SteelGuru - Archives News

Mr Sajjan Jindal former vice CMD of JSW Steel, after taking over as president of Assocham, said that Indian steel makers will honor their commitment to Dr Manmohan Singh to hold prices for 3 months, but rates will go up thereafter.

He said that "Prices have to go up. We have to go into the global price regime. What can you do if raw material prices have gone up?"

Mr Jindal said that there is a big gap between global and Indian prices. He added that "Today for hot rolled coils, the international price is close to USD 1,200 per tonne. In India, we are selling it at USD 850 per tonne."

He said that the raw material prices, both of iron ore and scrap, are going up. Scrap is being imported at USD 800 per tonne, while the selling price is fixed at USD 850 per tonne. He added that "Either that part of the steel industry will close, creating shortages or price has to go up."

Essar Group has issued a press release on May 30th 2008 indicating that it plans a ground breaking this summer for the USD 1.65 billion mining, processing and steelmaking Minnesota Steel plant.

Mr Ravi Ruia VC of Essar Group said that "We are committed to moving as quickly as possible to bring steelmaking to the iron range. Minnesota Steel plays a key role in our North American steel strategy."

Essar said that it planned to develop the operation that would produce high quality and low cost steel through ore processing, direct reduced iron production and steel making all on one site. Estimated annual production from the plant is expected to be 2.5 million tonnes of steel product.

Essar indicated it will internally finance the entire USD 1.65 billion price tag including technical, managerial and financial resources. It described itself as a USD 50 billion company with assets in steel, energy, power, communications shipping and logistics and construction. Meanwhile, the project’s public face has changed since Essar’s purchase of Minnesota Steel.

BS reported that Punj Lloyd Group has acquired a strategic 74% stake in Technodyne International Limited of UK for an undisclosed amount.

Punj Lloyd, in a statement, said that "This acquisition is a strategic fit and further strengthens Punj Lloyd's existing tankage and terminal business. The acquired capabilities enable it to provide end to end solutions for complete delivery of complex cryogenic, high pressure LNG, LPG, ethylene, ammonia and other similar storage tanks, a significant growth area in oil & gas sector. The capabilities will also be leveraged for design of refinery and petrochemical projects."

Punj Lloyd has been the only company to be involved in all three LNG terminals in Dahej, Dabhol and Hazira in India. It has also completed the cryogenic storage tank package at the Reliance Jamnagar refinery, among other notable tankage projects in South Asia, Asia Pacific and the West Asia successfully in the past.

Technodyne is a specialist engineering, design and consultancy company specializing in large scale cryogenic and high pressure tanks. With projects executed across the world, Technodyne carries out the basic design and detailed engineering for complete steel and steel plus concrete tanks including associated piping, instrumentation and electrical systems.

BS reported that TATA Steel is considering the option of shifting its INR 2,500 crore titanium dioxide projects to Andhra Pradesh or Orissa as it has failed to initiate the process of land acquisition in Tamil Nadu even as a year has gone by since the announcement of the project.

Mr S Asokan head of the project said that "We will talk to the Tamil Nadu government first before taking a decision. The mining project, which was announced in June 2007, needs an estimated 10,000 acres of land. However, the state government has failed to help the company in the land acquisition process."

Initially, sections of the local population, particularly those with strong political leanings, accused TATA Steel of attempting to acquire agricultural land for mining. TATA Steel is now facing trouble in acquiring land since small pieces of land aggregating to its needs are scattered among several hundred owners.

SNS reported that Orissa government’s high level clearance authority, headed by Mr Naveen Patnaik chief minister, has cleared several investment proposals in the state. The proposals for capacity enhancement of capacity from various steel and power companies were also cleared at the meeting

The list includes

1. Essar Steel’s proposal to set up a 6 million tonnes per annum plant and an 8 million tonnes per annum iron ore beneficiation plant. Essar had signed a MoU to set up a 4 million tonnes per annum plant through the sponge iron route. Now, the revised proposal for 6 million tonnes per annum will be through the blast furnace route.

2. Welspun Power & Steel’s proposal to set up a 5 million tonnes per annum iron ore beneficiation plant and a 3 million tonnes per annum pellet plant.

3. 2000 MW thermal plant of Bhushan Energy Limited

4. 1000 MW thermal projects of Monnet Ispat & Energy Limited

5. 1000 MW thermal projects of Visa Power Limited.

6. INR 2200 crore ship building yard & ship repairing project of Apeejay Shipping Limited. The project will come up at the Dhamra Port. Apeejay Shipping had agreed to complete the project within 5 years of acquisition of land.

7. Capacity expansion proposals of SMC Power Generation Ltd, MSP Metaliks and Bhushan Steels were also cleared. The HLCA approved

8. Petrochemicals & petroleum project, one of the five such projects to be developed in India, will be located in Paradip region covering 2 districts of Jagatsinghpur and Kendrapada. Indian Oil Corporation will be the anchor tenant for the project.

It is reported that ABB in India has won orders worth INR 295 crore to provide power solutions for JSW Energy for its upcoming 1200 MW thermal power plant in Ratnagiri in Maharashtra.

The orders are for a range of power solutions including, electrical balance of plant, 400kV gas insulated switchgear substation and generator transformers.

Mr Biplab Majumder country manager & MD of ABB India said that "We are proud of our long standing partnership with the JSW Group. With this order we continue to build on this relationship. ABB’s power products and systems will ensure safe and reliable operation of the plant while optimizing energy consumption of the equipment."

ABB’s solutions for the project comprise several leading edge power technologies for improved system efficiency. The modular environmental business opportunities program solution for 300MW generating units will provide optimized and integrated solutions for complete plant electricals including shunt reactors, bus ducts, control and relay panels, MV and LT switchgear, other auxiliary systems and four 20kV generator circuit breakers, thus providing a further boost towards GCB scheme usages by thermal power plants in India.

The 400kV GIS substation will provide substantial space saving due to its compact design. With all live parts enclosed and protected against negative influences the gas insulated switchgear ensures enhanced operational reliability and safety.

ABB’s scope of delivery also includes 20/420 kV generator transformers. ABB’s transformers are designed and manufactured for high reliability, reduced life cycle costs and optimized electrical design for minimized losses.

ET reported that Larson & Toubro has outbid BHEL for supply of main power equipment for a proposed 1,600 MW power project in Andhra Pradesh.

As per report, against a bid of about INR 2,000 crore placed by BHEL, L&T bid just over INR 1,500 crore.

The project being developed by Andhra Pradesh Generation Corporation at Krishnapatnam would be the first project in India based on 800 MW supercritical thermal generation sets. The total cost of Krishnapatnam project is about INR 8,000 crore.

Mr Jairam Ramesh union minister of state for power said that "The Krishnapatnam project would be the first contract given to a non BHEL domestic manufacturing company. It is a very significant development that would kick start L&T’s own power equipment manufacturing program. India needs to step up manufacturing to keep pace with its ambitious capacity addition program and an additional domestic manufacturer here would definitely help."

According to the Cement Manufacturers’ Association, India’s cement sales in May 2008 have grown up by 7.9% YoY as an increased focus on infrastructure projects has pushed up demand for the building material in India. Cement sales grew to 167.67 million tonne from 155.26 million tonnes in the previous year.

Cement sales of Aditya Birla group rose by 0.8% YoY in May 2008 to 2.66 million tonnes while its production grew up by 2.5% YoY to 2.70 million tonnes. The Birlas’ cement production comes from flagship Grasim Industries and UltraTech Cement, with a combined capacity of more than 31 million tonnes.

ACC said that its January to March 208 quarter sales rose by 7.1% YoY to 5.29 million tonnes. April 2008 production totaled 1.77 million tonnes while sales was 1.74 million tonnes. ACC has the capacity to make 22.4 million tonnes of cement a year.

Shree Cements said that its May 2008 sales grew up by 20.3% YoY to 556,000 tonnes.

The Telegraph reported that Jindal Power Limited has signed a MoU with the Bihar government for setting up a 2,640 MW coal based power plant. Mr Sushil Maroo director of Jindal Power and Mr Aditya Swaroop energy secretary of Bihar have signed the MoU.

The final site of the project would depend on the availability of coal blocks and water.

JPL commissioned 500 MW of 1,000 MW project in the year 2007-08. The third and fourth units of 250 MW each were likely to be commissioned in June and July 2008 respectively.

It is also in process of setting up 2 power plants in the Dumka and Godda areas of Santhal Pargana where the company had been allotted coal blocks.

BS reported that Chinese firm Long Jian Road & Bridge Limited will build an 80 kilometers long two lane road from Theog to Rohru in the Himachal Pradesh's Shimla district. The project will cost INR 228 crore and to be completed in 3 years. Mr Gulab Singh state PWD minister and Mr Li Guangsheng director of Long Jian Road & Bridge Limited have signed the agreement.

Mr Singh said that "The contract envisaged execution of the work in difficult mountainous terrain and harsh climatic conditions. It involves construction of 15 bridges, 280 culverts and 6.5 kilometers high retaining walls, 5.5 kilometers of covered foot path and 30 rain shelters on the 80 kilometers road."

He said that the widening of the road will benefit fruit and vegetable growers of the fertile Shimla district. He added that "The project will be completed within the specified period of 36 months."

BL reported that Maharashtra government is likely to finalize bids for the INR 6,000 crore, six lane Mumbai Trans Harbor Link between Sewri and Nhava Sheva by mid June 2008.

As per report, Maharashtra State Road Development Corporation, which is a nodal agency for the project, is considering the option of asking the consortium of Reliance Energy and Hyundai to pay a surety of INR 5,000 crore.

The state government is reconsidering the consortium's bid on grounds that it had quoted a concession period that was too low and unrealistic. The consortium had quoted a concession period of 9 years and 11 months and was declared the preferred bidder by the state government in February 2008.

BL reported that, in its fourth global acquisition, electrical equipment major Crompton Greaves Limited has bought French power transformers repairing leader Societe Nouvelle de Maintenance Transformateurs for EUR 1.30 million.

Crompton Greaves in a regulatory filing said that the acquisition would help its capabilities in the services segment of its transmission and distribution business. Though Crompton Greaves has been focusing on 3 segments of power systems, industrial systems and consumer products, it is mainly identified with its fans and lighting business.

This is the fourth acquisition for the firm in the international arena. It acquired Belgium based transformer manufacturer Pauwels. Thereafter, it acquired Hungary based Ganz, a leading manufacturer of extra high voltage transformers, gas insulated switchgear and other related components. In 2007, it acquired Ireland based transmission and distribution focused Microsol Holdings Limited and its associate companies.

Sonomatra is engaged in providing on-site maintenance, repair of power transformers, on load tap changers, oil analysis, oil treatment and retrofilling.

BS reported that Industrial Infrastructure Development Corporation is facing serious law and order problem in its developmental work at Kalinga Nagar Industrial Complex in Jajpur district of Orissa.

This industrial complex has been developed by IDCO for facilitating the establishment of mega industries in steel and metal sectors. It has taken up special repair work of old military road near village Ravana lying within the KIC. It faced a major problem last week when one of its supervisors Mr Harmohan Nayak was physically assaulted by some unidentified persons.

The incident occurred when Mr Nayak reportedly pointed out about certain specification deficiency in the work to the field staff of the contractors. He was allegedly assaulted by the field staff of the contractor, who has been entrusted with this work. The local divisional head of IDCO has lodged a FIR with the Jakhapura police station.

The same day, Mr PK Panda junior engineer working with IDCO, was abducted from the work site by a group of people belonging to the nearby village while inspecting the water supply work of Gobarghati rehabilitation colony. He was kept in confinement till he was rescued by the officials of IDCO.

The matter was reported to the superintendent of police, Jajpur by the managing director, IDCO for taking necessary remedial measures.

Sunil Hitech Engineers Limited recently announced that it has awarded Occupational Health & Safety Management System certificate by international certification services DNV on May 23rd 2008. As per report, Sunil Hitech Engineers Limited is amongst the very few companies in the power and infrastructural sector which have been awarded prestigious OHSAS certification 18001:2007.

Mr Ratnakar M Gutte CMD of Sunil Hitech Engineers said that "Sunil Hitech Engineers has emerged as an aggressive player in the power sector. Being an OHSAS company, SHEL should strive to reduce accident and injuries to a minimum through collective involvement knowledge sharing and up gradation of all activities."

Mr Sunil R Gutte joint MD of Sunil Hitech Engineers said that "We are committed to protect the employees and those under the influence from Occupational ill health and injuries."

Sunil Hitech is also ISO: 9001-2000 certified company, specializes in the area of civil, mechanical, fabrication, erection, electrical works pertaining to energy, power sector and other infrastructural projects, testing & commissioning of thermal power plants with high precision quality and timeliness. Sunil Hitech Engineers' list of client includes big players like BHEL, NTPC, Reliance Energy, Jindal Steel & Power, TATA and state electricity board Maharashtra, Chhattisgarh, Madhya Pradesh and Tamilnadu. It also undertakes projects in the transmission and distribution segment.

Ranchi Express reported that Jharkhand State Electricity Board owes INR 950 crore to the Tenughat Vidyut Nigam Limited. While hit by fund church Tenughat Vidyut Nigam Limited is holding up payment to Central Coalfields Limited in turn. The consequence may be worse if Central Coalfields Limited stops supply to TNNL demanding its dues that has spiraled up to INR 157 crore.

Mr DK Singh coal advisor of Tenughat Vidyut Nigam Limited said that "We are holding payment to CCL for coal purchase because we lack funds." He added that it is not in position to pay CCL bills till the Jharkhand State Electricity Board made regular payments on TVNL.

The coal consumption of Tenughat Vidyut Nigam Limited is likely to double once the unit starts generation. The unit is expected to start generation from June 12th 2008 after a gap of one year.

Meanwhile, the CCL Board has referred the matters of coal ministry after repeated reminders.

BL reported that the much delayed plan of deepening the approach channel of the Jawaharlal Nehru Port Trust will be taken up in a pre Public Investment Board meeting this week.

Mr SS Hussain chairman of JNPT said that it plans to dredge the channel and increase the draught from 12.5 meters to 14.5 meters to be able to handle 6,000 TEU vessels.

He added that some of the important projects would include deepening of the approach channel, purchase of new cranes, deepening of the shallow berth and possibly setting up of a fourth container terminal pending for a long time.

JNPT had handled 55 million tonnes of cargo in 2007-08 fiscal as against 44 million tonnes in 2006-07 fiscal. The total container traffic was 51 million tonnes as against 40 million tonnes, dry bulk cargo was recorded at 740,000 tonnes as against 610,000 tonnes, liquid bulk stood at 316,000 tonnes as against 337,000 tonnes and break bulk was 56,000 tonnes as against 14,600 tonnes.

For current financial year, JNPT plans to invest INR 200 crore on its capacity expansion plans. It has earlier announced a CAPEX of INR 7,000 crore to be invested over a period of 5 to 6 years on its 32 ongoing projects which would enable it to handle more capacity of cargo and bigger ships.

BL reported that Cochin Shipyard Limited created history on June 2nd 2008 by simultaneously launching 5 platform supply vessels for different owners. The ships launched were the 7th in a series of 8 ships under construction for Deep Sea Supply of Norway.

The platform supply ships, which were launched on June 2nd 2008, are of the popular UT-755 L design for the offshore industry. The vessel is designed for satisfying the specific demands for transport of deck cargo, pipes, liquid cargo and cement or barite among others, and unloading to rigs, production platforms and pipe laying barges among others. They are the workhorse of the offshore oil field industry which acts as a lifeline carrying operational supplies and stores to far off installations.

The ship is built and classified under the most stringent rules and regulations of Det Norske Veritas and is classed for unmanned engine room and dynamic positioning. The vessel also satisfies ‘CLEAN’ notation of DNV, which signifies high standards of environmental safety.

It is reported that about 13,000 contract workers of Neyveli Lignite Corporation has began an indefinite strike to press their charter of demands including regularization of services.

Their other demands include provision of housing, medical and transport allowances and bonus.

Mr Kuppuswamy president of All India Trade Union Congress said that the strike would continue till the demands are implemented.

It may be noted that, on March 29th 2008, contract workers went on indefinite strike but following intervention of Mr Arcot Veeraswamy Tamil Nadu power minister, the strike was called off after 12 days.

Meanwhile, workers said that despite the minister's assurance, their demands have not been implemented. Hence they decided to go on indefinite strike.

GAIL (India) Limited has recently floated a 100% subsidiary called GAIL Gas Limited to take up city gas distribution projects in 17 cities in the first phase. It has identified 230 cities for city gas distribution projects in phased manner.

The city gas distribution in the first phase will be taken up through its subsidiary company, in authorization from Petroleum & Natural Gas Regulatory Board. The subsidiary company has already been registered with an initial equity of INR 200 crore. Corresponding to this equity amount, debt shall be arranged amounting to INR 300 crore.

GAIL Gas will also take up the compressed natural gas corridor project, which involves an estimated capital outlay of INR 35 crore for setting up CNG stations along the highways.

Exim News Service reported that Mumbai based Zoom Developers is reported to have moved the Kerala High Court against the state government’s decision to disqualify its consortium from bidding for building the international container transshipment terminal at Vizhinjam. The Court is expected to take a decision on the issue next week.

An official of Zoom Developers said that "There was a mistake on the part of those who did valuation of the bidding documents. They did not interpret the agreement properly because of which we were disqualified from bidding. For the project bidding, Zoom Developers has joined hands with Portia Management Services and the UK’s Peter Fraenkael and Partners."

He added that Zoom made a representation to the government and along with it went to the court seeking removal of the disqualification.

According to a Zoom Developers statement, the disqualification was not good for the image of our company and we wanted to remove the stigma attached to it.

However, an official of the Vizhinjam International Seaport Limited said that the committee entrusted with the job of scrutinizing the bidding documents found some discrepancies in the bid documents submitted by Zoom Developers and hence the consortium was disqualified from bidding in the second round.

It is reported that Suzlon Energy is among 6 others who have signed an agreement with the US government to help the country generate 20% of its electricity using wind power by 2030. The pact may aid Suzlon win more orders for power equipment and improve manufacturing technology.

As per report, US Department of Energy has signed a MoU with GE Energy, Siemens Power Generation, Vestas Wind Systems, Clipper Turbine Works, Suzlon Energy and Gamesa Corporation to improve industrial wind power manufacturing capabilities.

The 6 companies will collaborate to improve the quality of turbine components and to reduce installation and operating costs. Further, the partners, along with the US Department of Energy, will address environmental and technical issues and develop standards for turbine certification and grid connection.

Suzlon has already captured over 8% of the US wind energy market in the recent 2 to 3 years. It has received a supply order of 600 MW in 2 years from Horizon Wind Energy of Texas.

US is the fastest growing wind energy market in the world with 30% annual growth in the last 5 years and with over 25% of the global installed capacity. In 2007, its cumulative wind energy capacity reached 16,818 MW with more than 5,000 MW of wind power capacity added in 2007 at an investment of USD 9 billion. Wind power is the second largest new power generation source in the US now after natural gas.

BS reported that, as Indian tyre manufacturers reel under the high prices of raw materials like natural rubber, crude oil and carbon black, they face a tough challenge from China even as its exports to India climbs multi fold.

According to data provided by Automotive Tyre Manufacturers Association, from 39th rank in 2002-03, India climbed to the 3rd position in 2007. During April 2007 to February 2008 period, Indian imports from China surged almost two fold to 1.2 million units from 660,000 units. The Indian tyre market comprising tyres of cars, UV, OTR, trucks and buses, is worth INR 20,000 crore currently.

Mr Rajiv Bhudhraja director general of ATMA said that "The average price of a pair of Chinese truck tyre is about INR 7,500, which is significantly lower than Indian prices which retail at about INR 13,000 to INR 15,000. More than 100,000 Chinese tyres are imported every month, totaling to about INR 900 crore yearly. More alarming is the fact that people have changed their perspective about products from China, which was once thought to be sub standard."

He added that "China has been able to sell radial tyres at such lower rates to India because of the very low cost of manufacturing in that country and also due to under voicing the imports and selling them without paying VAT here. In addition, China has huge capacities of radial tyres."

The domestic tyre market consists of leading players like MRF followed by Apollo, Bridgestone, CEAT, JK Tyres, Michelin, Goodyear, among others.

Adhunik Metaliks has posted net profit of INR 21.90 crore for the January to March 2008 quarter up by 2.9% YoY as compared to INR 21.58 crore during January to March 2007 quarter. Net sales for the quarter surged by 66% YoY to INR 311.92 crore as compared to INR 188.03 crore.

For year ended March 31st 2008, net profit rose by 3.85% YoY to INR 80.45 crore as against INR 77.47 crore for the year ended March 31st 2007.

In a separate press release, Adhunik Metaliks has informed that its board has approved initial public offer of its 100% subsidiary Orissa Manganese & Minerals. The board of directors has also declared a dividend of 12% for the financial year ended March 31st 2008.

Kalinga Times reported that Orissa based National Aluminum Company Limited has drawn up ambitious growth plans involving massive investment of around INR 40,000 crore in next 5 years. The proposed investments would be made in alumina smelter and power projects in Indonesia, South Africa and Iran and Brownfield and Greenfield growth projects within India.

Nalco, which now enjoys more managerial powers and commercial autonomy to chart its own course in the world market, has decided to start its third phase expansion after the completion of the second phase expansion work. The second phase expansion is under implementation at an investment of INR 4092 crore and the same is scheduled to be completed by 2008 end.

Now, plans are afoot for 3rd phase expansion, which is likely to entail expenditure to the tune of INR 6000 crore. Under this expansion, the bauxite mining capacity shall be enhanced to around 90,000 tonnes, alumina refining to 30,000 tonnes, aluminum smelting to 630,000 tonnes and power generation to 1700 MW per annum. The proposed third phase expansion is likely to entail an expenditure to the tune of INR 6000 crore.

Besides, Nalco also has plans to set up at least two new projects in India. A mines and refinery complex is being planned in Andhra Pradesh in which the bauxite mines capacity will be 4.2 million tonnes, while the refinery will have a capacity of 1.4 million tonnes. The draft MoU for the project is under negotiation with the Andhra Pradesh government and the project will involve an investment of INR 7000 crore.

About overseas project, Nalco has already signed a MoU with Indonesia to set up a 500,000 tonne smelter and a 1250 MW captive power plant. It plans to invest around INR 14,000 crore in this Greenfield project. Besides, it is exploring the possibilities of setting up a smelter and power plant in South Africa at an investment of around INR 16,000 crore.

In Iran, a 310,000 tonne smelter has also been planned, in two phases, as a JV with ALPHA. The MoU for the project was signed in March 2008. The project cost will be approximately INR 8000 crore.

Exim News Service reported that three port projects at Inchudi, Bahabalpur and Chandipur in north Orissa are awaiting a green signal from the union defense ministry.

Mr Jayanarayana Mishra transport & commerce minister of Orissa said that the state government is scouting for ways to avoid the restricted areas while going ahead with the port projects. He added that the state government would study the recommendations made by IIT, Chennai, on how to avoid restricted sites and develop the ports at places earlier identified by it.

The Orissa government is striving to develop about a dozen small ports along its 480 kilometers long coastline. But, it faces hurdles from not only the defense ministry, but also some environmental organizations citing danger to the existence of rare sea creatures.

While the state government has identified at least 13 locations for developing ports, the sites are yet to get clearance from the defense & environment ministries.

According to the McKinsey & Company’s Electric Power & Natural Gas Practice study, with soaring crude oil prices, the time has come for the Indian power sector to explore substitutes. If India continues to grow at an average rate of 8% for the next 10 years, power demands may rise from the present 120 GW to 315-335 GW by 2017, 100 GW higher than current estimates.

The study said that India is gradually progressing towards a service led economy from an agrarian economy. Supply and production have increased but demand has doubled. It added that the demand can only be met through a 5 to 10 fold rise in power production. This means investments in the power sector will increase over USD 600 billion in the next 10 years.

Consumer demand across rural and urban sectors is growing at 14% over the next 10 years, whereas India’s GDP growth is just 8% a year. The second reason is the government’s plan to provide electricity to everyone by 2012. This means 23 million below poverty line households should be added in the power grid. The third reason is the 24X7 supply of electricity to consumers and the industrial demand to switch to expensive diesel based power.

When the demand rises to 335 GW, India’s power sector will have to generate 415 to 440 GW for plant availability adjustments and 5% spinning reserves. Adding 300 GW by 2017 will mean increasing the annual capacity by 30 GW against the current growth capacity of 9 GW.

The McKinsey & Company’s report, however, said that India will be able to add only 160-180 GW by 2017 even in case of best development trajectory. If these estimates are to be broken, India needs to increase its capacity at a fast pace.

It is reported that Steel Authority of India’s Salem Steel Plant, under its corporate social responsibility, had organized a free medical camp at Karumandurai in the Eastern Ghats on June 1st 2008. Dr TN Muralidhara, chief of medical & health services at SSP had inaugurated the camp.

A team of doctors from SSP supported by para medical crew conducted the camp. Medical cards were issued to the patients giving personal details such as name, age, sex, address etc and medical information such as weight, blood sugar level, blood pressure reading, diagnosis of the ailment, treatment given along with medical advice.
A total of 540 patients benefited from the medical camp and a total of 27 patients have been identified for further treatment at SSP’s main hospital free of cost.

The US International Trade Commission determined that revoking the existing countervailing duty order on carbon and certain alloy steel wire rod from Brazil and the existing antidumping duty orders on imports of that product from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago and Ukraine would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time, but that revoking the existing antidumping duty order on imports of that product from Canada would not.

As a result of the Commission's affirmative determinations, the existing orders on imports of carbon and certain alloy steel wire rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago and Ukraine will remain in place.

As a result of the Commission's negative determination, the existing order on imports of that product from Canada will be revoked.

The Trade Commission said that “With respect to Brazil, Indonesia, Moldova and Ukraine, all six Commissioners made affirmative determinations. With respect to Trinidad and Tobago vice chairman Shara L Aranoff and Commissioners Charlotte R Lane, Irving A Williamson and Dean A Pinkert voted in the affirmative; Chairman Daniel R Pearson and Commissioner Deanna Tanner Okun voted in the negative. With respect to Mexico, Vice Chairman Aranoff and Commissioners Okun, Lane, Williamson and Pinkert voted in the affirmative; Chairman Pearson voted in the negative. With respect to Canada, Chairman Pearson, Vice Chairman Aranoff and Commissioners Okun and Williamson voted in the negative; Commissioners Lane and Pinkert voted in the affirmative.”

BNamericas reported that mining giant Vale is committed to building a new 2.5 million tonne to 5 million tonne per year steel mill in northern Brazil's Pará state regardless of whether it secures a partner.

Mr Roger Agnelli president & CEO of Vale said that the project is still in the feasibility study phase. He added that at the First Brazilian Steel Gathering organized by steel institute IBS in Rio de Janeiro.

Mr Agnelli said that "We are building a plant with or without partners. Northern Brazil also needs steel."

Mr Agnelli also mentioned that Brazil as the best place to produce steel today due to its abundant iron ore mines. Vale is the owner of the Carajas iron ore mine, which churns out some 100 million tonne per year.

According to Mr Paolo Rocca chairman of Tenaris and vice chairman of the International Iron and Steel Institute, global steel demand will begin to slow in three years because of unsustainable price increases for iron ore and other raw materials.

Mr Rocca said that steel demand will continue to grow at around 6% a year through 2010, before slowing to about 4.5% in 2011 to 2015. He added that prices of iron ore, the main steelmaking ingredient, have quadrupled and coking coal has risen sixfold since 2003.

Mr Rocca said that “No financial system can sustain this inflationary pressure. The world has reached a limit on availability of non renewable resources.''

Nikkei News paper said that Japan's steel and power industries have agreed to talks with the government on a so called cap and trade system to reduce greenhouse gas emissions.

The paper said that Japan Iron and Steel Federation and the Federation of Electric Power Companies have now agreed to talks with the government on the system.

Under the cap and trade system, companies that produce too much greenhouse gas must buy permits from companies whose emissions are below the limit.

Nikkei reported that steelmakers and utilities have previously opposed introducing the system saying it would hurt investment and reduce Japan's global competitiveness. It said that both groups oppose mandatory emission caps and are asking for more flexible targets.

It is reported that the Greek steel products group Sidenor will pump EUR 400 million over the next five years in its Bulgarian steel making unit Stomana Industry.

Mr Sarados Milios Sidenor board member said that the deployment of the investment will be conditional on the allocation of additional greenhouse emission quotas under the Kyoto Protocol.

The investment plans have been prompted by the creation of a joint venture with Nucor of the US which will provide vast market opportunities for the Greek company.

Stomana Industry, which ships 80% of its output abroad, controls 52% of the domestic market for steel products. In 2007, the company manufactured 800,000 tonnes. The newly opened unit for long products, which cost EUR 80 million, will double the output capacity of the steel maker.

The United Steelworkers announced that it has reached a groundbreaking agreement with ArcelorMittal to improve health and safety standards throughout the company. The global agreement covers ArcelorMittal workers represented by unions throughout the world.

In addition to recognizing the vital role played by unions in improving health and safety conditions, the unprecedented agreement establishes universal minimum standards at every site the company operates. Many safety improvement measures such as plant specific joint management union health and safety committees are standardized, and training and education programs are instituted in order to immediately address current health and safety issues in North America and elsewhere in the company.

The agreement also included the creation of a joint management union, global health and safety committee that will target plants in the group in order to work to dramatically improve their performance.

Mr Leo W Gerard president of USW International said that "This agreement is an obvious signal to companies everywhere that unions are vital to safe and healthy workplaces. It is the most important issue for our members and we are pleased to be able to come to this agreement with the world's number one steel company."

Mr LN Mittal CEO of ArcelorMittal said that "This agreement will build on the work that we have already undertaken in the company. Health and safety is our number one priority and in signing this agreement we hope to set a new benchmark for the industry."

The USW represents 850,000 workers in North America. Approximately 20% of them work in the steel industry.

BNamericas reported that Venezuelan steelmaker Sidor has added 890 subcontracted employees to its payroll as part of a collective contract agreement reached with the government in May.

Mr José Meléndez secretary of Venezuela's steelworkers union Sutiss told BNamericas that "This is to comply with the specifics of clause 97 of the collective contract which establishes that 1,300 employees must be incorporated within one month.”

He explained that however, the agreement does not call for all of Sidor's external workers to be contracted. Only the ones directly involved in the production process will be integrated.

In May, Sutiss signed the collective contract with Venezuela's government for employees at Sidor where they received a pay raise of VEB 53 per day (USD 24.70), among other improvements.

VNS reported that two architecture students in HCM City have won first prize in the 2008 BlueScope Steel Vietnam Design Award for their multi function bus station plan.

Mr Vu Ngoc Hai and Mr Nguyen Tan Loc beat 300 other competitors who submitted 200 designs for a bus station at Ben Thanh Market and a traffic toll station.

The duo’s Saigon Combination of Past and Present design features a harmony between modernity and tradition through the use of color plated steel and a plaited structure.

Dr Le Quang Quy deputy rector of the HCM City Architecture University said that "The contest not only promotes ideas and plans but also serves as a bridge between the training work of our university and the reality of the architecture industry.”

The Australian steel company held its first contest last year when 200 students submitted 68 designs.

The US International Trade Commission has voted to institute an investigation of certain automotive parts. The products at issue in this investigation are various parts of the Ford Mustang.

The investigation is based on a complaint filed by Ford Global Technologies, LLC of Dearborn on May 2nd 2008. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States of certain automotive parts that infringe patents owned by Ford GTL. The complainant requests that the ITC issue an exclusion order and a cease and desist order.

The ITC has identified the following as respondents in this investigation:
1. Keystone Automotive Industries, Inc of Pomona
2. LKQ Corporation of Chicago
3. US Autoparts Network, Inc of Carson
4. Jui Li Enterprise Co. of Taiwan
5. YCC. Parts Manufacturing Co Ltd of Taiwan
6. TYC Brother Industrial Co Ltd of Taiwan
7. Taiwan Kai Yih Industrial Co Ltd of Taiwan
8. TYG Products, LP of McKinney

By instituting this investigation, the ITC has not yet made any decision on the merits of the case. The case will be referred to the Honorable Theodore Essex and the ITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation.

Newell Recycling announced that it has been granted final approval and received all necessary permits to build and operate a shredder facility at the Savannah in Georgia area. The facility is expected to be opened by the end of this year.

Newell Recycling of Savannah, LLC is expected to initially employ 75 people in Garden City, with plans for around 100 employees once the plant is fully operational. It said that the Savannah operation, the company’s third shredder plant and eleventh location overall will feature a 6000 horsepower Newell MegaShredder

The company held a grand opening at the 40 acre site the middle of last month. The company has made an initial investment of USD 17 million and has asked for no tax abatements. In keeping with the corporate tradition of environmental responsibility, Newell Recycling is preserving many specimen trees on the site, while planting nearly 100 new trees on the property.

(Sourced from Recycling Today)

Star Bulk Carriers Corp announced that it has entered into a definitive agreement to acquire the Capesize bulk carrier Falcon Cape, of 150,940 DWT built in Japan in 1991 for approximately USD 87.2 million. The acquisition will be financed through a combination of company cash and bank debt. The vessel is to be renamed Star Ypsilon and is scheduled to be delivered to Star Bulk within August/September 2008.

The vessel will enter into an approximately 34 month time charter to TMT as of the time of the vessel's delivery to Star Bulk at a net daily rate of USD 112,600 for the first 10 months, USD 93,300 for the following 12 months and USD 74,100 for last 12 months in replacement of the Star Iota which has been committed to be sold.

The vessel is being acquired from a company affiliated with Oceanbulk, which intervened to facilitate the transaction at the same price it acquired the vessel from Dutch interests. No commissions are to be charged either on the sale or the chartering of Star Ypsilon.

Mr Akis Tsirigakis president & CEO of Star Bulk said that "We are pleased to have made an acquisition with a contracted revenue of approximately USD 93 million exceeding the vessel's purchase price. It is not commonplace to source such deals."

Following this acquisition, Star Bulk's fleet will increase to thirteen vessels of approximately 1,184,835 DWT. With the addition of the Star Ypsilon the contracted fleet operating days under time charter in 2008, 2009 and 2010 will be 100%, 84% and 63% respectively.

The Hungarian Central Statistical Office reported that Hungary freight forwarders carried 70.10 million tonnes of goods in the first quarter of 2008 down by 2.2% less than in 2007, but their output in terms of freight tones kilometers rose by 1.9% to 12.83 billion in 2007.

The Statistical Office said that rail transport volume dropped by 9% YoY, the road transport volume fell by 1.1% YoY, the waterway transport volume dipped by just 0.1% YoY and pipeline transport volume rose by 1.6% compared to the corresponding period of 2007.

Calculating in freight tones kilometers, rail transport was down by 5.7% YoY, while road transport was up by 4.3% YoY, water transport by 1.9% YoY and pipeline transport by 1.5% YoY.

Linde AG's at the Annual General Meeting the shareholders' representatives were elected in rotation for the new Supervisory Board, which has been reduced in size from 16 to 12 members.

At the constitutive meeting immediately following the Annual General Meeting, the Supervisory Board members confirmed the appointment of Dr Manfred Schneider as Chairman of the Supervisory Board. Dr Schneider has been a member of the Linde AG Supervisory Board from May 29th 2001 and Chairman of the Supervisory Board from May 27th 2003.

Composition of the newly elected Linde AG Supervisory Board for the period of office to 2013
1. Dr Gerhard Beiten
Dr Clemens Börsig
3. Mr Michael Diekmann
4. Mr Matthew FC Miau
5. Mr Klaus-Peter Müller
6. Dr Manfred Schneider
7. Mr Gernot Hahl
8. Mr Thilo Kämmerer
9. Mr Hans-Dieter Katte
10. Mr Jens Riedel
11. Mr Josef Schregle
12. Mr Wilfried Woller

The following members retired from the Linde AG Supervisory Board: Dr Karl-Hermann Baumann, Gerhard Full, Professor Dr Jürgen Strube shareholders' representative, Siegried Friebel and Josef Schuhbeck as employees' representative.

The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide. In the 2007 financial year it achieved sales of EUR 12.3 billion.

Bizedge.com reported that Master Builders’ Association of Malaysia while has called for the removal of the 10% levy imposed on imported cement.

Mr Patrick Wong president of Master Builders’ Association of Malaysia said the levy could only mean higher costs for the construction industry. He said that “This 10% tax does not make sense, as it contradicts the Asean Free Trade Area rule, where cement will only be taxed at 5% and 0% come 2010.”

He added that “Portland cement, which is no longer under price control, makes up the bulk of cement used in the local construction industry, hence the removal of the levy would help reduce our costs. This is unlike the liberalization of the steel industry which does cover many categories of steel.”

Malaysian government has recently lifted the ceiling prices for cement.

Tenaris SA in its annual general shareholders meeting approved the re election of the current members of the board of directors, with the exception of Mr Bruno Marchettini who did not stand for re election and the election of Mr Alberto Valsecchi former COO to serve as members of the board of directors until the next annual shareholders' meeting, which will be held in June 2009.

Tenaris board of directors subsequently confirmed Mr Amadeo Vázquez y Vázquez, Mr Jaime Serra Puche and Mr Roberto Monti as members of the Company's audit committee, with Mr Vázquez y Vázquez to continue as chairman. All three members of the audit committee are independent directors.

Tenaris also re appointed PricewaterhouseCoopers as its independent auditors for the 2008 fiscal year

American Iron & Steel Industries reported that in the week ending May 31st 2008, US’s raw steel production was 2.114 million net tons while the capability utilization rate was 88.6%. Production was 2.121 million net tons in the week ending May 31st 2007, while the capability utilization then was 88.4%. The current week production represents 0.3% decrease from the same period in 2007.

Production for the week ending May 31st 2008 is down 1.2% from the previous week ending May 24th 2008 when production was 2.140 million net tons and the rate of capability utilization was 89.7%.

Adjusted YTD production through May 31st 2008 was 45.990 million tons at a capability utilization rate of 88.8%. That is a 3.0% increase from the 44.641 million net tons during the same period last year, when the capability utilization rate was 85.1%.

District wise production for the week ending May 31st 2008
1. Northeast Coast: 166
2. Pittsburgh/Youngstown: 214
3. Lake Erie: 85
4. Detroit: 92
5. Indiana/Chicago: 530
6. Midwest: 261
7. Southern: 672
8. Western: 94
(In thousands of net tons)

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months

Steel company Esmark Inc said that it has been unable to refinance its debt on a long term basis, raising substantial doubt about its ability to continue as a going concern.

Esmark said that the statement was required by a Nasdaq rule.

It was prompted by Esmark's annual report on Form 10 K filed on May 20, which included an explanatory paragraph from the company's accounting firm.

Last week, Russian metals and mining company OAO Severstal commenced its USD 17 per share tender offer for outstanding common stock of Esmark.

Severstal's bid worth about USD 1.24 billion is backed by the United Steelworkers union, which had threatened to block an earlier offer to buy Esmark from India's Essar Steel Holdings.

Reuters reported that Japan's fair trade watchdog slapped Nippon Steel Corp, JFE Steel Corp and Kubota Corp with a fine for price fixing, bringing the industry under fresh scrutiny after admissions of lax product testing.

As per report, the Fair Trade Commission ordered the three to pay JPY 2 billion for fixing product prices, but it exempted Sumitomo Metal Industries Ltd which reported the cartel to the government agency.

The Fair Trade Commission said that the four had agreed to raise prices for steel posts used in engineering works by a certain margin in 2004 and 2005.

The Japanese industry is already in the spotlight due to quality control concerns after Japan's largest steelmakers, Nippon Steel and JFE Steel, a unit of JFE Holdings Inc, said they had failed to carry out some tests on some of their products.

Ap reported that two steel mill workers weren't seriously injured after a crane they were working on collapsed during a storm in Maryland.

Lt Pierre Thode with the Baltimore County Fire Department said that the men climbed down a ladder under their own power around 4:45 PM. The crane went down shortly after 4 PM. The men were working to unload materials from a barge.

Mr Thode added that the men weren't pinned down in the crane, but their ladder gave way when it collapsed, leaving them with no way down. A fire truck with a long ladder came to the rescue. The men were not taken to hospitals.

The collapse occurred at the Sparrows Point steel mill, which is owned by Russian steelmaker OAO Severstal

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis data, the American Iron and Steel Institute reported that steel import permit applications for the month of May totaled 2,393,000 net tons. This was a 20% decrease from the 2,988,000 permit tons recorded in April 2008 and a 19% decrease from the April preliminary imports total of 2,944,000 net tons.

Import permit tonnage for finished steel in May was 1,916,000 net tons a decrease of 13% from the preliminary imports total of 2,194,000 net tons in April.

For the first five months of 2008 total steel imports were 13,058,000 net tons, down by 12% from the 14,772,000 net tons imported in the first five months of 2007. Total steel imports for 2008 would annualize at 31.3 million net tons or 6% below the 2007 12 month total.

For May 2008, the largest finished steel import permit applications for offshore countries were

1. China 285,000 net tons
2. Korea 184,000 net tons
3. India 123,000 net tons
4. Japan 113,000 net tons
5. Germany 77,000 net tons

Finished steel import permit applications for China increased 58 % in May compared to April preliminary imports and were the highest monthly total for 2008 so far.

Product categories that increased in May vs April preliminary include: 1. Hot Dipped Galvanized Sheet & Strip up by 80%
2. Oil Country Goods up by 26%
3. Heavy Structural Shapes up by 9%
4. Tin Plate up by 37%
Significant products that showed a year to date increase vs. 2007 include:
1. Oil Country Goods up by 18%
2. Line Pipe up by 16%

Mr Andrew G Sharkey III president & CEO of AISI said that “Of particular concern are the sharp increases in monthly imports from China and in galvanized sheet, where imports from China were more than one fourth of total imports of this high value product.”

The Board of Directors of the American Iron and Steel Institute have elected Mr Keith E Busse chairman & CEO of Steel Dynamics Inc to a one year term as chairman of the Institute. Mr Busse was sworn in as chairman at the Board’s spring meeting at Scottsdale in Arizona on May 4. He will succeed Mr Ward J Timken Jr.

Mr Brusse in his role as chairman, he will speak out on issues, such as climate change and trade, representing the industry on those and other important public policy issues. He has previously served as vice chairman of AISI and as chairman of the Institute’s Finance Committee.

Mr Busse said that “I am honored to serve as this year’s chairman in what I see as a crossroads year for both our industry and the Institute.” He added that “My vision for this pivotal year is to see us move forward on the high road, achieving new successes in our quest for sustainability, and finding common ground to make our voice a unified voice heard in the halls of Congress louder than ever before.”

Mr Andrew G. Sharkey III president & CEO of AISI said that “I welcome Keith’s leadership and willingness to serve the industry at a time of continuing change in the global steel industry and in America’s political landscape, a major transitional period that will impact the industry. His skills will serve us well in our efforts to speak out with a unified voice on behalf of the North American steel industry.”

The Swedish Supreme Court has rejected Zürich's appeal regarding insurance compensation to SSAB. The judgment delivered by Svea Court of Appeal is thereby confirmed.

As earlier announced, on January 25th 2008, Svea Court of Appeal delivered a judgment according to which the insurance company, Zürich Insurance, Sweden Branch was ordered to pay SSAB's wholly owned subsidiary, SSAB Tunnplåt AB additional insurance compensation of approx SEK 161 million as well as interest and compensation for litigation costs relating to a blast furnace breakdown which occurred at the company's plant in Luleå in 1997. Including accrued interest, the awarded compensation totaled approx SEK 302 million, excluding compensation for litigation costs.

The release added that “Zürich Insurance, Sweden Branch has appealed against the judgment to the Swedish Supreme Court, which according to a decision dated June 2nd 2008, rejected the appeal. Consequently, the judgment delivered by Svea Court of Appeal is thereby finally confirmed. In addition to the insurance compensation awarded according to the judgment, approx. SEK 110 million has already been paid out in compensation as a consequence of the breakdown. The final judgment has a positive impact on SSAB's earnings in the amount of approx SEK 260 million.”

It is reported that Essar Group has expressed its keenness to invest in Pakistan's economy, especially in the energy, steel and shipping sectors. The offer was made by Mr Sashi Ruia chairman of Essar Group during a meeting with Mr Yousuf Raza Gilani prime minister of Pakistan, who said Pakistan is open to business and foreign direct investment.

Mr Gilani said that almost all sectors of Pakistan's economy allow FDI, which is fully protected under the country's laws and there is no discrimination between foreign and local investment as no government sanction is required in either case. He added that "Since Pakistan is deficient in electricity, it would welcome investment in power generation, especially in developing the Thar coal reserves."

Mr Ruia told Mr Gilani that Essar group has made investments across the world and would be keen to invest in energy, steel and shipping sectors.

Mr Asif Ali Zardari co chairman of Pakistan People's Party, whose party heads the ruling coalition, has been pushing for greater business ties with India to drive economic growth within his own country. He recently offered to set up economic zones along the border with India and to source gas and fuel supplies for India. Mr Zardari has also suggested that India and Pakistan could collaborate to exploit the Thar coal reserves in Sindh province for generating power that could be supplied to both countries.

Daily Star Egypt reported that Mr Hisham Talaat Moustafa chairman of General Section of Real Estate Investment has lauded Egypt government’s recent decisions taken to cool rapidly spiraling prices.

Mr Moustafa said that "I believe the government introduced effective procedures to contain the relentless leaps in prices of construction material including the cement export ban and steel price caps."

He pointed out that after the government banned cement exports, prices slid back to around EGP 500 per tonne as compared to the previous EGP 700 to EGP 800 per tonne. He added that "The same is true for steel, placing price limits on wholesalers and retailer has helped push prices down."

It may be noted that, since the beginning of the year, a series of upsurges raised construction costs in Egypt some 30% pressured by continued spikes in input costs such as iron ore, scrap metal, billets and coal.

Record high price leaps brought steel prices to roughly EGP 7,800 per tonne and cement to nearly EGP 800 per tonne. Hikes in production prices have prompted the ministry of trade & industry to ban cement exports in late March 2008. The government also amended last April customs duties and lifted tariffs on cement and steel.

Mr Moustafa said that GSREI would not overlook escalating prices in steel and cement that will eventually affect not only the building and construction industries, but also domestic economy and society in general. He particularly named Al Ezz Steel Rebars prices as being cheaper than international ones despite angry accusations the heads of the two companies exchanged in April over their respective annual financial results.

Oman Observer reported that Omani government has signed a MoU with Port of Salalah for the construction and operating of 3 additional deepwater container berths, which will give the port a total of 9 berths totaling 3,555 meters in length.

Mr Gary Lemke CEO of Port of Salalah said that "The signing of this MoU is a clear indication of the government's intent to be at the forefront of regional port development and will enable the Port of Salalah to keep up with the growing demands and allow us to meet our customer expectations as a modern and efficient terminal."

As per report, berths 7, 8 and 9 are the first stage of terminal two and will encompass 1,350 meters quay wall and add additional 3 million TEU to the annual capacity. Berth 7 is expected to be operational in the first quarter of 2011, with berth 8 and 9 scheduled for completion in 2012.

Terminal 1 comprises 6 berths along 2,205 meters of linear berth operated with 17 super post Panamax gantry cranes. Additional 8 super post Panamax cranes and 4 mobile harbor cranes are on order. With the delivery of the new equipment, the capacity of berth 1 to 6 increases from 4.5 to 6 million TEU. The completion of Berth 7 to 9 will take the annual capacity of the port to 9 million TEUs with a total berth length of 3,555 meters.

PTI reported that the bodies of six Indian workers, killed when an under construction building collapsed on them in the UAE, have been pulled out. Police said that the rescue units with the aid of sniffer dogs recovered the bodies of all the six Indian workers who went missing after the collapse.

The victims were working with Seidco General Contracting, which was building the Laguna Beach Hotel in Ajman emirate of the UAE. The accident occurred on Monday when the workers had gone to plug a leakage in the concrete ceiling of the basement of the building.

Police said that "The workers, all carpenters, were trying to add more support to the columns that hold the ceiling when the freshly laid concrete and steel pipes collapsed.”

Colonel Ali Abdullah Alwan chief of Ajman Police said that 11 officials of the construction company have been detained for questioning.

It is reported that Larsen & Toubro Limited is planning to bid for building a new airport in Muscat.

Mr KV Rangaswamy president of L&T's construction division said that "The government of Oman is in the process of inviting bids and we will be submitting bids. The contract could be worth up to INR 30 billion. We will look for foreign airport modernization contracts and Greenfield airports as and when they come up."

L&T, which has built two new airports in India, is also involved in modernizing the Delhi and Mumbai airports.

Muscat's current international airport can handle 4.2 million passengers, while the new one planned 15 kilometers away would have a capacity for 12 million passengers that would eventually go up to 48 million.

It is reported that classification agency DNV Maritime has won 50% of Middle East and Indian market for new vessels on order or being built. It sets classification rules for ships, verifies compliance and issues survey reports and certificates.

Cash rich oil companies are driving the demand for offshore support vessels of various types, of which DNV has classified 300 currently on order worldwide.

Mr Eivind Grostad senior VP & regional manager of DNV Maritime said that "The regional offshore sector is exceptionally buoyant. We have 125 offshore support vessels currently being built to DNV class in local shipyards such as Drydocks World, Seaspray and Nicocraft as well as at Hindustan, Bhrati and Mazagon on the Subcontinent."

Besides the offshore support vessels, DNV has received a number of recent orders from local owners that include very large crude carriers for Vela International, chemical carriers for the United Arab Chemical Company and bulk carriers for Shipping Corporation of India. And the Abu Dhabi National Tanker Company has ordered several Aframax tankers.

Reuters reported that France's Lafarge and Iraqi partner Asiacell is planning to invest around USD 550 million to raise cement capacity in Northern Iraq to help meet a shortage in the region.

Mr Faruk Mustafa Rasool chairman of Asiacell said that Lafarge already has a 65% stake in an existing 7,500 tonne a day plant at Bazyan in Iraq's Kurdish region. He added that "We will build a second line with capacity of 7,500 tonnes a day and the cost would be similar to the USD 550 million spent to build the first line."

Iraq has been working for the past 3 years to bring foreign investors to invest as much as USD 2 billion in its cement factories, but political interference and instability has delayed the effort.

The Iraqi cement industry's total annual production, from 17 factories, is between 4 million and 5 million tonnes, a fraction of its capacity of 25 million tonnes. Iraq imports around 6 million tonnes a year of cement from neighboring Syria and Lebanon to cover consumption.

Today's Zaman reported that contractors affiliated with the All Contractors Federation have halted their ongoing projects to protest sharp hikes in steel and iron prices in recent months.

Mr Tahir Tellioğlu president of TMF said that the contractors who are part of the federation, which has around 30,000 members in eight cities, had stopped their construction projects on June 1st 2008 and would not resume until June 15th 2008.

He added that they had decided to halt ongoing projects at a special general assembly meeting as a reaction to the neutral stance adopted toward the high prices by both the ruling and opposition parties.

He also said that the contractors are also protesting recent moves by the Housing Development Administration of Turkey, which they say is becoming a professional company that aims to maximize profits, contrary to its major duty of producing low cost houses for low income groups.

Dana Gas and Emirates General Petroleum Corporation have jointly inaugurated Middle East's first common user gas pipeline, located in Sharjah.

Dana Gas and Emarat each have a 50% stake in the construction, ownership and operation of the pipeline. Phase I was completed in May 2006 and has since been delivering gas to the SEWA power station at Hamriyah.

The main pipeline of the joint Hamriyah Gas Pipeline Project is a 48 inch gas pipeline that connects the Sharjah gas hub at Sajaa to the fast growing industrial area at Hamriyah and covers a distance of 32 kilometers, with a capacity of 1 billion cubic feet per day. The new 48 inch pipeline is now ready to receive gas supplies from Sajaa and deliver them to the premises of the 3 end users at Hamriyah.

Mr Rashid Al Jarwan GM of Dana Gas said that "This strategic partnership has set an example for further regional co operation."

Mr Jamal Abdul Rahman Al Medfa acting GM of Emarat said that the project has a great deal of importance for Emarat and is in line with the company's strategic plan.

It may be noted that Dana Gas and Emarat, along with the 3 end users namely Federal Electricity & Water Authority, Sharjah Electricity & Water Authority and Dana Gas affiliate Crescent Natural Gas Company, agreed in January 2006 to build and use the pipeline.

Mr Mohammad al Olaim oil minister of Kuwait has declared that Kuwait is to start its production of free gas from its gas fields. He added that production will start with a 50 million cubic feet per day of non associated gas and will increase to 175 million cubic feet 10 days later.

He said that Kuwait ultimately plans to boost daily production to 1 billion cubic feet per day of gas by 2015. Plans had been to start in late December 2007, but were stymied by technical hurdles. He added that besides free gas, Kuwait will also be producing 50,000 barrels per day of light oil and condensates.

In March 2006, Kuwait announced the discovery for the first time of 35 trillion cubic feet of free natural gas and about 10 billion barrels of light oil in its northern oilfields.

Arabian Fiberglass Insulation Company Limited, a JV between Owens Corning and Zamil Industrial Investment Company and a sector business of Zamil Industrial, recently announced the completion of a major capacity expansion at its manufacturing facility located in Dammam, allowing it to increase its production capacity by 50%.

With local and regional demand for the company's products rising rapidly, AFICO is well positioned to meet current demand as well as projections for increased demand into the future. It recently invested more than SAR 60 million in upgrades and expansion. In addition to this expansion, AFICO is actively progressing toward new additional capacity in Saudi Arabia.

This new facility will allow AFICO to continue to grow in proportion to the market for fiberglass insulation products utilized in residential, commercial and industrial construction projects throughout the GCC region.

Once approved, construction of the new facility in Dammam will move quickly. This facility will be built using advanced technology from Owens Corning, and feature fully automated production lines.

Mr Abdulla M Al Zamil board member of AFICO and also COO at Zamil Industrial said that "With the latest technology and the support of Zamil Industrial, AFICO is uniquely qualified to function as a regional leader in the fiberglass insulation products industry well into the future."

Daily news reported that a Sindh High Court division bench set aside a single judge’s order for payment of interest to the owners of the land acquired for the Pakistan Steel Mills on the compensation paid to them.

The judge had allowed the owners’ plea rectifying a 1985 judgment by another single judge. The 1985 judgment called for payment of compensation to the owners of the land acquired for the PSM in 1974 under the Land Acquisition Act. There was no mention of interest on the amount of compensation.

The owners approached the high court for payment of interest through advocate Mr Adnan Memon, saying that they were entitled to the benefit of Section 28 A of the Land Acquisition Act. The judge allowed the plea holding that the owners could not be denied the benefit of the provision.

The single judge’s order was challenged by the PSM through advocate Mr Mohammad Nawaz Shaikh. Assailing the order, the lawyer argued that the judge had wrongly assumed jurisdiction under Section 152 of the CPC.

The division bench, which consisted of acting chief justice Mr Azizullah M Memon and justice Mr Arshad Noor Khan, set aside the single judge’s order and remanded the case to him for re hearing in the light of its observations.

Daily News Egypt quoted experts and steel importers in Egypt as saying that opening up the market to steel imports and facilitating customs entry procedures is crucial to stabilizing the steel market.

As soaring steel prices recently hit EGP 8,000 per tonne, some wholesalers and investors figured that it would cost less to import steel from steel rich countries than it would to buy it locally. Even after the added customs and shipping costs, it would be cheaper to buy steel from abroad.

The report cited Mr Khalid, an investor who used to own a steel plant, as saying that "A tonne of steel in the Ukraine costs around EGP 5,500. After adding shipping and customs costs, we planned to sell a tonne of steel to retailers at a price of EGP 6,250, which is significantly lower than current local prices. So, we decided to import steel from the Ukraine, one of the most distinguished steel producing countries in the world."

Mr Rachid Mohamed Rachid minister of trade & industry recently announced that steel manufacturers will be required to set a fixed selling price at the start of every month. He added that "Prices will be monitored by the ministry of trade & industry to ensure that they are applied and strict consequences will result on those who do not abide by their set prices."

The ministry brushed off the suspicions saying that manufacturers were required to increase their production by 20,000 tons last week to meet the increasing demand and economies of scale could lead to a lower production price for Al Ezz.

Gulf News reported that Minnesota, Mining & Manufacturing is planning to establish a manufacturing plant in the UAE in 2008.

Mr Irfan Malek MD of Minnesota, Mining & Manufacturing for Middle East and Africa said that it is looking to expand operations in the country from the manufacturing and technical and professional services aspect. He added that "If all goes as planned, we will start the construction of the plant in the next few months."

According to Mr Malek, the manufacturing and technical developments will represent a major part of investment. He said that an exact value of investment has not been decided yet as officials are still in the phase of considering operations within the plant. Thereby, if there is any specific value now, it could significantly change.

In Saudi Arabia, 3M's growth efforts revolve around elevating technical and professional services as well as geographical expansion within the country by setting up more sales and distribution offices.

Mr Malek said that "A country like Saudi Arabia cannot be covered from one point you need to expand the sales and distribution. That is where we are putting our money now. As Qatar starts to increase its construction activities and health care facilities and put money back into the economy, the market, it will be very attractive for us. All the countries are doing well but the extensive expansion plans are surely in the UAE and Saudi Arabia."

Business Recorder reported that Pakistan's trade deficit is likely to cross USD 20 billion mark this fiscal mainly due to sharp rise in imports low exports.

Although the State Bank of Pakistan took some bold steps to bring down the increasing imports, analysts believe that these steps had been announced very late, when the imports and trade deficit had already breached all barriers.

The State Bank of Pakistan imposed 35% margin on all import letters of credit, except oil and some food items from May 23rd 2008, aimed to bring down imports and the rising trade deficit. Earlier, there was no percent margin on LC opening, and importers were importing goods over and above the requirement, putting extra burden on the national exchequer.

Analysts said that during the remaining two months of current fiscal year no positive impact of this step may be witnessed, as importers had already has placed huge import orders. However, they believed that in FY09 imports would definitely decline due to the 35% margin.

Economists have predicted that this year trade deficit would cross USD 20 billion or about 49%, with about USD 37.5 to USD 38.5 billion imports and USD 18 to USD 18.5 billion exports. The targeted trade deficit for the current year was USD 13.1 billion, with USD 19.2 billion exports and USD 32.3 billion exports.

Pakistan's trade deficit has already reached at all time high level of USD 16.08 billion the first 10 months of current fiscal year as imports stood at USD 32 billion and exports at USD 15.25 billion.

Dubai based Middle East Development said that it is planning to develop a project to build the first bridge across the Red Sea linking Yemen and Djibouti, and associated new urban areas, at a total cost of USD 200 billion.

Mr Issam Halabi VP for technical affairs said that Middle East Development will invest at least USD 10 billion in the project and seek to raise the remainder from other investors and financial institutions. He added that "We will have seed capital of at least USD 10 billion and USD 190 billion in project finance."

Mr Halabi said that the bridge, which will be 28.5 kilometers long and carry vehicles, trains, natural gas and water, will cost USD 14 billion, with construction completed in phases over 7 to 15 years. He added that the associated town projects in Yemen and in Djibouti will include residential, commercial, healthcare and entertainment areas.

Press TV cited Mr Ali Kheirandish MD of Iran LNG Company as saying that Iran has no problems securing investments to the tune of USD 120 billion to become the world's top exporter of liquefied natural gas within the next 12 years. He added that "It has already secured USD 5 billion in financing for investment from its own resources, partners and banks. Many financiers have come to us with very attractive offers and we expect a lot more banks to make offers."

Mr Kheirandish said that added it expects to produce 80 million tonnes a year of LNG by 2020. He added that "We could increase the level after that period but it will depend on the market and other conditions."

As per report, as much as 70% of Iran's LNG production would be sold to Asia and Europe under long term supply contracts, with the rest of the world able to make purchases on the spot market.

Iran holds the world's second largest gas reserves after Russia. However, Iran's LNG projects, like other hydrocarbon schemes in the country, are facing severe delays due to US sanctions imposed on the country over its controversial nuclear energy program and escalating project cost.

According to a Dubai Customs Authority report, UAE is likely to be the first in the GCC to bring in VAT, which will replace customs duty charged at 5%.

The reported said that UAE will introduce the tax at a rate between 3% and 5%. The introduction date will be announced by the federal government within the next few months.

Mr Ahmed Butti Ahmed director general of the Dubai Customs Authority said that VAT was applied in more than 145 countries and had proved to be the world's fairest and most transparent form of taxation. He added that "The coming period will be exceptional as the UAE is likely be the first country in the Gulf to apply VAT."

Mr Ahmed said that "This will give the UAE a number of advantages and the tax will support the country's economic boom. No outside force is imposing VAT on the UAE. The UAE chose to embrace it and will deploy it to its advantage. The removal of customs duty is an important step towards forming strategic partnership with Australia, China, the European Union states and the US."

It may be noted that Dubai Customs and the International Monetary Fund have completed a study on the implementation of VAT in the GCC. Dubai began planning for the introduction of the tax as early as 2006.

It is reported that reconstruction of the quake hit areas involving 15 million people to be settled down is becoming a focus nowadays with the rescue and relief work gradually winds up. It is estimated that the overall reconstruction will need about 50 million tonnes steel products in next 5 to 10 years.

Industry insider said that the reconstruction will also witness a process of urbanization. If per capita steel consumption is 0.33 tonnes per year the reconstruction work will require at least 5 million tonnes each year adding up to 50 million tonnes in ten years.

Mr Zhou Xizeng an analyst with CITIC Securities contended that considering the proximity factor, the steelmakers to directly benefit from this quake will include Chongqing Steel, Pangang Steel & Vanadium Co, Valin Pipe & Wire, Maanshan Steel and Anyang Steel etc.

He however warned that "But a strong market does not mean fat profits. Steel prices in the disaster affected areas are intervened."

It is reported that Chinese construction steel prices seem to have finished downward correction and start another round of increase. Less output, higher production cost and robust demand are believed to be bolstering the upward trend.

Shanghai market prices HRB335 20mm rebar is being quoted at CNY 5420 per tonne to CNY 5430 per tonne, HRB400 at CNY 5700 per tonne to CNY 5730 per tonne up by CNY 70 per tonne to CNY 100 per tonne from last week. Price for commercial wire rod is at CNY 5870 per tonne that for hi-speed material is tagged at CNY 6100 per tonne to CNY 6110 per tonne up by CNY 100 per tonne

Rebar and wire rod prices in Beijing market have seen remarkable rebound. 6.5mm hi speed wire rod by Tangshan steel is being quoted at CNY 5980 per tonne up by CNY 30 per tonne. HRB335 and HRB400 16mm to 22mm rebar price are largely unchanged at CNY 5570 per tonne and CNY 5770 per tonne respectively.

Export offer for rebar with boron is being quoted at about USD 1000 per tonne FOB and most are from such South China based steel makers as Guangzhou Steel, Xiangtan Steel and Liuzhou Steel. Rebar without boron is at USD 1100 per tonne FOB.

(Sourced from MySteel.net)

According to Mr Sun, owner of a private steelmaker, small and medium scale steel makers in Qian'an have generally cut production by 30% to meet the environmental standard."

As Qian'an is close to Qinhuangdao, one site of the 2008 Olympic football game and adjacent to Beijing-Shenyang superhighway, many small and medium scale steel mills in the town have had to reduce steel output since early May.

Facing the pressure of environmental protection, Mr Sun's mill has cut down production from 5000 tons to 3500 tonnes per day which is up to the standard for pollution discharge. Moreover, the company will invest more in environmental conservation equipments, which normally account for 10% of the total fixed assets.

Numbers of steel mills alike present fairly high initiative in acquiring such equipment In order to survive. Meanwhile, large state owned steel mills like Tangshan Steel and Shougang have not been seriously impacted from the output control factors.

It is reported that Mr Huang Huahua governor of Guangdong, Mr Li Ronggen deputy governor and Mr He Wenbo of Baosteel jointly visited Zhanjiang port and learned the details about the evolvement of the Zhanjiang steel project's preparation work.

After the visit, Mr Huang Huahua made positive comments on the project's prophase work by saying the work is in smooth progress, the Longteng logistics pellet item an independent project supportive to the steel base also gets on well and the land levy and resettling work is carried on in steps.

Mr Huang said that incorporation of the Guangdong Steel Group should be picked up. He said that a good scheme has been made on the group incorporation, and called all parties to continue to push it forward and insure the unveiling within this year.

He said that further efforts should be made to strive for a quick approval for the overall construction. Supported infrastructures, like highway, railway, bridge and water supply is expected to be planned as soon as possible.

Zhanjiang project is designed with 10 million tonnes per year capacity in the first phase with total investment of CNY 69.6 billion.

It is reported that more regional governments have intervened in the price limits of steel products and cement for use in post quake relief. A host of mills have pledged to freeze their color coated steel at pre quake levels.

Central China’s Wuhan Steel has kept the June delivery price for color coated steel unchanged as promised in spite of the weekly price rally of CNY 100 per tonne to CNY 400 per tonne in the spot market. Moreover, the company has volunteered to produce 20,000 tonnes of color coated steel for fulfilling Hubei's commitment of providing 85,000 pre-fabricated houses for the disaster zones.

In the mean time, nine steel mills in Hebei producing color coated steel for use in quake relief have also issued a joint statement that they would ensure sufficient supply and frozen prices. Hebei has been assigned to 80,000 pre fabricated houses which would require 10.84 million tonnes of color coated steel, mainly supplied by Tanggang and Handan Steel.

It is reported that China Iron & Steel Association has advised its members to stop increasing prices of steel products destined for reconstruction and relief operation in quake hit areas.

CISA has forwarded the top planning body's directive to all its members and urged them not to increase the price of hot rolled coil, color coated coil and structural tube above levels prior to the devastating earthquake. The mills have been told that any price rises already implemented would be rescinded.

The move has come after the price limit order issued by National Development & Reform Commission. According to NDRC's CISA members are also required to supply materials directly to the quake stricken areas and prevent any price bidding in the circulating process.

(Sourced from MySteel.net)

Xinhua reported that China's oldest shipbuilder, the Jiangnan Shipyard Corp completed the move to a new home to make room for World Expo 2010.

The report said that work on the CNY 16 billion new shipyards started in 2005. It is the first phase of the Changxing base and has a production capacity of 4.5 million DWT with a 3.8 kilometer coastline, four docks and three production lines.

Mr Guo Xiwen China State Shipbuilding Corp chief economist told Xinhua that work on the second phase, with a 3.5 million DWT capacity is to start in 2009 and finish in about 2012.

China is the world's third largest shipbuilder after the Republic of Korea and Japan. It accounted for 23% of the world market with a production capacity of 19 million DWT in 2007.

It is reported that recently Chinese HDG and PPGI price have been surging despite slow domestic steel market. Supply is reported to be quite short and prices are continuously on the rise.

As per report the price increase is across the board and there has been an average increase of CNY 200 per tonne for HDG and PPGI since late May.

On Shanghai market 1.0mm HDG by Wuhan steel is being quoted at CNY 7100 per tonne. 0.5mm HDG at CNY 7500 per tonne,1.0mm HDG by Anshan steel goes at CNY 7050 per tonne to CNY 7100 per tonne, 0.5mm PPGI by Baosteel is at CNY 8600 per tonne, Guangzhou market has witnessed a substantial rise of CNY 500 per tonne to CNY 600 per tonne during the past two weeks

The major reason for the price surge is the reconstruction in earthquake hit Sichuan province. The constructions for 1.5 million temporary houses require at least 700,000 tonne of PPGI. Such a great demand has put great pressure on steel makers and most steel makers have to set aside capacity for PPGI production. This has really led to tension in supply and price surge.

(Sourced from MySteel.net)

It is reported that Pangang Group and Bank of China signed a CNY 20 billion worth of financial agreement for supporting the post quake reconstruction in the Southwest part of China.

As per report the earthquake substantially damaged the highways, bridges, infrastructures and houses in the Southwest, causing total direct economic losses of over CNY 150 billion. For reconstructing, it may need more than 6.5 million tonnes steel products as calculated. And the value is close to CNY 20 billion if per tonne steel product costs CNY 3000 on average.

Mr Fan Zhengwei chairman of Pangang Group said they will struggle to resume operation as soon as possible and devote into steel supply for the quake relief.

Bank of China has already granted credit of CNY 8.3 billion and provided load of CNY 4.4 billion to Pangang. And its branch in Sichuan donated CNY 300,000 in quake rescue. The bank said Pangang will play an important role in post quake reconstruction by supplying construction steels like vanadium-contained rebar.

It is reported that Xinyu Steel has commissioned a dust catcher as a part of its plan for improving environmental protection.

Girth washing equipment is the environmental facility, which matches with Xinyu Steel’s 3 million tonnes sheet plate converter project. The diameter of the equipment is 5 meters, 21 meters high, 86 tonnes weight, is the largest one in similar equipments. The equipment is constituted by washing tower, girth syringe, wet spin evaporator etc; the total investment is about CNY 6 million.

The equipment will play the remove dust cooling role for the converter production as well as creating favorable conditions for recycle of coal gas.

According to WISCO Group that since May, high strength auto sheets from Wugang launched commercial production and have been utilized to manufacture cars by Dongfeng and Chery and so on.

It is reported that this high strength auto sheet could cut steel consumption by 10% or so a car, compared with common auto sheets, and therefore it will reduce the weight of the car and decrease the fuel consumption while driving.

WISCO expressed that it is committed to help the downstream users by cutting costs through technology innovation, and make efforts to realize the auto industry’s environmental protection, economization.

Bloomberg cited Mr Guo Jingbin executive director of Anhui Conch Cement Co as saying that Chinese government will cap cement prices to curb inflation.

Mr Guo said “I don't think the government will impose nationwide price controls on cement. Cement was one of the first few products for which price controls were relaxed in China, so the government won't control its price in the absence of extenuating circumstances.”
He said that “China's National Development and Reform Commission have said it will place limits on the prices of basic materials used during the post earthquake rebuilding phase, including cement steel and glass. The specifics haven't been announced yet.

Mr Guo said “The price of cement in Sichuan province was around CNY 600 per tonne before the earthquake, compared with a national average of about CNY 300.

He said that “Cement prices in that region were the highest in the country even last year. Without government controls, the price there could exceed CNY 1,000 per tonne after the earthquake.''

It is reported that 5,000 tonnes of HR coiled sheet and 1,000 tonnes of color coated sheet was shipped from Yingkou Port. This was the first batch of steel products manufactured by Anshan Steel for earthquake disaster areas.

As per report Anshan Steel received the announcement from State owned Assets Supervision and Administration Commission on 23rd May and was ordered to produce 30,000 tonnes of HR coiled sheet for Guangdong Huaguan Steel Co to manufacture earthquake prefabs. On 27th May, the company accepted the production mission from province Liaoning of 20,000 tonnes of color coated sheet and 10,000 tonnes of galvanized sheet for the manufacture of earthquake prefabs.

Anshan Steel has already completed the production of 1,000 tonnes of galvanized sheet and 7,500 tons of color coated sheet. After active communication with consumers in both domestic and international market, Anshan Steel has successfully delayed color coated contracts for June delivery to August.

According to well inform source, Baosteel has already revised steel prices for Q3, fixing on the new prices in secret with its strategic customers and the direct users respectively rather than unveiling to the public.

It is reported that Baosteel will keep the price of steel used in quake relief unchanged. Baosteel's sales center confirmed the price correction with China Securities Journal, but didn't disclose the range of price change.

Mr Zhou Tao Guojin Securities analyst predicted that Baosteel's price hike at some 15% based on usual pricing strategy, while Mr Hu Hao with Zhong Yuan Securities said, as he learned the major steels will gain some CNY 300 per tonne to CNY 600 per tonne.

Mr Hu with Zhong Yuan Securities said following four aspects can explain Baosteel's price lift.

1. The supply or demand correlation holds sound and Baosteel's advantage in producing high value added product helps pass on the additional cost
2. Away from increasing cost of past years, coke price again gained 35% while this year's ore price talk between Baosteel and Australian suppliers may turn out a higher hike percentage
3. The recent steel market is upward and the other mills are striving to raise EXW prices
4. The international steelmakers lifted Q3 prices before Baosteel's move.

Mr Zhou Tao said Baosteel's hike is able to cover the additional cost. But Mr Hu Hao didn't think this hike serves a full reflection of the market supply and demand, and believed there is still upward room for the Q4. Baosteel's products are CNY 100 per tonne cheaper than WISCO and register USD 200 per tonne gap with the overseas prices.

Bloomberg reported that State Grid Corp of China, the country's largest electricity distributor repairs to its national grid after last month's earthquake in Sichuan cost CNY 34.6 billion. State Grid Corp of China faces a direct economic loss of more than CNY 12 billion from the temblor that struck the southwestern province on May 12. Sichuan alone accounts for CNY 10.6 billion.

State Grid said “The lower profit is due to the two natural disasters in the first half of the year.''

Mr Lu Jian spokesman said State Grid spent CNY 70 billion in the first five months on maintaining and expanding its grid an increase of 14.5% from a year earlier. The power supplier is facing huge pressure and is trying to meet its 2008 profit target.

Mr Wang Wei an analyst with Guotai Junan Securities Co said “Natural disasters will greatly hurt State Grid's profitability this year. But the repairs will boost orders for manufacturers of power cables and equipment.''

State Grid distributes power in 26 provinces and regions, covering 80% of China.

Bloomberg reported that Hyundai Heavy Industries Co will set up a shipping venture in China to transport steel plates to its yards in South Korea.

Ulsan based company said in a regulatory filing that he USD 2 million ventures with Grand China Shipping Ltd will be based in Shanghai. The partners will have equal shares in the venture.

The report added that Hyundai Heavy in September 2006 agreed to buy 20% of China's Qinguangdao Shouqin Metal Materials Co to ensure a steady supply of steel plates.

Together with units Hyundai Mipo Dockyard Co and Hyundai Samho Heavy Industries Co, Hyundai Heavy expects to use about 3.9 million tonnes of steel plates this year of which 1 million tonnes will be bought from China. The companies used 3.2 million tonnes last year of which 700,000 tonnes were from China.

It is reported that Iran and China have sealed a EUR 131 million deal for the construction of a major steel mill in the central Iranian province of Yazd.

Mr Ahmad-Ali Harati-Nik Deputy Industry Minister of Iran on his recent visit to China said "China will soon begin the project for the production of steel through the electric arc process at Ardakan in Yazd. He said that the EUR 131 million projects will boost Iran's steel production capacity by 1 million tonnes."

Mr Harati-Nik said the state owned China Metallurgical Construction Group is expected to commence the project in late June.

The deal is in keeping with Iran's plans to significantly increase its steel production over the next several years.

It is reported that China's Cosco Pacific has offered the highest bid in the tender for the concession to manage two of Greece’s three container wharfs at Piraeus Port.

Cosco's offer totalled USD 7.61 billion as compared with a Hutchison Whampoa consortium’s offer of USD 6.82 billion for 35 year concession. It pledged to invest USD 957.68 million in the project while the Hutchison consortium which includes Greece's Alapis, offered USD 546.8 million.

As per report Cosco's offer excluding the investment pledge is seven times the current market value of Piraeus Port Authority.

Hutchison Whampoa and Cosco Pacific are also bidding to manage container handling operations in Thessaloniki, Greece's second largest port. Another bidder for the same tender is Dubai Ports World.

Aurox Resources Ltd last week in response to media reports clarified the relationship between the Western Australia based explorer and China's state owned Chengde Iron and Steel Group.

The company said that media reports in Hong Kong and Western Australia have reported that China's state owned Chengde Iron and Steel Group was in talks to buy a stake in Aurox Resources Limited.

Aurox said in the announcement that Chengde Iron and Steel Group entered into a 15 year sales agreement for iron ore concentrate from the Company's Balla Balla project in March 2007.

The company's share register already includes RockCheck Steel Group Company Ltd of China with approximately 8% of the issued capital of Aurox.

Aurox has held discussions in recent months with a number of parties concerning equity investment, including Chengde, and although those are ongoing there is no certainty that a transaction will be concluded.

It is reported that Chinese steel makers have raised export quotation for cold rolled steel coil again to reflect the increase in domestic market price. Despite the remarkable increase there is not much allocation for exports.

CRC prices has jumped by USD 40 per tonne to USD 50 per tonne from end May and the strength is likely to continue in June. Export offer for 1.0mm CRC is prevailing at USD 1120 per tonne FOB and some are tagging at higher level.

Shanghai based trader said "There is less allocation than expected and even private steel makers have been almost fully booked. It is not easy to get material even at high price level."

As per report, the increases in domestic market prices are believed to be the major driver of the strength of export offers. On Shanghai market, price for 1.0 cold rolled sheet by Anshan steel is being offered at CNY 7350 per tonne, while that for 1.0mm CR coil by Maanshan steel is at CNY 7250 per tonne.

Mysteel forecasts Shanghai price for 1.0 sheet by Anshan steel is close to our target of CNY 7400 per tonne to CNY 7500 per tonne and the next one probably will be CNY 7700 per tonne to CNY 7800 per tonne and it could go past CNY 7500 per tonne. Otherwise, we could exclude the possibility of downward correction.

(Sourced from MySteel.net)

It is reported that China, planned to sign an investment agreement with Belgian Bekaert Group to set up China's largest tyre cord steel wire plant at Shuangqiao District in Chongqing. The first investment fund of this project will amount to over EUR100m reportedly.

Mr Huang Renchao head of the Investment Promotion Bureau said "We have just settled on the investment specifics with Bekaert today. He said that Shuangqiao district was built up in 1970's, and now has owned over 300 auto and supporting firms producing the parts and accessories. Shuangqiao is now entering into its new development term with the establishments of a series of projects, which are expected to bring about an annual production value of RMB10b after being put into service."

Thomson Financial reported that some quake hit areas in China were running low on supplies of coal, and authorities have urged coal producing provinces to step up output to help fill the gap.

Xinhua news agency said an emergency circular of the State Council also called on the provinces to hasten the resumption of work at small coal mines that had been suspended from operating to fix safety problems.

The agency said China's coal industry has been under stress due to coal shortages this year, a situation worsened by the May 12 quake, which struck in the southwest and damaged a 'considerable' number of hydropower stations.

The circular said the coal will fuel thermal power stations in the quake zone.

Platts reported that Michigan based Severstal NA has returned to the spot market for the first time since January with limited tonnage for July orders.

As per report, mill's offers for hot rolled coil are priced at USD 1,060 per tonne ex works the same as the upper end of the Platts current price assessment ex works Indiana basis. Severstal's offers for spot cold-rolled coil are reported at USD 1,160 per tonne ex works Detroit and base grade galvanized material is USD 1,180 per tonne ex works.

The report added that “Sources at Severstal NA would not confirm the pricing levels as reported by buyers, but did say the plan was to be in the spot market every month from now on. The Detroit area steelmaker may later this year gain an edge over larger mills US Steel and ArcelorMittal USA, which are starting labor talks with the United Steelworkers since their contracts with the union expire September 1st 2008. Severstal's labor pact, on the other hand, is with the United Autoworkers and does not expire until 2012.”

Severstal did not specify how much spot tonnage was available, but an East Coast steel consumer speculated. Platts was told "It could be just 5,000 tonnes or 15,000 tonnes to 20,000 tonnes; however Severstal's availability would be in excess of 5,000 tonnes.

Mechel announced the commissioning of a new construction reinforcement production line at its Mechel Targoviste subsidiary at Targoviste in Romania. The project follows the program of Mechel’s service and sales subsidiary, Mechel Service OOO aimed at entering the market of custom made construction reinforcement.

The new production line will release inserts used to manufacture apertures of doors and windows, bind reinforcement structures together and strengthen bearing structures; as well as welded frames necessary to create bearing concrete columns and other construction frames. All custom made products will possess unique characteristics needing no additional processing prior to its use.

The complex was supplied by SCHNELL, Italy one of the leading manufactures of equipment for metallurgical plants. The production line’s projected capacity is 1,000 tonnes of shaped steel per month with the potential for a significant increase in output.

The project investments amounted to EUR 1 million or USD 1.5 million. The primary costs were for designing and acquiring the equipment, preparing premises and training new personnel. To operate the line, 40 additional employees were hired.

Mr Vladimir Polin CEO of Mechel Management OOO said “This production gives Mechel Service Europe OOO an opportunity to offer construction companies a supply of finished reinforcing elements in the long term and will attract more end users due to its complex supplies and wider range of services. Using our reinforcing materials, we can reduce construction periods while ensuring a high quality product and reliability.”

He said that “This new production line has given us the potential to win a new market niche. This is especially important considering there is rapid growth in the building materials market of Eastern Europe, which is tied to the general economic growth trend in this region. The new line at Mechel Targoviste will produce high margin products that are currently in high demand on the market. After commissioning the production line and arranging the shaped steel sales, the product volumes will be ramped up by installing additional equipment. We are pleased that Mechel’s steel division continues to successfully execute on its strategic objective to transfer to manufacturing downstream products with high added value. This allows Mechel to maintain a steady market position and generate stronger profits.”

Mechel has continued to strengthen its positions in the Eastern European steel market. In March 2008, Mechel Service OOO opened its branch, Mechel Service Europe OOO, in Romania, which provides Mechel’s metal product sales in this region. The new production line installed at Mechel Targoviste is expected to produce high margins as it produces custom made reinforcing elements conforming to each customer’s specific needs.

TMK, one of the world’s largest oil and gas pipe producers, announced the signing of a syndicated bridge facility agreement of up to USD 1.2 billion to finance the acquisition of the US tubular companies and assets of IPSCO.

The facility agreement was signed on May 30th 2008.

Mandated Lead Arrangers are
1. ABN AMRO Bank N.V.
2. The Bank of Tokyo-Mitsubishi UFJ, Ltd
3. Barclays Capital
4. BNP Paribas
5. ING Wholesale Banking
6. Natixis
7. Sumitomo Mitsui Banking Corporation
8. Nomura International plc

The released added that the term of the facility is 12 months with a 3 month extension option. This Syndicated Facility is secured by TMK subsidiaries Volzhsky Pipe Plant, Seversky Tube Works, Sinarsky Pipe Plant and Taganrog Metallurgical Works.

The interest rate of the Syndicated Facility is the aggregate of LIBOR and a step up margin which increases during the lifetime of the Facility.

LSE listed leading Russian steel producer Novolipetsk Steel while announcing its consolidated US GAAP results for Q1 of 2008 has given the following outlook

“Prices for steel products continued to grow in Q1 and Q2 2008 following an increase in raw material costs and consistently high demand in the world market. We currently anticipate a mid-year flattening of steel prices.”

“In 2008, steel production volume at our main production site in Lipetsk is expected to reach 9.4 million tonnes up by 4% YoY. Total steel production volume of NLMK’s Russian steelmaking assets is expected to reach 11.6 million tonnes up by 26% YoY. As a result of the increase in production volumes, price growth and the consolidation of Maxi-Group we expect revenues to grow by up to 60% YoY. According to our preliminary estimates, EBITDA could exceed the 2007 level by 35% to 40%.”

Vladivostok Times reported that Mr Vladimir Putin PM of Russia has proposed to consider the opportunity to build cars in the Far Eastern and Siberian Federal Districts in the framework of carrying on the negotiations on Russia joining WTO.

Mr Vladimir Putin said "We should, however, have an opportunity to build cars in the Far Eastern and Siberian Federal Districts and if we find such recipe in the framework of carrying on the negotiations on Russia joining WTO, we should prolong the agreement on industrial unit assembly of the vehicles provided we meet our commitments."

He said that it is necessary to provide for the service and repair facilities along the Federal and public highways when they are designed, built and reconstructed.

Mr Putin said about 80% of cars that are sold throughout Russia should be produced within the Russian Federation. He said that Russian automobile market will become the greatest on the European continent. Over 3 million cars were sold in Russia last year with the sales volume came to USD 40 billion.

It is reported that open Joint Stock Company Chusovskoy Metallurgical Plant conducted an annual general meeting of shareholders.

The annual report of OAO CHMZ for the year 2007 was presented during the meeting. Revenue for enterprises in 2007 amounted to RUB 11.272 billion and net profit amounted to RUB 486.153 million.

As per report, assembly of shareholders approved the annual report of CHMZ for the year 2007 annual accounts including income statement CHMZ for the year 2007.

In a meeting shareholders elected the board of directors of OAO CHMZ which included: Mr Valery Anisimov, Mr Natalia Eremina, Mr Anatoly Karpov, Mr Vladimir Markin, Mr Anatoly Sedykh, Mr Eugene Shevelev, Ms Julia Shhiyants.

Audit Commission of OAO CHMZ was elected shareholders' meeting consisting of three people: Ms Elena Ivanina, Ms Natalia Oleinik and Ms Marina Shichkina.

Assembly of shareholders approved the conclusion of a number of transactions of which there is interest.

Interfax cited Mr Mukhtar Dzhakishev chief of national nuclear corporation Kazatomprom as saying that Kazakhstan's government is not thinking of imposing an export duty on uranium.

He said that "It is impossible to levy export duty on uranium. If a customs duty is imposed, there is no need to develop anything here. We would rather trade in the most rudimentary product to pay the minimal export duty rate."

Mr Mukhtar said "If I produce something that is 30 times more expensive, I will be haying 30 times more export duty. What's the point? I would better sticking to a low value product. The government is well aware of that too. Nobody is suggesting customs duty on uranium. The issue has not been raised."

Kazakhstan has been planning to introduce export duty on the key export commodities including metals, grain and oil etc. A ban on grain exports was introduced and export duty imposed on oil, however a final decision regarding metals duty has not yet been reached

OMZ OJSC announced its financial results for 2007 in accordance with Russian Accounting Standards.

OMZ OJSC revenues reached more than RUB 21 billion up by 22% YoY as compared with 2006. OMZ’s net profit doubled to over RUB 1 billion. Its operating activities in various business segments have stable positive dynamics.

The metallurgical division of OMZ increased its revenues by 38% YoY for 2007 against 2006. The Group’s mining division’s revenue growth reached 21%. OMZ Group’s oil and gas business developed quickly in 2007, with revenues rising twelve fold.

In 2007 OMZ Group invested more than RUB 1 billion in modernizations, increased production efficiency and development of its companies. Implementation of a program aimed at decreasing production costs was continued. The program covers all technological processes from steel smelting to the manufacture of finished products and provides for decreased consumption of materials and energy resources during production processes. The program includes increased mechanization and automation of manufacturing processes, improved production technologies, production and labor organization, work standardization and labor remuneration, and other elements.

Despite the positive dynamics of OMZ Group’s operations for 2007, an insufficient number of orders from nuclear power companies were a key negative factor having an impact on the Group’s business for the period.

RIA Novosti reported that Russia and Saudi Arabia signed a protocol on the conclusion of bilateral talks on Russia's accession to the World Trade Organization.

Russia, the only major economy outside the WTO has been seeking membership in the organization since 1993. So far, Moscow has concluded bilateral talks with over 60 states but still needs to complete discussions with two WTO members Georgia and Ukraine.

The document was signed by Mr Alexei Kudrin, Russia's finance minister and deputy prime minister, and Mr Abdallah bin Zainal ali Reza Saudi Commerce and Industry Minister.

The protocol contains arrangements on traditional Saudi exports, such as dates, cement, oil and petroleum products, fertilizers, carpets, glassware, aluminum and aluminum products and cables.

RIA Novosti reported that Russia's largest independent crude producer LUKoil owned Caspian oil and gas condensate field reserves had been estimated at 300 million tonnes of conventional fuel.

Mr Vagit Alekperov CEO of LUKoil CEO said "We have discovered a large deposit estimated at around 300 million tonnes of oil equivalent. It is not unique, but it is large."

In May 2008 TsentrKaspneftegaz a joint venture established on a parity basis between Russian energy giant Gazprom and LUKoil discovered a large oil and gas condensate deposit at the Tsentralnaya structure in the central part of the middle Caspian Sea on the border between Russia and Kazakhstan. The deposit was discovered within Russia's sector of the sea, 150 kilometer to the east of the city of Makhachkala.

The deposit is expected to be brought into production in 2017 to 2018.

RIA Novosti reported that Russia's largest independent oil producer LUKoil US GAAP net income up by 140% YoY in the first quarter of 2008 to USD 3.16 billion.

The report added that LUKoil, which accounts for about 1.3% of global oil reserves and 2.1% of world crude output, attributed its net income growth to favorable market conditions, high refiner margin, and an increase in refinery throughput and effective cost control.

LUKoil said revenues in the reporting period climbed 60% to USD 25 billion, pre tax profit grew 130% to USD 4.18 billion and earnings before interest, taxes, depreciation and amortization went up by 99.3% to USD 4.85 billion.

LUKoil earlier said its US GAAP net consolidated income increased 27.1% YoY in 2007 to USD 9.51 billion.

Russian steel producer Novolipetsk Steel has achieved following steps in the area of M&A during Q1 of 2008.

1. In January 2008, NLMK reached an agreement to acquire 100% of the trading companies Novexco Limited, Cyprus and Novex Trading SA of Switzerland. The EUR 77.1 million transactions was completed in May 2008.

2. In February 2008, NLMK reached an agreement to amend the terms of its contract with Duferco Group. NLMK is granted a perpetual option to acquire one share in SIF, JV with Duferco Group. Furthermore, from December 18, 2010, NLMK is granted a perpetual option to buy all of Duferco Group’s interest in the Joint Venture at a price based on the change in the consolidated shareholders equity of SIF between October 2006 and the exercise date.

LSE listed leading Russian steel producer Novolipetsk Steel while announcing its consolidated US GAAP results for Q1 of 2008 said that total CAPEX for Q1 2008 was USD 355.2 million.

Major projects include the following

1. Refurbishment and commissioning of the Concasting Machine (CCM-6), which has a 2.5 million tonne per year capacity. The upgrade improved CCM-6’s technical capabilities and enabled an increase in production capacity of 1.2 million tonnes per year

2. VIZ-Stal launched the production of 0.23 mm thick transformer steel sheets used in high power transformers. The first deliveries have already reached our customers

The release added that “The Strategic Planning Committee has approved the key parameters of the Group’s Technical Upgrading Program, covering the period up to 2015. NLMK plans to increase crude steel production volumes at NLMK’s Russian sites to 22 million tonnes by 2015, while flats and longs production volumes will increase by up to 6.9 and 5.9 million tonnes respectively. NLMK is developing a high value added product portfolio focused on the domestic market. The Company expects consumption to grow in the construction, mechanical engineering, automotive and infrastructure sectors.”

OJSC MMC Norilsk Nickel announced that it has begun commissioning the 12 million tonne per annum Dense Media Separation plant at Tati Nickel and following a review of project economics, in agreement with the Government of the Republic of Botswana has indefinitely postponed the Activox® Refinery Project in which GRB and Norilsk Nickel hold 15% and 85% respectively.

1. Commissioning of Dense Media Separation Plant
The 12 million tonne per annum DMS plant, which selectively increases the head grade of run of mine material, has begun commissioning on schedule and within budget parameters. The DMS plant is expected to increase annual production at Tati from 14,500 to 22,000 tonnes of contained nickel in concentrate reduce total cash operating costs and extend the life of mine by seven years to 2019.

2. The Activox® Refinery Project
Following the acquisition of LionOre Mining International by Norilsk Nickel, an extensive review of the Activox® Refinery Project was initiated by Norilsk Nickel. This included internal and independent third party reviews which highlighted a substantial project cost escalation from the September 2006 Bankable Feasibility Study estimate of USD 498 million.

The aim of this project at Tati Nickel was to improve overall recoveries of nickel from concentrates that are currently being treated by traditional pyrometallurgical means. The incremental recovery gained in this application at a brownfield site does not economically justify the capital expenditure increase, and therefore the shareholders have agreed to postpone the project indefinitely.

The major contributing factors to the substantial cost escalation were an increase in construction, equipment and project management costs worldwide. In addition short term energy constraints, as a result of the tight energy balance currently being experienced in Southern Africa, were assessed as a risk that would have adversely affected the commissioning, time to production and overall economics of the Activox® Refinery Project.

3. The Activox® Demonstration Plant
Norilsk Nickel continues to develop the Activox® hydrometallurgy technology as a viable process for nickel sulphides and the Activox® Demonstration Plant in Botswana will continue to operate as a large scale test site producing LME grade nickel and copper cathodes. A major bulk sample of concentrate from Norilsk’s Kola operations in Russia is planned to commence testwork at the Activox® Demonstration Plant.

It is reported that a senior US official urged Turkmenistan to diversify natural gas export routes and continue reforms aimed at liberalizing the country and attracting foreign investment since Mr Kurbanguly Berdymukhamedov president of Turkmenistan came to power in late 2006, promising to reform Turkmenistan's Soviet style economy and restore civil freedoms.

On a visit to the Caspian nation, Mr Richard Boucher US Assistant Secretary of State said he and Mr Berdymukhamedov had discussed linking Turkmenistan's potentially huge gas reserves to new markets.

Mr Boucher said "Diversification is the best guarantee of security."

Turkmenistan exports about 50 billion cubic meters of gas annually through Russia's Gazprom and plans to increase exports significantly in the future.

It is reported that Mr Nursultan Nazarbayev president of Kazakhstan signed a law ratifying the oil-rich state's participation in the strategic Baku-Tbilisi-Ceyhan pipeline to the Mediterranean.

As per report the law is based on an agreement signed with Azerbaijan in 2006 under which Kazakhstan is to deliver oil by ship to the starting point in Azerbaijan of the Baku-Tbilisi-Ceyhan pipeline.

The pipeline was inaugurated in 2005 with strong US backing and has its outlet in the Turkish port of Ceyhan. It is regarded as a pioneering project as it brings oil to world markets independently of Soviet-era master Moscow.

Kazakh state oil company Kazmunaigaz later signed a protocol on ensuring deliveries to the pipeline with the companies developing two super giant oil fields, Kashagan and Tengiz. Initially they are to provide 25 million tonnes per year to the pipeline, possibly rising to 38 million tonnes.

However, the timetable remains vague due to uncertainty over the much delayed development of Kashagan. The Kashagan project is being undertaken by an unwieldy Western led consortium and is now expected to come on line in 2012 or 2013.

Reuters reported that Russian miner Aricom Plc confirmed that it has appointed Morgan Stanley to advise it on raising funds to develop its iron ore projects in Russia.

Aricom in a statement said that it estimated it would require in excess of USD 1 billion for its K&S and Garinskoye projects in the Russian Far East.

Mr Jay Hambro CEO of Aricom Plc in the statement said that "The K&S and Garinskoye projects are forecast to generate significant annual cash flow which will enable them to support the required debt program.”

He added that "We also continue to review the possibility of inviting a strategic partner into one of the projects should it bring significant value.”

Bloomberg reported that Eurasian Natural Resources Corp, the Kazakh producer of ferrochrome, iron ore and aluminum is down for a fourth day in London trading on speculation that Kazakhmys Plc will sell its stake in the company.

Ms Elly Williamson spokeswoman for ENRC said Kazakhmys the nation's biggest copper producer was unable to sell the 14.6% stake for 180 days from ENRC's entry to the London Stock Exchange on December 12 following an initial public offering. While Mr David Simonson spokesman for Kazakhmys said the stake isn't a long term holding a quick decision won't be made.

Mr Sam Catalano an analyst at Macquarie Bank Ltd in London said. “It's a sensible move, though, because the market will not fully value the minority ENRC stake as part of Kazakhmys. He said that the market is concerned that there would be a large amount of stock suddenly available.''

London-based ENRC fell 48 pence or 3.5% to 1,319 pence at the close in London the lowest since May 9th 2008. The stock dropped 5.3%.

It is reported that to cope with the current energy crisis, Kyrgyzstan needs to address a number of possible remedies, one of which is a broader use of coal by industries and the population at large. Experts say Kyrgyzstan has sufficient coal reserves to meet its energy needs.

Mr Gulbarchyn Asanova deputy minister of industry, energy and fuel resources of Kyrgyzstan said the estimated reserves of the country’s 70 major coal mines amount to more than 2.2 billion tonnes with a further 1.2 billion tonnes of additional resources.

He said that more than half of the coal mined in the country is produced by the open-pit method. Coal mines in southern Kyrgyzstan are working quite efficiently, although the output could be certainly higher.

Mr Asanova said Kyrgyzstan now has 23 coal mining companies which are consolidated within the Komur state owned company almost all of them are public corporations.

As per report the demand of the economy and the population can only be met by increasing coal production. By 2010, the industry plans to extract 460,000 tonnes of coal which would allow reducing the import.

The plan is to increase coal extraction by 30% at the existing and operating coal mines in the northern Naryn province and to expand coal mining in the south of the country.

Bloomberg reported that Deutsche Bank AG, Germany's biggest bank, stopped issuing so called global depository receipts in certain Russian energy and mining companies after lawmakers passed a new law governing investments in strategic industries.

According to notices posted on Deutsche Bank's Web site for depositary receipt services the German bank closed the books for GDR issuances in companies including OAO Severstal, Russia's biggest steelmaker, OAO Novatek, the country's largest independent gas producer, ANK Bashneft and OAO Novolipetsk Steel.

Mr Dirk Becker a Frankfurt-based analyst at Landsbanki Kepler said “It's a good precautionary measure by the bank until it can assess the real impact of the law. This could be a setback for the Russian stock market because it may make it more difficult for foreign investor to trade.''

According to the Federal Statistics Service Russia, the world's biggest energy exporter lured a record amount of foreign investment last year, the ninth straight year of economic expansion. Foreign investment, including loans and portfolio inflow, more than doubled to USD 120.9 billion.

It is reported that in 2007 production growth of rail rolled products in Russia made up about 7% to 8%. In January to April 2008, shipment of rails by Russian enterprises made up more than 0.41 million tonnes up by 18% YoY as compared to the same period of 2007.

As per report the structure of internal deliveries of Russian enterprises, export has significantly increasing. Increase of foreign trade shipment of rails, according to the results of the period made up more than 22%, while internal consumption increased by 17%.

Besides railroad transport, some sectors of machine-building industry demonstrated growth of demand in rail rolled products. Rise in demand was also noted in mining companies, the companies of ferrous metallurgy, construction sector. On the whole, positive trends of Russian economy during this year noticeably extended the size of Russian market and as a result, internal consumers managed to increase significantly load of facilities.

NTMK demonstrated the most impressive results in the sphere of volume increase of rail output. In comparison with January to April of the last year, steel mill increased output of rails almost by 1,5 times. The indicators of shipment growth at Novokuznetski steel mill made up about 6%.

According to the results of the year the market which was an example of stability, demonstrated serious growth potential all of a sudden. In case of keeping current indicators of volume growth of production at the same level, shipment at Russian enterprises can exceed 1,35 million tonnes to 1,4 million tonnes of new rails which will become record indicator during recent years.

(Sourced from Rusmet.ru)

It is reported that Pirelli & C SpA has signed a letter of intent to begin negotiations for the construction of a car, light truck and heavy truck tyre plant in Russia.

The letter was sent to the Russian State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product. The new facility will also produce steel cord tyre reinforcements and automotive filters.

As per report Russian Technologies and Pirelli have agreed on an exclusivity period for the negotiation of the final agreements until September 30th 2008. Upon its establishment, the two partners would jointly control the Joint Venture, while Pirelli would be responsible for the development of the business strategy and running operations of the Joint Venture, which would be carried out under the Pirelli brand name.

Jiji Press reported that Nisshin Steel Co confirmed that it had shipped 550,000 stainless steel pipes without conducting required nondestructive testing for detecting defects and tests for ability to withstand hydraulic pressure and air pressure.

It said that “Nisshin Steel plant in Amagasaki of the western Japan prefecture of Hyogo failed to carry out the testing, mandatory under Japanese Industrial Standards and fabricated test data for some steel pipes manufactured at the plant in the past five years.”

A Nisshin Steel in house investigation of test data for April 2003 March 2008 found that a total of 480,665 stainless steel pipes were shipped without nondestructive inspections or tests on hydraulic pressure out of 4,311,205 subject to such tests. Tests were also not conducted on 71,756 stainless steel pipes of 2,485,458 subject to air pressure resistance testing.

Nisshin Steel is the third Japanese steelmaker at which testing data fabrication has been revealed, following similar cases late May at JFE Steel Corp and Nippon Steel Corp.

UK based consulting firm MEPS said that “Transaction values for type 304 are forecast to be relatively stable in June. The Alloy surcharge is predicted to fall marginally, with basis figures expected to be unchanged.”

MEPS added that “End users will, almost certainly, reduce their purchases next month in anticipation of lower surcharges from July onwards. Furthermore, distributors are likely to begin de stocking shortly as they fear being left with excessive material in a declining market. This is likely to prevent any attempts by the mills to push up basis values in the near future.”

MEPS said that “Nickel cash values on the LME have fallen by almost USD 6000 per tonne since the beginning of May, with the monthly average figure set to be more than 10% below that of April. A strengthening in the US Dollar contributed to downward pressure on prices. This is not good news for stainless steel and nickel stockiest who will now be holding overpriced material.”

MEPS added that “Considerable falls in the alloy surcharges, as a result of the nickel descent, are expected for July. However, rises in ferrochrome, scrap and energy costs should offset these decreases slightly. Further drops in nickel prices are likely over the next few months as the traditional mid year lull in the stainless market impacts on nickel consumption.”

MEPS said that “High demand for raw materials from China will, almost certainly, continue to grow. Stainless production for the first quarter in the country climbed by approximately 20% over 2007 figures. This should limit some of the falls in nickel values. However, additional pressure on supply of ferrochrome could lead to these costs moving even higher in the short term. A modest recovery in nickel cash prices is predicted for the first few months of 2009.”

MEPS added that “Transaction values are predicted to decline throughout the second half of this year. Nickel price falls, coupled with weakening demand, is likely to put downward pressure on selling figures. Consequently, cold rolled coil type 304 numbers are likely to move under $US4200 per tonne by the end of 2008. At that point, grade 316 values are expected to drop to almost USD 6500 per tonne. Uncertainty regarding the financial climate in the US will probably extend into the beginning of next year, with stainless prices drifting lower into early 2009. A modest recovery in prices is then forecast for the second quarter.”

Outokumpu’s board of directors has approved plans to expand its ferrochrome production capacity in Tornio. The EUR 420 million investment will double the plant’s annual capacity to 530 000 tonnes. The investment project starts immediately and the new capacity is scheduled to be available during the first quarter of 2011.

The expanded ferrochrome capacity will make Outokumpu comfortably self sufficient in its primary chromium needs. The ferrochrome smelter is supplied by the Group’s adjacent chromium mine in Kemi. The main benefit for Outokumpu is its ability to source the material at cost while selling it at prevailing market prices.

It is estimated that when the expanded ferrochrome capacity is in use, the positive effect of a 5 cents per pound increase in the contract price of ferrochrome on the group’s operating profit will increase from the current EUR 10 million to some EUR 20 million annually.

Mr Juha Rantanen CEO of Outokumpu is pleased with the ferrochrome expansion project. He said that "After a thorough evaluation, we are ready to proceed with our investment plans. Doubling the ferrochrome production is an exceptionally attractive and profitable project. Already today, Outokumpu Tornio Works is the most integrated stainless steel mill in the world. The investment will support Outokumpu’s strategy realization, maintain cost leadership, secure raw materials and capitalize on our own chromium asset. We have estimated that with current prices the expansion will bring additional annual operating profits in the order of EUR 200 million."

He added that as a result of the expansion, Outokumpu’s electricity consumption will increase considerably. The ferrochrome expansion will increase the group’s annual CO2 emissions by some 270 000 tonnes, because of the use of coke which cannot be substituted in the ferrochrome

It is reported that China’s domestic prices for chrome series alloy continue weakening with big price gap between offer price and transaction price. Demand remains low amidst thin transactions.

Price for imported chrome ore also eased. And Baosteel is reportedly quoting latest purchase price for FeCr 55C1000 at CNY 14500 per tonne, weighing on the current market price.

Price for FeCr 55C1000 is mainly offered at CNY 14800 to 15300 per tonne in northern and northeast regions and high carbon ferrochrome was quoted at CNY 15000 to CNY 15500 per tonne in southwest and CNY 15700 to 16000 per tonne in Shanghai.

Price for trace carbon ferrochrome is quoted at CNY 25000 per tonne in Zhejiang Jiande and contract price for low carbon ferrochrome goes at CNY 27000 per tonne in Gansu.

(Sourced from Mysteel.net)

Mr Pekka Pera CEO of Talvivaara Mining plc said that the first metal from the world's first bioheapleaching nickel mine would be produced on October 1st 2008.

Talvivaara uses the bioheapleaching method to extract nickel from one of the largest known sulphide nickel deposits in Europe and a significant polymetallic resource which presents major zinc, copper and cobalt credits.

Mr Pera said that Talvivaara, headed by non executive chairperson Mr Ed Haslam was achieving 96% to 98% recovery rates using the naturally occurring process of bacteria catalyze leaching other metals from ore to solution.

Leaching was accelerated in industrial mining processes by crushing the ore to increase surface area and bacteria were fed with nutrients to improve productivity.

Irrigation and aeration were the only additional processes, substantially lowering capital expenditure and operating expenditure than in traditional smelting and refining processes. The cleaner and more environmentally friendly process compared to smelting by-pass process stage was already widely used for copper and gold.

It is reported that Western Australia lost a third of its gas supplies on Wednesday after a blast at a gas distribution plant operated by Apache forcing customers to curb usage to maintain production runs.

The biggest buyers of Apache's gas, including Rio Tinto, BHP Billiton and Alcoa Inc said that they are so far keeping up with production by conserving their own gas inventories and in some cases switching to diesel.

The gas was cut off after the explosion late on Tuesday at the Varanus Island gas processing plant operated by Apache Energy a unit of US based Apache Corp, ruptured two gas pipelines transporting gas from offshore fields to the plant.

Mr Tim Wall MD of Apache Energy told reporters that Apache has since declared force majeure on supplies of gas to customers adding there were no injuries and workers had been evacuated safely from the island.

Mr Wall said that a small fire was still burning at the facility and it would be several days before a clear picture of damage emerged. He added that "Once you find the pipe you can get a repair fairly quickly I would think, but we have to get in and make sure there is no other damage.”

Western Australia is one of the world's biggest suppliers of iron ore, gold, nickel and alumina, much fed to burgeoning Asian industrial and consumer markets.

The Nikkei newspaper, without citing sources, reported that Nippon Steel Corp and JFE Steel Corp plan to use very large ore carriers or VLOCs to drive down shipment costs and boost the competitiveness of their steel products in the global market. The Nikkei said that by switching to 300,000 tonne class VLOCs, the two steelmakers will likely save around JPY 10 billion (USD 95.1 million) a year per vessel in shipping costs.

Nippon Steel has been using Mitsui OSK Lines Ltd's Brasil Maru, one of the largest ore carriers in the world, with a 300,000 tonne capacity, since December under a 22 year contract. The newspaper said that Nippon Steel now plans to sign long term contracts for three additional vessels of the same type with shipping companies such as Kawasaki Kisen Kaisha Ltd and Nippon Yusen KK, between this year and 2010. The paper added that four VLOCs operating for a full year would be able to handle about 10% of all of Nippon Steel's iron ore imports.

The paper said that JFE Steel will start using two 300,000 tonne class VLOCs by this summer, following the signing of 15 year contracts with Kawasaki Kisen and Mitsui OSK. These vessels will carry iron ore from Brazil to a Filipino subsidiary for pre processing.

Interfax reported that the coal and gas ejection, which caused the collapse of part of the ArcelorMittal’s Tentekskaya coal mine in the Karaganda region in central Kazakhstan, was caused by natural factors.

The emergency headquarters of Kazakhstan told Interfax that "The preliminary conclusion of the commission is the accident in the coal mine was caused by natural factors. Members of the commission lean toward the theory that what happened should be described as a group accident.”

A source said that "Final results will be announced once we complete the inquiry at the scene.”

A sudden ejection of coal and methane from a coal face on the 193rd conveyor at the Tentekskaya coal mine early morning on Monday trapped five people. Rescue operations are continuing

The Tentekskaya mine is one of the largest mines in the Karaganda coal basin. It is owned by ArcelorMittal Temirtau.

It is reported that Chinese metals trader Sinosteel has raised its stake in Midwest Corp to 28.37% from 19.89% as it seeks to take over the Australian iron ore prospector.

Sinosteel managed to increase its holding even though Midwest's shares are above Sinosteel's offer price trading at AUD 6.76.

The stock has retreated from a high of AUD 7.10 on May 30th 2008 and Sinosteel has said it is confident that its cash bid will eventually trump Murchison's Murchison’s entire stock merger plan.

Sinosteel has offered AUD 6.38 per share for Midwest which is also the subject of a merger proposal from neighboring iron ore miner in Western Australia, Murchison Metals Ltd.

The report added that Murchison has designed its proposal so it does not conflict directly with Sinosteel's bid although both firms are competing to win control of Midwest and Midwest's board has recommended both deals.

According to a report by financial services firm Edelweiss, India's mining industry is projected to touch over USD 30 billion accounting for about 2.5% of the GDP in the next 4 years.

The report said that "Considering India's mineral resources, we believe there is strong potential for further development and scaling up of India’s mining industry. We believe that the mining industry could grow to USD 30 billion plus by 2012 fiscal and reach 2.5% of GDP, if India develops a conducive regulatory framework and attracts significant investment in exploration, mine development and infrastructure."

The report pointed out that India has immense natural resources and is ranked among top 10 globally for deposits in iron ore at 25.2 billion tonnes, coal at 257.4 billion tonnes and bauxite at 3.3 billion tonnes, which constitute 3%, 10% and 4% respectively of the world's resources. India also holds leading position globally in mica, barytes, chromite, kaolin and manganese.

The report said the proposed National Mineral Policy and the allotment of captive coal blocks are the key triggers for future development of mining in India. It added that "As the Indian mining industry scales further, we see both new and existing mining players offering significant wealth creation opportunities to investors."

In September 2005, the Hoda Committee under the chairmanship of Mr Anwarul Hoda was constituted to review the National Mineral Policy, 1993, with an aim to improve the investment climate for mining in India. Some of the highlights of the Hoda Committee report are
1. Prioritizing critical infrastructure needs of the mining sector
2. Review existing procedures for granting reconnaissance permits
3. Prospecting license
4. Mining lease
5. Identifying ways of augmenting state revenues among others

Reuters reported that China's No. 3 coal producer by market value Yanzhou Coal Mining Co Ltd announced that the government of its home province of Shandong had introduced a temporary price cut for some thermal coal in the next three months. The move aims to ensure power supply in the booming eastern province during the summer peak season for usage.

Yanzhou supplies Shandong's power generators with coal on a contractual basis but the government has told the province's coal mines to supply an extra 2.56 million tonnes each month in July, August and September at a CNY 10 per tonne discount to the June price, whereas the spot thermal coal price is around CNY 650 per tonne now, about 25% higher than the contract price

Yanzhou said that the lower price would apply to about 1.5 million tonnes of its production, implying a total reduction in revenue of about CNY 15 million yuan.

Yanzhou's total revenues of CNY 15.1 billion in 2006

Apache Corp has declared force majeure on gas supply contracts after a fire forced the closure of its Varanus Island gas plant off the coast of Western Australia state.

The rupture of one pipeline at the plant more than 100 kilometers off the coast on Tuesday sparked a fire, which then lead to the rupture of two other pipelines.

Mr Tim Wall MD of Apache Energy said that “A small fire is still burning at one of the ruptured pipelines. The company is still assessing the impact of the fires and it is too early to say how long the plant will be closed for. Once you find the pipe you can get a repair fairly quickly, I would think, but we have to get in and make sure there is no other damage.”

The Varanus Island plant supplies about a third of Western Australia's gas, with most of its output going to commercial customers. A number of companies in the state's booming mining sector are now facing disruption, including Alcoa Inc, BHP Billiton Ltd, Newcrest Mining Ltd, APA Group and Burrup Holdings Ltd. Also affected are companies with stakes in the upstream gas fields that feed the Varanus Island plant, including Santos Ltd and Tap Oil Ltd.

Reuters reported that rail transport of coal from Colombia's Cerrejon mine has been restored after a May 27th 2008 guerrilla bomb attack paralyzed transportation to the Caribbean coast.

A Cerrejon spokeswoman told Reuters that "The line was restored Friday night.”

Cerrejon, operated by BHP Billiton, BHP.L, Anglo American Plc and Xstrata, said that the attack took place at kilometer 59 of its track on the route to Puerto Bolivar. No one was injured in the blast, which derailed a 120 wagon train.

Cerrejon one of Colombia's two largest coal miners, produced 30 million tonnes of coal last year and hopes to expand to 38 million to 40 million tonnes by around 2015.

ITRI reported that negotiations to convert lease arrangements by a Glencore subsidiary on several mines in Bolivia into a joint venture with the state mining company Comibol have been successfully concluded.

Ms Katherine Alvarez a spokeswoman for Comibol said that the agreement involves Glencore's Sinchi Wayra tin assets. But she declined to provide details of the agreement.

Sinchi Wayra produces tin and zinc at the Colquiri mine. Current production is some 2,500 tonne per year of tin in concentrate, but there is potential to both increase the mining rate and treat mine tailings. Other news reports state that the joint venture is on a 50:50 basis.

The deal was concluded at the same time as Bolivia’s President Evo Morales issued a decree to seize Transredes Transporte de Hidrocarburos SA, a natural gas pipeline partly owned by Europe's Royal Dutch Shell Plc and Ashmore Energy International. Bolivia nationalized the Vinto tin smelter formerly controlled by Sinchi Wayra in February 2007.

(Sourced from www.itri.co.uk)

It is reported that Navakun Mining Co Ltd is seeking any possibility to get the exploration license for iron ore in Thailand. Currently, they are waiting the approval from the Department of Primary Industries and Mines and the minister.

Navakun is a 100%owned subsidiary of Oxiana Limited, an Australia based company mainly operates gold and copper mining. The company hopes to get the license to explore iron ore at Rayong in Chon Buri of Chachoengsao and Chanthaburi provinces.

Navakun Mining said that "At this stage, we do not know if there is any iron ore in the exploration sites. However, if we find what we want, we will seek the mining license."

Navakun Mining expects that if the exploration was a success, then they will mainly supply the local market and China market.

South Africa's Wescoal said that its mining unit, Wescoal Mining had acquired 60% of a newly formed company to transfer new order prospecting rights, boosting its shares by 4.55%.

Wescoal Mining paid an initial share capital of ZAR 60 for the stake in the new company, meant to transfer the prospecting rights granted by the Department of Minerals and Energy from Proudafrique and other individual owners.

Wescoal which is involved in coal washing and coal trading and sources its coal from mines and other suppliers said that the acquisition is in line with its aim of expanding into the fast growing coal mining industry and to take advantage of high inland and export prices.

Wescoal said that "By becoming a primary producer of coal product, Wescoal can enter new markets such as export, Eskom and the cement industry.”

Proudafrique a black owned company has purchased the remaining 40% of the new company.

It is reported that Adhunik Metaliks Limited has decided to take its wholly owned subsidiary Orissa Manganese & Minerals public.

AS per report, the initial public offer, to be launched in the next 4 to 6 months, is expected to unlock value for Orissa Manganese and the promoters are looking to mop up INR 200 to INR 250 crore from the share sale.

It is reported to have 80 million tonnes of iron ore and 50 million tonnes of manganese reserve. Orissa Manganese has begun the mining of manganese recently, while iron ore production is expected to begin later this year.

Adhunik had bought Orissa Manganese for INR 60 crore sometime back.

BHP Billiton Ltd announced that its Worsley Alumina operation is facing reduced gas supplies due to the fire at an offshore gas plant, but that the impact on production is not yet known.

A BHP spokeswoman said the main impact is reduced output from the calcination process at the plant and the short-term solution to this is to store additional alumina hydrate on site.

She added that "The long term impact on production is not known at this stage.”

BHP said its Nickel West and iron ore operations, which also use gas from the damaged plant, are operating as normal and discussions are continuing with suppliers to ensure an adequate supply of gas.

It is reported that the 300,000 DWT type ore carrier Grande Progresso of Kawasaki Kisen's 100% owned foreign subsidiary was delivered at Ariake Shipyard of Universal Shipbuilding Corporation. Grande Progresso is the first very large ore carrier dedicated for loading at Brazil and unloading at Villanueva in Philippines for JFE Steel Corporation.

The ship measures 327 meter long, 55 meter wide with a depth of 29.25 meter and a draft of 21.4 meter.

In order to be able to handle various loading methods, the vessel is designed with the sufficient hull strength and each cargo hold is equipped with the world's largest single panel hatch cover so as to enable efficient cargo handling. The vessel is also equipped with energy saving devices developed by Universal Shipbuilding, thus enabling dramatically improved propulsive performance and fuel consumption compared with conventional large size ore carriers.

The vessel is the first of the Unimax Ore, the revolutionary 300,000 DWT type ore carrier that has the versatility to enter major iron ore loading ports in western Australia, while having a hull form most suitable for making the best use of very deep water of Villanueva and focusing on very deep water ports in Brazil, one of the largest place of iron ore loading.

Daily Times reported that current power crisis has forced Pakistan’s government to switch to coal based power generation and PKR 500 million is allocated in the Public Sector Development Program 2008-09 for Thar Coal Infrastructure Development.

The report said that Pakistan’s government would develop infrastructure, including road network to access the Thar coal reserves. This is the new project that government would launch during the coming financial year and the decision has been taken to generate electricity from Thar coal reserves, which is not only cheap but will also help overcoming power shortfall.

This is a huge allocation in the Petroleum and Natural Resources Division, as the government allocated PKR 850 million for 19 development projects. Out of total allocation, PKR 500 million has been allocated for this project.

The total cost of the project has been estimated at PKR 1 billion and government would generate money from its own resources. Government has also allocated PKR 22.696 million for the ongoing project of National Coal Policy. The total estimated cost of the project is PKR 23 million. Government has also allocated PKR 35 million for the ongoing project of Feasibility Study Gasification of Thar Coal. The total cost of the project has been estimated at PKR 126.649 million.

The board of directors of Ridley Terminals Inc and the International Longshore and Warehouse Union Canada, Local 523 announced the ratification of a new collective agreement. The term of the contract is seven years, effective May 26th 2008.

Mr Ron Coolin president of Longshoreman's Union Local 523 said that "Our members have a strong and longstanding commitment to Ridley. In the past few years our members have been frustrated with the lack of progress at Ridley Terminals on a number of fronts. However, we are very encouraged with the leadership and decisive action taken by Ridley Terminals's new board, particularly the appointment of a new management team. They have told us that they want to drive the growth of the company. We want to help them achieve that goal for the good of the terminal, our families and the community."

Mr George Dorsey president & COO of Ridley Terminals said that "The terminal's employees are a motivated and professional group of people that care deeply about the performance of this operation. We are delighted to have been able to conclude this negotiation quickly. I am looking forward to working with all employees to provide world class service to customers."

Mr Daniel D Veniez chairman of Ridley Terminals said that "Our new board has launched several initiatives to strengthen governance and improve RTI's competitiveness. Everything we are doing is tailored to securing the future of this strategic asset from the community and to return value to the Government of Canada. This agreement is an important step along that path."

Ridley Terminals Inc is a bulk handling terminal located on Ridley Island at Prince Rupert in British Columbia. It has a capacity of 16.5 million tonnes.

Reuters reported that Yanzhou Coal Mining Co Ltd China's No 3 coal producer by market value had raised spot coal prices for industries other than power generation by CNY 50 to CNY 100 per tonne.

Mr Zhang Baocai Board Secretary of Yanzhou Coal said "Because of tight supply, we raised spot coal prices for other industries, such as coking coal by CNY 50 per tonne to CNY 100 per tonne from last night."

Mr Zhang said this would more than offset an estimated CNY 15 million revenue reduction due to a price cut of CNY 10 per tonne on some thermal coal in Shandong province.

Yanzhou said the government of its home province of Shandong had introduced the temporary price cut for some thermal coal in the next three months, a move aiming to ensure power supply in the booming eastern province during the summer peak season.

Reuter reported that Baosteel Group hailed the first delivery of iron ore from Fortescue Metals Group Ltd recently and said it aimed to further boost cooperation with the Australian group. But officials gave no clear indication on the possibility of Baosteel taking a stake in Fortescue.

At a ceremony to mark the arrival of the first cargo from the Australian iron ore exporter, Mr Xu Lejiang chairman of Baosteel dodged the question of a possible investment in Fortescue saying this was dependent on other factors.

He said "It's not up to me. It's up to whether we can see eye to eye on a number of things, including common goals, development strategy and market positioning."

Chinese business magazine Caijing reported earlier this month that Baosteel was in a slow waltz which aimed at taking a stake in Fortescue, but added that Chinese insistence on control had scuppered past deals.

Mr Andrew Forrest founder & CEO of Fortescue in Ningbo for Fortescue's first shipment of iron ore to Baosteel Group said he would welcome Chinese investment. He said that "The Chinese industrial champion takes Fortescue very seriously and we will encourage its participation in the future of Fortescue."

He added that "We have been in talks with the champions of Chinese industry for five years. We encourage Chinese industrial champions to participate in the future of Fortescue through joint ventures, shares, financing."

Baosteel already has agreements to buy iron ore from Fortescue mines which opened this year and has long been rumoured as a potential investor in the Australian company.

According to Mr Michael Zhu managing director of Vale China, China is expected to import 625 million tonnes of iron ore in 2012 up from a forecast 430 million tonnes in 2008.

Mr Zhu said 'China's apparent consumption of finished steel in 2008 is likely to rise 12% to 442 million tonnes. This is compared to an expected global growth rate of 6.8%. Crude steel production alone in China is seen rising to 540 million tonnes in 2008 as compared to 489 million tonnes in 2007.

He added that Vale would invest USD 59 billion over the next five years compared with the 20.1 billion invested in between 2003 to 2007 in order to keep up with global iron ore demand especially from China.

Mr Zhu said “We will focus on organic growth and massive project development in iron ore, coal, nickel, bauxite and alumina.”

Vale recently agreed to a 65% annual contract price hike for iron ore shipped to China, but China's major Australian-based suppliers have yet to settle.

It is reported that, with hundreds of coal transporters of Coal India Limited’s Central Coalfields Limited observing strike for the last 4 days, a major power crisis looms large over north India due to most of thermal plants in the region running out of stock.

Sources said that the transportation and dispatch of coal from the different mines of the CCL has come to the grinding halt. It has not only resulted in the huge financial losses to Coal India Limited but also affected the coal supply to the Badarpur Thermal Power Station, Punjab State Electricity Board, NTPC, DVC and RVNL in Uttar Pradesh big way.

Sources added that "Almost 80% to 90% of the coal supplied to these power stations is from the CCL and if deadlock continued, the power crisis seems imminent."

It is reported that Coal India Limited has entered into firm supply pacts through its production subsidiaries with approximately 95% of the existing valid linked customers.

According to company sources, out of a total of 1,000 to 1,100 linked customers including the power sector, CIL has so far entered into firm pacts with 900 customers from the non power sector. It is expected to supply coal according to the new policy beginning mid July 2008.

While model fuel supply agreements are circulated to the power sector, firm pacts are expected to be in place within June 30th 2008. This is primarily due to lukewarm response on the part of the states to enter the pact through a nominated agency. In several cases, the states have not even nominated agencies.

It may be mentioned that in the existing system sponsoring agencies from the state are granted linkages to supply to the SME sector. In the new policy, the state nominated agencies will have to enter into firm supply pacts for inclusive of take or pay clauses.

Responding to the call, 9 state governments namely Assam, Chhattisgarh, Jammu & Kashmir, Madhya Pradesh, Maharashtra, Nagaland, Orissa, Rajasthan and Uttar Pradesh have so far entered into fuel supply agreements with CIL subsidiaries. Uttar Pradesh, Maharashtra, Orissa and Chhattisgarh are major consuming centers of CIL coal.

Gujarat, which has a vibrant energy market, has nominated 4 agencies but none entered the pact. Similarly, little response was available from Punjab and Bihar. West Bengal has nominated West Bengal Mineral Development Corporation. However, supply pacts could not be reached as the nominated agency wanted to procure the same through another agency, which is not permitted in NCDP.

FE reported that the sharp increase in coking coal assets globally has dwarfed the USD 2.7 billion war chest of Coal Ventures International.

Mr PK Bishnoi CMD of RINL, who heads CVI, said that prices of coal mines abroad have gone up by 5 to 6 times and their owners are sitting on cash piles. They no longer need equity JVs or any other form of tie up. He added that "CVI may have to go for hostile acquisitions to secure coal assets abroad at the given situation."

Mr Bishnoi said that the government should float a sovereign wealth fund or allocate something from its foreign exchange reserves to support strategic investment. He added that "There can be a greater role of the ministry of external affairs in supporting acquisitions."

CVI had proposed 3 routes to develop coal mines. They are
1. Strategic investment in shares of listed coal companies in Australia, Canada and US
2. Private equity deals with unlisted companies, partners or owners having producing or non producing coal assets
3. Applying for prospecting mining licenses

He said that an apex committee with 5 independent directors has been formed to select the merchant banker. The merchant banker would scout for coal assets in the US, Canada, Australia, Zimbabwe, South Africa, Indonesia, Mozambique and New Zealand. He added that CVI has already identified a block in Mozambique, which could become its first acquisition.

It may be noted that Steel Authority of India Limited, Coal India Limited, National Thermal Power Corporation Limited, Rashtriya Ispat Nigam Limited and National Mineral Development Corporation had contributed a total equity of USD 900 million to set up Coal Ventures International, which also took on USD 1.8 billion in debt.

BL reported that Steel Authority of India Limited is currently holding a stock of about 0.45 million tonnes of imported coal at Visakhapatnam, Haldia and Paradip ports. Of this, the stock position at Visakhapatnam is the largest with more than 0.3 million tonnes followed by Haldia 0.124 million tonnes and Paradip 21,000 tonnes.

According to SAIL sources, at Visakhapatnam, it should be possible to load up to 5 to 6 rakes a day subject to the availability of rakes and the supporting facilities at the port.

Inquiries with the East Coast Railway, responsible for transportation of coal from Visakhapatnam port to Bhilai plant, reveal that against the program allotment of 114 rakes for May 2008, the railway has so far supplied 93 rakes to SAIL at Visakhapatnam port. That means the satisfaction level is over 80%.

A spokesman for the East Coast Railway pointed out that the crux of the problem is that the bulk of the import is unloaded from ships at one particular berth where there is no full length railway line.

BS reported that Orissa based mining company PK Ores is planning to acquire coal mines in Tete province of Mozambique. It has registered a new firm called Triveni PK Mining Company in Mozambique and hopes to acquire the mines soon.

Mr Manas Ranjan Das Pattnaik director of PK Ores said that "We have already applied to the ministry of coal and mines of Mozambique for coal mines which may be allotted soon."

Though the exact size of the deal will be known after a detailed survey, market sources put the value at more than INR 100 crore. This will be the first overseas acquisition by PK Ores. At present, it is executing the drilling and survey work for a Dubai based company called ETA.

Similarly, PK ores is also in talks with the Australian government for acquiring mines there.

FE reported that coal prices will go up by INR 300 to INR 400 per tonne, as the government has made it mandatory for all coal produced in the country to be washed by the producers. This follows the government’s decision to make it mandatory for all coal produced in India to be washed, will now mean spending about INR 1,500 crore to wash coal and about INR 4,000 to INR 6,000 crore to set up such washeries.

According to the government, the benefits of washing coal are many. It will result in reduction of emissions owing to reduced ash content in coal, reduction in the size of the coal handling plant at the power station end with reduction in the size of ash disposal units and smaller ash ponds. Reduction in ash will also result in less wear and tear of machinery, and the railways will carry thermal coal with less ash, resulting in increased freight carrying capacity.

The present cost of such beneficiation works out to INR 15 crore per million tonne of raw coal, with a yield of around 80% of clean and 20% rejected coal. Coal India Limited and its subsidiaries plan to wash about 100 million tonnes of coal, which will translate to a cost of about INR 1,500 crore.

The investment requirement for setting up a washery will vary from INR 400 to INR 600 per tonne of annual capacity. It will mean INR 4,000 to INR 6,000 crore to set up a coal washery. This means the cost of producing washed coal increases substantially and can translate into higher cost of coal for thermal power plants of the country.

Mr Partha S Bhattarcharya chairman of CIL said that it will do the necessary investment out of its surplus. He added that it currently has 7 to 8 washeries and plans to set up 28 coal washeries in the next 2 to 3 years.

Currently Indian coal has around 40% ash content which will reduce to 34% after washing. As there will be around 20% rejected material containing about 20% carbon content, an extra 10% mining capacity would be required to supply the equivalent amount of thermal energy as is available from unwashed coal. Therefore, the 10% additional power generated is almost negated by the additional mining, which needs to be added.

According to Joy Global Inc, demand for metallurgical coal, iron ore and steel are likely to be high in 2008 following low inventory levels with consuming industries.

Joy Global said that the demand and supply gap for coal could reach 60 to 100 million tones in 2008. Steel supply could be 20 to 30 million tonnes less than last year due to shortage of raw materials. The iron ore availability is also tight. Steel demand is rising by 5% to 6% annually on the back of 10% increase in Chinese demand.

It added that "The US has become the swing supplier to the international thermal and metallurgical coal markets and export demand and prices are redefining the domestic market. Due to the renewed strength of this market, the company's strongest growth in its second quarter original equipment orders was generated in North America for both surface and underground equipment."

Joy Global believes that commodity demand will continue to grow, led by the growth from the emerging markets in general, and from China and India in particular, as these countries continue to industrialize. Based on the status of existing expansion projects and industry projections, the company expects that the commodity markets will generally remain in supply deficit for the next 3 to 5 years or longer.

It is reported that a tough task lies ahead of coal companies which have to implement the high profile Jharia rehabilitation plan. The Jharkhand government recently approved the plan and it was now awaiting the consent of the Union coal ministry and thereafter of the union cabinet.

As per report, the challenging job laid ahead of 2 public sector coal companies namely Bharat Coking Coal Company Limited and Eastern Coalfields Limited. They would have to implement the much awaited Jharia rehabilitation plan worth INR 6,300 crore.

Official sources said that if the proposed Jharia rehabilitation plan was cleared, it would necessitate the evacuation of several lakhs of people living in the endangered area of Jharia in Jharkhand. BCCL would construct over 80,000 houses in the safe areas to accommodate all its employees living within the endangered zones. Besides the BCCL employees, Jharia Action Plan would displace large number of people engaged in the industries, shops and establishments there as well as encroachers of the land.

However, industry sources pointed out that some hurdles still stood in the way of shifting of the displaced people from their existing homesteads to the proposed dwellings. Recently, the residents and Jharia Bachao Samiti in association with the central trade unions and a number of political parties adopted a new proposal to save the historical Jharia township.

Jharia Action Plan would displace large number of people engaged in the industries, shops and establishments. Moreover thousands of encroachers had built their homesteads and business establishments. They would also be moved when the Jharia Action Plan implemented.

The Jharia rehabilitation plan received the sanction of the Jharkhand government earlier this year after a specially called high level meeting of senior officials of the concerned coal companies headed by chairman and managing director of Coal India Limited was held in the state capital of Ranchi on May 7th 2008.