lead, zinc, tungsten, tin and antimony in a bid to wash out backward production capacity.

Besides, other factors such as CNY appreciation and tight credit would affect the development of nonferrous industry. Snow disaster that hit southern China this winter brought huge economic losses to nonferrous metal enterprises.

According to statistics, 28 electrolytic aluminum makers suffered more than 1.6 million tons of production capacity. A majority of nonferrous metal enterprises in Hunan province had to halt production. Other heavyweight enterprises such as Jiangxi Copper Corporation, Tongling Nonferrous Metals Group, Daye Nonferrous Metals Company, Jingxi Tungsten Industry Group and Zunyi Titanium were all influenced production.

Miner rescued from central China coal mine

Xinhua reported that, following 30 hours of effort, rescuers pulled out 1 miner alive from a colliery gas outburst in central China's Hunan Province.

Rescuers also recovered 3 bodies at the Zhangjiazhou coal mine in Chenzhou City, raising the death toll to 12. One miner was still missing from the blast that occurred at 6:30 PM local time on Wednesday when 17 people were underground. Three miners managed to escape the scene.

Mr Yan Yinchu the administration vice director said that the rescued miner was pulled from the collapsed shaft at 12:40 AM local time.

The colliery, which was fully licensed, was merged with other mines under the local government's plan to reform its mining industry.

Chinese first nuclear power plant embarks on expansion

According to a source from China National Nuclear Corporation, workers have started to dig a hole for housing one of the two new generating units planned to add at the first phase of the Qinshan nuclear power plant. The excavation work, which began early in March 2008, will be finished by late July 2008.

Two pressurized reactors, the application of the most sophisticated and widely accepted nuclear power technology in the world would be installed at Fangjiashan Haiyan, on the northern coast of Hangzhou Bay, Zhejiang Province, not far from Shanghai. Each generating unit would have an installed capacity of 1 million kilowatts.

The state environmental protection administration, which was promoted to a full ministry known as the environmental protection ministry this year, approved two other reports involving the environmental impact and location safety over the proposed expansion. The 2 generating units will be in place and be made ready for power generation by 2013 and 2014.

The first phase of Qinshan nuclear power plant was the first nuclear power plant on the Chinese mainland built independently by domestic engineers. Construction of the plant began in 1985. It was built with a 300,000 kilowatt prototype reactor with a lifespan of 30 years. It started generating power in 1991. It has so far produced 31 billion kilowatt hour of electricity and generated CNY 9.6 billion in revenue and paid CNY 1.8 billion in tax.

The plant also has second and third phases. Chinese engineers have installed two generating units in the second phase and have been preparing for adding at least two more generating units there. The third phase houses two Canadian CANDU heavy water reactors.

Chinese trade pact to boost Peruvian port development

Mr Alan García president of Peru last week said that the agreement, signed in November, meant China would consider Peru a priority and privileged partner for investments, foreign trade and tourism. Peruvian authorities are anticipating a fivefold increase in the volume of exports to China. China is already Peru's second largest export destination after the US.

Ms Verónica Zavala Peruvian transport & communications minister said that construction work on DP World's Muelle Sur container terminal in Peru's busiest port of Callao would start month. Peru’s Agencia de Promoción de la Inversión Privada and the Autoridad Portuaria Nacional has awarded DP World a 30 year concession to develop and operate a new container terminal in Callao port's 'southern zone'.

Mr David Lemor director of Proinversion said that "We're going to place priority on projects in the Pisco area, such as the port and a highway to the highlands. It's important that the port is competitive so that exporters have lower costs."

DP World officials said that Callao is the largest and fastest growing container port on the west coast of South America with a compound annual growth rate of over 14% per annum. The new facility will initially have two berths. The berths will initially be capable of handling vessels of 5,500 TEU capacity. DP World Callao expects to start operations at Muelle Sur by 2010. Elsewhere in Peru, tenders for a contract to develop and run Peru's northern port of Paita are scheduled to be released this year.

The Peruvian government has also decided to bring forward an auction for the concession to operate Peru's southern port of Pisco. Pisco is a general cargo port, handling liquid natural gas, metals and agricultural produce.

COSCO Shipping 2007 net profit up by 84% YoY

COSCO Shipping Com a specialized equipment carrier under China's top shipper, said that its net profit rose by 84.3% YoY in 2007 on surging transport demand fueled by the booming foreign trade.

The Guangzhou based COSCO in a statement to the Shanghai Stock Exchange said that its net profit reached CNY 1.07 billion (USD 150.7 million) from CNY 583 million in 2006. Operating revenue climbed to CNY 5.33 billion in 2007 up by 38.3% YoY. It said that about 60% of the revenue came from shipping by multi purpose vessels.

Revenue from export shipping surged 44.2% YoY to CNY 2.55 billion, while revenue from import shipping rose by 3.24% YoY to CNY 816.4 million.

It said that the company's transport capacity could not meet the market demand as emerging economies such as China and India boosted the sustained and fast development of the international shipping market. It forecasted that demand will remain strong this year with steady growth in the world economy and trade, despite the lingering sub-mortgage crisis and rocketing international oil prices.

COSCO Shipping currently operates a fleet of 82 vessels, with a total capacity of 1.33 million DWT. In 2007 it signed shipbuilding contracts for eight multi purpose vessels with a carrying capacity of 28,000 tonnes each and two 50,000 tonnes semi submersible heavy lift vessels.

Energy Bureau not to set energy prices – Mr Guobao

Mr Zhang Guobao director of National Energy Bureau at an industry forum in Beijing told media that China's new National Energy Bureau will not seek the right to set energy product prices.

When asked whether the Energy Bureau will be involved setting energy prices, Mr Guobao said that the issue is still under discussion but that the bureau will not seek the right to set such prices. He said that the government is still undecided whether the right to set energy prices should be granted to energy supervision institutions or to pricing supervision institutions.

Mr Zhang said that "The bureau will not seek to set prices, but I think the bureau should be able to propose adjustments to energy prices, or pricing supervision institutions should consult the bureau when prices are adjusted.”

China announced the establishment of the National Energy Bureau earlier this month, with the aim of integrating the energy supervision functions of the National Development and Reform Commission, the Office of National Energy Leading Group as well as the Commission of Science, Technology and Industry for National Defense. The bureau will be responsible for drafting and implementing energy policies and regulations related to the industry.

The National Energy Commission was also established as a senior consulting institution to research and inspect energy development strategies and critical energy issues.

Ukrainian plate prices touching USD 1200 FOB levels

Steel Business Briefing reported that Ilyich is looking at a price of USD 1200 per tonne FOB Black Sea base but little is available as the mill is still catching up with orders placed two months ago.

Alchevsk material is also reported at similar levels.

The report added that the sentiments are that although the prices are already very high, they will continue rising, due to a sheer lack of material and a weakness of the US dollar.

Estar to upgrade welding machine at the Nytva Plant

It is reported that Estar allocated RUB 14 million for the upgrade of a welding machine in the shop No 3 at the JSC Nytva Metallurgical Plant.

As per release a new computer management system has been created at the facility. It said that 10 parameters of the welding process will be controlled and regulated simultaneously and improvement of the facility will allow saving metal on the cutting stage and thus reducing the production costs of the manufactured products.

JSC Nytva produces bimetals, coin section, steel cr band, car assembly components.

InGOK to increase charter fund

Metinvest Group’s OAO Inguletsk Ore Mining and Processing Company on March 21st 2008 held the general meeting of shareholders in Krivoy Rog. The shareholders and their representatives participating in the meeting had the total number of votes 2,745,163,513, which was equal to 99.765154 % of the Charter capital.

A slight increase in the Charter Fund of InGOK and of some other companies of Metinvest Group took place within the framework of completion of one more stage of SCM mining and metal business restructuring process. The changes in the companies’ charter funds are connected with the increase in the number of Metinvest Group companies as the result of recent transactions.

The participants of the meeting made the decision to increase the Charter Fund by means of additional contributions that is by increasing the number of shares at the existing nominal value by UAH2 million to UAH689 mln. 906.4 thousand; the nominal value of one share being UAH 0.25.

The shareholders also made a decision to increase the Charter Fund of OAO InGOK by means of close (private) placement of shares of additional issue with the shareholders of OAO InGOK solely. It was decided not to place the shares with other investors. The shareholders also approved the manner and terms of placement of shares.

In addition, the shareholders made the decision to replace the supervisory board of OAO InGOK by Mr Oleg Koshelenko, Mr Alexander Krivosheyev and Mr Maksim Kladikov.

VMZ bags gold medal from Russian Union of Oil

It is reported that OMK’s Vyska Mining Metallurgical Plant was awarded a gold medal from non profit organization "Russian Soyuz Neftegazostroiteley for participating in the construction of critical facilities and major oil and gas complex in Russia.

Mr Vladimir Markin president of OMK while speaking at the award ceremony said "I am grateful to the Union of Oil for so appreciated Vyksusnkogo contribution to the development of the oil and gas refinery complex of the country. For the first time in the history of the medal, esteemed organization noted tube business and I am pleased that it came to VMZ.”

Mr Vladimir said that VMZ began to supply pipes for the needs of the energy sector even in Soviet times and since the late 90, VMZ is involved in all projects of Transneft and Gazprom.

OMK Chusovskaya receives quality mark

It is reported that OMK’s Chusovskaya Metallurgical Plant has received a certificate for the quality of steel springs manufactured by it. Now, it will be able to use the all quality mark for supply of springs to the carmaker KamAZ and Ural for 3 years.

CMP produces more than 200 types of springs, as well as profiles of more than 100 hot rolled strips for the springs.

ArcelorMittal Temirtau to support social projects in Karaganda

Interfax-Kazakhstan reported that ArcelorMittal Temirtau will be contributing USD 10 million to social development projects in Karaganda oblast in 2008 according to the memorandum sealed with the regional authorities.

Russian GDP growth in February 2008 reaches 8.2%

RIA Novosti Russia GDP growth in February 2008 reached 8.2% as and 7.8% YoY in January to February 2008.

Russian economics ministry in a report said that "The economic growth rate in February was backed by high consumer and investment demand against the background of a rising manufacturing industry.”

Krasnodonugol certified to international safety standard

It is reported that Krasnodonugol has become Ukraine's first coal mining company to get its health and safety management system certified to international health and safety standards.

Krasnodonugol has received OHSAS 18001:2007 certificate from Bureau Veritas. Health and safety management system harmonized to international standards will help Krasnodonugol to significantly improve its performance in occupational injury reduction and ensure maximum safety of its miners.

To meet the international health and safety standard, Krasnodonugol management adopted Health and Safety Policy of the Company in 2007. In 2007, Krasnodonugol allocated almost UAH 35 million for its health and safety measures, 11% higher than a year ago. In 2008, the company will allocate as much as UAH 40 million for the health and safety measures.

Mr Aleksandr Potapenko acting general director of OAO Krasnodonugol said that “To ensure maximum safety of the miners is our prime objective. Health and safety of our miners is our top priority.”

In January to February 2008, occupational injury rates of the company went down by 35.2%. In 2007, number of occupational accidents was down 33% from 2006.

Ukraine affirms gas debt of USD 2 billion

Itar Tass cited Mr Viktor Yushchenko president of Ukraine as saying that Ukraine has not paid for natural gas delivered in 2008 and the debt exceeds USD 2 billion.

Mr Yushchenko told the media that “It is the question of our reputation. We do not need a gas war with Russia. Ukraine needs stability on the gas market.” He said that he expected the Ms Yulia Timoshenko prime minister of Ukraine to resolve gas problems in line with the earlier political agreements.

However Ms Timoshenko prime minister of Ukraine said though that Ukraine could not possibly have such a debt. She said “I was surprised when I heard that sum and immediately read accounting reports. Certainly, we do not and cannot have such a debt. The debt is much smaller, about USD 900 million. Ukraine and Russia are making settlements constantly. They have transit debts, we are paying for gas. This is not a debt, we are waiting for a possibility to transfer money under a contract priced at USD 179.5 per 1,000 cubic meters.”

She added that “ The problem is that we still do not have gas contracts. All we have is an agreement between Russia and Ukraine to keep off intermediaries and stabilize prices. The government has the funds on its hands. It is waiting for contracts to be signed.”

Russia to invest USD 168 billion in geological prospecting by 2020

RIA Novosti reported that Russia's total investment in geological prospecting could exceed RUR 4 trillion (USD 168 billion) by 2020.

The report quoted Mr Yury Trutnev natural resources minister of Russian as saying that the program is to maintain reserve levels by new exploration in 2005/2020. He added that 50% of the program's funds will go to geological prospecting of hydrocarbons, 12% for precious metals and diamonds, 8% for ferrous and non ferrous metals and rare metals, and almost 7% for uranium.

The ministry also asked the government to more than double the program's financing to RUR 544 billion (USD 22.9 billion) and the request has been approved. He added that the program's implementation will help Russia raise the value of its mineral reserves by RUR 197 trillion (USD 8.3 trillion) by 2020.

Nizhnodniprovsky shareholders vote for fund raising

It is reported that at the annual general meeting of Nizhnodniprovsky Pipe Rolling Plant shareholders voted for a 642% charter fund increase to USD 19.8 million. As a result 346.1 million new ordinary shares at USD 0.05 par value will be issued.

The placement will take place at par in two stages from May 19 till June 2nd 2008 and second from June 3 till June 5th 2008.

Shareholders also approved 2007 financials. Thus over 2007 Nizhnodniprovsky Pipe Rolling Plant's net sales grew by 23% YoY to USD 930 million while net income decreased by 23% YoY to USD 85.7 million. It was decided not to allot 2007 income and not pay dividends.

Gazprom considering long term agreements with Russian consumers

Gazprom’s board of directors took into consideration the information dedicated to preliminary results and progress with conclusion of long term agreements for gas supply to Russian consumers over 2008 to 2012.

1. On November 30th 2006 the Russian Federation Government approved proposals allowing supply gas at regulated prices to power plants under five year agreements. The respective minutes of the Government’s Meeting also stipulated that alongside with power plants other industrial enterprises should be switched to long term agreements.

2. On March 6th 2007 Gazprom and UES of Russia agreed on the basic principles underlying long term agreements as well as volumes of supply to power plants under long term agreements. As agreed, the annual volume of gas supplied in 2007/ 2010 to power plants at regulated prices accounts for 105 bcm including 103bcm supplied to UES of Russia. Additional volumes are to be supplied based on a mutual agreement of the parties. The parties achieved the accord that the mainstay of the long term contracts was the take or pay principle coupled with the right of UES of Russia subject to the availability of technical capacity to re distribute uncommitted gas between its power facilities and re-schedule deliveries over subsequent periods.

3. The Directive of the Russian Federation Government dated May 28th 2007, On Improvement of the State Regulation for Gas Prices enabled Gazprom to apply price limits to extra gas volumes while supplying gas to the power industry beyond the agreed volume of 105 bcm. In 2006 the upper level of price limits exceeded the regulated prices 1.6 times, in 2008 they will exceed 1.5 times.

In pursuance of the above stated decisions Gazprom and UES of Russia jointly developed standard long term contracts for power plants as well as a version of a standard long term contract for industrial enterprises. Long term gas supply contracts awarding was a top priority goal of the contract campaign in 2008. As a result, over 66,000 long term agreements were concluded with Russian industrial consumers for supply of 185.4 bcm of gas that constituted 80.4% of the total gas volumes consumed by the industry.