Update on JSW Mozambique coking coal project

DNA Money reported that JSW Steel, which is setting up a 2 million tonne per annum coking coal facility in Mozambique, might not be able to complete its project on time. As per report, JSW had earlier planned to get the project up and running by fiscal year 2010 but due to delays in exploration, it might fail to commission it within the deadline.

Mr Sheshagiri Rao director finance of JSW Steel admitted the implementation of the project has been delayed because of some unavoidable circumstances but said JSW is confident to complete it within the stipulated time. He said that "We were earlier planning to kick off 50,000 tonne capacity by the end of this year which will not be possible, but the overall project will definitely be completed on time.”

Mr Rao said that JSW also wanted to do some exploration activities there, which will also get delayed by a few months. He said that "Earlier, we had employed a contractor who had done the exploration work for the first concession. We continued with the contractor for the second concession too but they could not mobilize the work on time. As a result of this the work got delayed. However, now they have employed a Brazilian contractor and exploration activity has been resumed.”

JSW had acquired a 200 million tonne coal mine in Mozambique in August 2006.

Indian scrap imports drop in 2007

It reported that Indian scrap imports totaled 3.014 million in 2007 a 10.3% lower as compared to the previous year.

The report said that US was the biggest provider of scrap to India at 621,000 tonne increased by 27.2% than the same time of last year. In the mean time, UK took 199,000 tonnes down by 57.3% from a year earlier, Kuwait’s scrap exports to India increased by 6.4% to 185,000 tonnes compared with the previous year.

(Sourced from YIEH.com)

Indian economy to grow by 7.7% in 2008-09

Reuters reported that India's economy is expected to up by 7.7% in the fiscal year ending March 2009 and a tight monetary stance is necessary to bring down inflation to 8% to 9% by March 2009.

In its economic outlook for 2008-09, India Economic Advisory Council said an adverse global economic environment is expected to lower growth in India, widen the current account deficit and pressure the fiscal system through widening subsidy bills.

The panel said fiscal deficit targets for 2008-09 would overreach while revenue deficits would persist. It added that serious fiscal risks were arising from growing off budget liabilities estimated at 5% of GDP.

A majority of forecasts expect expansion in Asia's third largest economy to slow as policymakers struggle to fight rising prices by raising interest rates, tightening liquidity and cutting import duties.

TATA to invest expand captive power plant at Mithapur cement

Project Today reported that TATA Group is planning to invest INR 140 to INR 150 crore to expand its power capacity, from 55 MW to 75 MW, to provide dedicated supply to its cement plant at Mithapur in Gujarat.

The Mithapur plant, which uses fly ash generated in production of soda ash to manufacture cement sold in Saurashtra and Kutch regions of Gujarat, saw its production dip by a quarter to 0.38 million tonne per annum on account of inadequate power and failure of the turbine gearbox in 2007-08. In the financial year 2006-07, the cement plant, which had a capacity of 0.44 l million tonne per annum, produced 0.51 million tonne per annum.

The investment in enhancing power capacity for the cement plant that uses low cost feedstock, including locally available limestone and salt, also includes a long term asset plan that will help guard against equipment failure.

Essar favoring Thunder Bay to build a new pipe plant in US

Essar Global Limited now appears to be favoring Thunder Bay to build a new pipe plant as reported in the Soo Star in Sault Ste Marie.

As per the report, this potential investment in Thunder Bay would provide a strong economic boost to the economy and help diversify its economy. This type of opportunity is too important to the citizens of Thunder Bay for Council to leave the success of this investment totally in the hands of administration. If Thunder Bay is to get this Pipe Plant, members of council must invest some political capital to ensure that it happens.

The report added that “Over the past several months there are indications that Thunder Bay is about to see some positive economic changes. Council is starting to respond to the needs of business that want to create jobs in Thunder Bay. Times they are a changing and the city administration is starting to understand that they can no longer make un realistic demands on business. They are it appears beginning to understand that their actions have a large impact on new business coming to Thunder Bay and on local business wanting to grow or expand.”

In April 2007, Essar Global Limited the parent of Essar Steel, India's third largest steelmaker announced its acquisition of Canada's Algoma Steel for an aggregate value of CAD 1.8 billion to be paid in cash.

Kolkata Port to expedite dredging in Hooghly

BL reported that the Kolkata Port Trust will immediately acquire on charter a dredger to expedite dredging in the Hooghly River. However, the Dredging Corporation of India will do the chartering on behalf of the port, this was decided at a high level meeting in New Delhi recently.

According to the report, steps will be taken to ensure that 2 of the 3 DCI dredgers, which are dedicated to Hooghly dredging but now under repair will resume operation shortly and the third one in October. Right now, only 2 dredgers as against the stipulated 5th are working in Hooghly.

It might be recalled that the Haldia Dock Officers’ forum recently expressed apprehension that the steadily deteriorating draft situation in the Hooghly River near Haldia dock might spell disaster for the dock, entailing its closure.

At a high level meeting attended by the chairman of Kolkata Port Trust, Dr AK Chanda deputy chairman of Haldia Dock, Mr Rajeev Dube director of Marine, Capt AK Bagchi and other senior officials decisions were taken on steps to improve the draft in the river. The steps would include reduction in the width of the channel from the present 460 meters to 345 meters for Haldia and from 400 meters to 300 meters for Kolkata Dock System reduction of the under keel clearance for Haldia and reduction of trim for container vessels calling at Kolkata Dock system.

The report added that it is felt, there will be an immediate increase in draft at Haldia by 0.45 meters and by 0.65 meters from September increase in draft for container vessels calling at Kolkata Dock System by 0.05 meters allowing additional load of four to 5th containers a vessel and increase in draft for lighterage vessels at Diamond Harbor.

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Indian pig iron exports up in 2007

It is reported that India exported 758,190 tonnes of pig iron in 2007 increased by 11.5% than 679,906 tonnes from a year ago.

Among them, shipments to Thailand reached 178,781 tonnes up by YoY 3.1%. Shipments to Japan totaled 162,347 tonnes increased by 69.2% from a year earlier.

It is noticeable that Malaysia increased sharply by 360.4% to 157,683 tonnes from a year earlier.

Shipping firms seek exemption from competition rules

BS reported that shipping liner conferences have requested the Ministry of Shipping, Road Transport and Highways to exempt them from the purview of the competition laws which are in the process of being notified.

As per the report, these liner conferences are an association of cargo ship owners who operate scheduled services. The key function of such an association is to fix the freight rates for various commodities among themselves on the specified routes. There are over 50 liner conferences operating among different ports around the world. Those which operate on Indian routes connecting other counters include the Informal South Asian Agreement, whose members include Maersk Line, Shipping Corporation of India, Evergreen and Hyundai. Others include Far East South Asia Middle East Conference, Chennai Feeder Operators and Asian Feeder Discussion Group.

Globally, all liner conferences enjoy exemption from competition laws in their countries. However, the European Union has now decided to clamp down on the price fixing among shipping liners by withdrawing the exemption made available to liner conferences October 2008. As a result, the London based India, Pakistan, Bangladesh and Ceylon conference consisting of nearly 15th members from different countries had decided to disband itself from October 17th.

Shipping Corporation of India, which is currently a member of this conference has now decided to seek membership with another liner conference called European Liner Affairs Association which apart from Europe also operates on other non European routes. The conferences however are likely to come under the scanner of the competition laws.

Mr Amitabh Kumar director general of Competition Commission of India said that “Any kind of price fixing and market sharing amounts to cartelization that will attract penalty. If the competition laws get notified and enforced, the penalty that the players will be liable to pay is 3 times of their net profit or 10% of their total turnover whichever is higher.”

However, ship owners in India hope that since countries like the US, Singapore and Japan have decided to continue with the exemption given to liner conferences, they too could get a favorable response from the Indian government.

Justifying the formation of such associations, Mr S Hajara chairman & MD of SCI said that “Shipping is a highly capital investment business. Unless and until there is stability in income and freight rates, no player will come forward and make investment. So some sort of coordination among the liner conference would ensure a steady growth for the individual shipping companies.”

Reliance Power to use Sasan coal in other projects

The empowered group of ministers on August 14th 2008 accepted the request of Reliance Power to use excess coal from the three blocks allotted for its 4,000 MW Sasan project in Madhya Pradesh in another power plant of the Anil Ambani group. The three blocks are Moher, Moher-Amlori extension and Chhatrasal, with a combined estimated reserve of 800 million tonne per annum.

The ministerial group, however, laid down a new condition that the surplus coal should be used only for electricity generation and the energy so produced be sold at a tariff to be derived through competitive bidding.

Government approves nine FDI worth INR 294 crore

It is reported that the government of India on August 14th 2008 approved nine FDI proposals amounting to INR 294.4 crore, including the Australia based aluminum firm Rio Tinto's plans to set up a plant.

The report said that major proposals that were approved include about INR 100 crore proposal of JP Morgan India Property Mauritius Company II, to invest in the hotel and hospitality sector. Cable service provider Hathway Cable Systems has also got approval for INR 43.06 crore involving issue of compulsorily convertible debentures while Surat based Span Diagnostics has got the clearance to set up a joint venture.

Around six proposals were deferred including that of ABN Amro Securities to enlarge services by offering value-added financial services to their institutional and other clients. It also deferred the proposal of Aditya Birla Telecom to raise the foreign investment limit to 74% and to act as an operating cum holding company to make downstream investments.

Indu Projects receives USD 77 million from Credit Suisse

Project Today reported that Indu Projects has received an investment of USD 77 million (INR 325 crore) from Credit Suisse to support the company's plans for large infrastructure projects in future.

The proposed investment is the first tranche of an overall committed investment of USD 113 million (INR 476 crore) into the company.

Indu Projects already has investors in the form of Citigroup Ventures, Maple Holdings, IDFC, etc. However, post divestment, the promoters will still hold 70% equity.

DLF preparing the feasibility study for Hyderabad metro

Project Today reported that DLF is currently preparing a feasibility study for the proposed Hyderabad metro link between the IT hub, HiTech City and the Financial District on the outskirts of Hyderabad. Currently, around 90% of the pre feasibility study has been completed.

The Letter of Assurance to the company was issued in April 2008 and the final study is likely to be submitted to the Andhra Pradesh Industrial Infrastructure Corporation by mid September 2008.

According to the initial plan, the metro rail link will start from the HiTech City Multi Modal Transport System Station to the Financial District with 11 stations covering 10.22 kilometer. The state government is developing the Financial District spread over 130 acres of land at Khanamet village near HiTec City which will house the office of the Insurance Regulatory & Development Authority, ICICI Towers which would employ more than 25,000 people, among others. APIIC is looking at an investment of around USD 43 million from private sector partners in a joint venture format for developing the district.

The initial project cost is estimated at around INR 1,643 crore.

NHAI to shortlist bidders for Hyderabad-Vijayawada project

It is reported that National Highways Authority of India is likely to shortlist the bidders for the four laning of the Hyderabad-Vijayawada project on NH 8 on August 19th2008.

The project, under National Highways Development Program Phase III, came under the scrutiny of the ministry, when it received representations against the short listed players by NHAI in early July 2008. The proposed 181 kilometer road stretch will also have six bypass roads at Narketpally, Nakrekal, Akupamula, Kodad, Sheikmohammadpet and Nawabpet.

Power developers worried as States go back on contracts

BL reported that sanctity of contracts is increasingly coming under cloud in the power sector. A spate of incidents involving State Governments annulling big ticket power project pacts and changing parameters midway is raising concerns among project promoters and lenders.

While the Meghalaya and the Arunachal Pradesh governments have rescinded pacts signed with private and PSU firms, the Orissa government has chosen to amend key norms after having already signed MoUs with 13th private developers for setting up projects.

An executive with a private sector firm with interest in hydropower projects in the north eastern region said that “Sanctity of contracts is absolutely critical from any investor’s point of view, be it the project developer or the lending institution. The signing of a contract must reflect the finalization of negotiations and not the beginning.

A decision by the Meghalaya Cabinet to scrap power deals inked by the previous administration with private companies Jai Prakash Power Ventures Limited and Athena Projects Private Limited which were supposed to develop the Umngot and the 2 stage Kynshi project is the latest in the series of such moves by States. The Meghalaya government has decided to invite fresh expression of interests for the projects.

The Arunachal Pradesh government had earlier cancelled NTPC Limited contract to build 2 hydroelectric power projects, the Etalin 4,000 MW and Attunli 500 MW projects in the State at an estimated cost of INR 22,500 crore. This is amid feelers that the State Government has received from private players on taking up these projects and NTPC’s refusal to pay an upfront advance payment sought by the Arunachal government.

NTPC executive said that “Other companies which complied with the demands for advance payments have managed to get on with their projects The Power Ministry is taking up the case with the Arunachal administration on our behalf.”

The Orissa government announced that MoUs signed with 13th independent power producers for a total capacity of 14,990 MW would be amended in line with a change in policy announced by the State. The State government made sweeping changes and has done away with the policy that power generated in excess of 80% plant load factor from the power plants will be made available to the State at a variable cost along with incentives. Instead, the IPPs will be now be required to make 5% to 7% of the power available to the State at a variable cost determined by the State regulator.

ThyssenKrupp successful in renegotiating contracts

Thomson Financial reported that very few customers of ThyssenKrupp AG have firmly refused to renegotiate forward steel contracts to offset higher raw material costs.

Mr Ulrich Middelmann CFO of ThyssenKrupp said that "We are actually making good progress, we have had very constructive talks. A good share of contracts is being adjusted and only a few customers have firmly refused to adjust contracts.”

He said it would be premature to quantify how many customers have agreed to adjust contracts. He said those who refuse will be allocated lower steel quantities in the next round of forward contracts.

Spot prices make up only 10% of ThyssenKrupp's steel pricing contract mix, while some 60% consists of annual or multi annual contracts, making it difficult for the company to pass on to customers soaring raw material costs.

Canada rules on AD on hollow sections

On April 9th 2008, Canadian International Trade Tribunal, pursuant to subsection 76.03(3) of the Special Import Measures Act, has initiated an expiry review of its finding made on December 23rd 2003, in inquiry number NQ-2003-001, concerning certain structural tubing originating in or exported from South Korea, South Africa and Turkey.

As a result, Canada Border Services Agency has initiated an investigation on April 10th 2008, to determine whether the expiry of the finding is likely to result in the continuation or resumption of dumping of the goods.

The investigation has now been completed and on August 7th 2008, pursuant to paragraph 76.03(7) (a) of SIMA, the CBSA has determined that the expiry of the finding is likely to result in the continuation or resumption of dumping of the goods from South Korea, South Africa and Turkey.

A statement of reasons containing additional details concerning the determination made by the CBSA will be issued within 15 days. The tribunal will now conduct an inquiry to determine whether the expiry of the finding is likely to result in injury or retardation to the Canadian industry and will make its decision by December 22nd 2008.

ArcelorMittal SA completes the relining of BF

It is reported that ArcelorMittal South Africa has completed the reline of its Newcastle Works blast furnace and sinter plant ahead of schedule at a cost of about ZAR 300 million.

As per report, the reline of the N5 blast furnace and the sinter plant started in mid May 2008. The sinter plant and blast furnace projects were successfully completed within 42 days and 44 days respectively, before the end of June 2008.

The repair work on the blast furnace included a partial repair of the carbon refractory in the hearth, or bottom cup of the furnace, and a replacement of the water cooled side elements, called staves, together with repairs to the steel sidewalls or shell, higher up in the furnace. The gas scrubbing plant and the hot blast stoves were refurbished.

The reline was an in kind reline with no additional capacity created. However, an increase in production is expected owing to the removal of production limiting factors, such as hearth hot spots and shell cracks.

The refurbishment project was led by ArcelorMittal South Africa’s Newcastle project team, which supervised various subcontractors and artisans from South Africa, Germany, Portugal, the Philippines, Zimbabwe and Holland.

ArcelorMittal South Africa aims to produce 5,132 tonnes of metal a day by the fourth quarter of 2008, up from current 4,660 tonnes a day. The new oxygen enrichment capacity, which is expected by year end, will increase production even further, to 5,440 tonnes a day. The previous blast furnace campaign had produced almost 25 million tonnes of hot molten iron over the last 14 years.

Usiminas Q2 2008 net profit up by 7% YoY

Brazilian steelmaker Usiminas has posted net profit of BRR 861 million in second quarter of 2008 up by 7% YoY as against BRR 802 million in second quarter of 2007. EBITDA rose to BRR 1.46 billion from BRR 1.23 billion.

Domestic sales volumes climbed by 10% YoY to 1.7 million tonnes, accounting for 87% of total sales. Exports slumped by 46% YoY to 255,000 tonnes as it focused on the red hot local market.

Usiminas, whose controlling shareholders include Japan's Nippon Steel Corporation, has raised domestic steel prices three times so far this year by a total of 25%. That helped lift net revenue by 18% in the quarter to BRR 3.97 billion.

Mr Paulo Penido Pinto Marques head of finances & investor relations at Usiminas said that it does not see any more price increases this year, though he didn't rule them out. He added that Usiminas is investing heavily to boost both steel and mining capacity.

In 2009, it plans to start building a USD 5.7 billion steel slab plant in Santana do Paraiso in Minas Gerais state. It has also set aside USD 3.5 billion to boost iron ore output to 29 million tonnes a year in 2013 from 5 million tonnes.

Scrap market to strengthen - UBS Report

The investment bank UBS said that scrap prices would remain high in the future, despite its recent decrease.

It said that due to the price increase of iron ore and coking coal, as well as the main trend of low emission and high efficiency, the demand for scrap has grown much faster than the output of steel, which has resulted in an inadequate supply of scrap.

UBS also expressed that the US export volume of scrap steel would go beyond that of steel production, owing to the weak US dollars.

Siemens VAI secures supply order from Acciaierie Venete

It is reported that Siemens VAI Metals Technologies has received an order from Italian long product producer Acciaierie Venete SpA to supply the mechanical equipment for a new reversing intermediate mill at the company's factory in Mura. The project is due for completion in the second half of 2009.

For the long product rolling line in Mura, Siemens VAI is engineering and supplying the mechanical equipment for a new reversing intermediate mill. This includes 2 vertical and horizontal rolling stands based on Red Ring technology. The scope of supply also includes the fluid systems, a total of 3 spare stands and the engineering for adapting the existing equipment to the new intermediate mill.

With its headquarters in Padua, Acciaierie Venete, is an important producer of long products in Europe. The group's annual steel production amounts to around 2 million tonnes. It supplies a comprehensive range of round and a section product made of carbon and quality steel for construction and other uses and operates six production facilities in Italy, including the Mura factory in the province of Brescia.

Olympic Steel announces Q2 and H1 2008 results

Olympic Steel Inc has announced its financial results for the second quarter and first half of 2008, and the declaration of a special non recurring dividend of USD 1 per share.

Net sales for April to June 2008 quarter totaled USD 363.5 million, up by 31% YoY from USD 277.4 million for April to June 2007 quarter. Net income totaled USD 29.6 million up by 214% YoY as compared to net income of USD 9.4 million. Tons sold increased 5.1% to 353 thousand from 336 thousand in the second quarter of 2007.

Net sales for the first half of 2008 has increased by 18.9% YoY to USD 638.4 million as compared to USD 536.8 million. Net income totaled USD 42.8 million up by 191% YoY as compared to USD 14.7 million.

Olympic Steel’s board of directors has approved an increase of USD 0.01 per share on its regular quarterly cash dividend to USD 0.05 per share. It also approved a special nonrecurring dividend of USD 1 per share. Both dividends are for shareholders of record on September 1st 2008 and payable on September 15th 2008.

Mr Michael D Siegal chairman & CEO of Olympic Steel said that “The dividends were approved as a result of the company’s extraordinary performance during the first half of 2008. Given the company’s strong balance sheet and cash flows, it’s on going increased capital spending initiatives, and the company’s commitment to growth, it was deemed appropriate to reward shareholders at this time.”

Mr Siegal added that “We are pleased that our efforts are gaining market share as we are moving closer to our customers both in business alignment and physical presence. Given the uncertainty surrounding the general economic environment, our outlook remains favorable, yet cautious. We believe we are appropriately positioned in terms of inventory, value added processing capabilities and liquidity to continue performing well through the seasonally slower sales period of the third quarter.”

Oil falls under USD 112 on bearish global demand

It is reported oil dropped below USD 112 a barrel down more than USD 2.50 to its lowest level since early May pressured by faltering global demand, rising supply and a stronger dollar.

Crude has fallen sharply since reaching an all time high of USD 147.27 a barrel on July 11 partly on concern about weakening demand. It fell as low as USD 111.85 the lowest since May 2nd on Friday.

US crude for September delivery was last trading down USD 2.77 at USD 112.24 a barrel by 1420 GMT. The contract will expire on August 20. London Brent's new nearby contract, October, lost USD 2.52 to USD 111.16 a barrel.

Mr Simon Wardell oil analyst at Global Insight said that "It looks like we might be trying to find a short term price floor. We've tested USD 114 and USD 113, we might well hover here for a little while before we make another move. We might get to USD 110 how quickly we get there would depend on the demand outlook. if next week's US inventory data shows an increase in stocks, we could go lower."

The International Energy Agency said supply has been rising as demand ebbs. Output from the Organization of the Petroleum Exporting Countries rose 145,000 barrels per day in July to 32.8 million barrel.

Data showed that oil also fell as the dollar strengthened following further proof that the US economic slowdown is spreading. The economy of 15 nation euro zone contracted 0.2% in the second quarter.

Genrec Engineering inks steel fabrication deal with Murray & Roberts

It is reported that South African steel fabrication specialist Genrec Engineering has signed a contract with Murray & Roberts Mechanical, Electrical & Instrumentation division to fabricate structural steel for the Medupi power station in Limpopo province, which will entail the supply of 105,000 tonnes of fabricated steel for the 6 boiler structures, coal and ash conveyors and auxiliary bay structures.

Fabrication is due to start in October 2008, with the last steel being delivered to the site in October 2012. This equates to an average fabrication throughput of 2,200 tonnes, peaking at about 2,500 tonnes dedicated to the Medupi project. Together with Genrec’s traditional workload, this will necessitate doubling Genrec’s normal capacity within 2 years.

The first challenge of the project will be the fabrication of the boiler superstructures, the columns of which are up to 22 meters long and 2.5 meters wide. They are stiffened internally by means of baffle plates, and must be machined, trial assembled, match marked and then shipped to site for final assembly and erection.

Genrec’s heavy fabrication facility is ideal for the manufacture of these boxes, since there are very few workshops with the cranage, space and machine capacity in South Africa that can successfully take on this task. Another challenge of the project will be the supply of high quality structural plate and sections to grade S355 J2 G3, most of which will require special testing.

In addition to the Medupi power station, Genrec is negotiating with machinery supplier Hitachi, through its client, MEI, to fabricate the steel for the Bravo power station, which is expected to be identical to Medupi, and will be situated in the Witbank area.

As a global partner in steel fabrication and heavy machining, Genrec Engineering offers a mix of engineering facilities, which includes structural steel fabrication, heavy fabrication and machining, a protective coating facility and steel construction.

Taiwanese July 2008 rod imports dips by 47% MoM

It is reported that Taiwan’s import volume of wire rod in July 2008 has decreased by 47% MoM to 17,990 tonnes from June 2008. Size of D<14mm totaled 13,683 tonnes and the average price was TWD 28,730 per tonne.

The import volumes in the January to July 2008 reached 309,391 tonnes, decreased by 16% YoY.

Besides, the exports in July 2008 decreased by 23% MoM to 17,948 tonnes from June 2008. The imports of D<14mm totaled 16,335 tonnes, and the average price was around TWD 27,490 per tonne. The total imports in January to July 2008 period hit 145,412 tonnes, a rise of 4% YoY.

Taiwanese plate imports in July up by 108% MoM

It is reported that Taiwan's steel plate imports in July 2008 rose by 108% MoM to 67,000 tonnes from 57,000 tonnes in June 2008.

Among them, imports of size of T>=50mm totaled 6,981 tonnes and the average price was around TWD 33,430 per tonne. China was the main exporter of plate to Taiwan at 5,153 tonnes.

Besides, the import volumes in the January to July 2008 period increased by 163% YoY to reach 460,000 tonnes.

Siam Steel shares gain most in a year after profit triples

Thai steelmaker Siam Steel Service Pcl share rose the most in one year in Bangkok trading after reporting that second quarter profit more than tripled.

Siam Steel advanced as much as 5.5% to THB 33.75 and traded at THB 33 on the Stock Exchange of Thailand, poised for its biggest gain since August 20th 2007.

Net income rose to THB 194 million in the April to June 2008 quarter from THB 56.5 million a year earlier. Sales climbed by 38% YoY to THB 1.71 billion.

Turkish rebar mills may resume scrap buying from US soon

Platts reported that a major Turkish rebar producer is almost ready to resume buying US ferrous scrap.

The report cited a source from one of the largest buyers of US ferrous scrap on the sidelines of a steel conference at Sao Paulo as saying that "We should begin buying again in about two weeks.”

Should the Turkish mills return to buying as suggested by the source, the renewed demand could provide upward pricing pressure in the market.

Turkish demand for US ferrous scrap has been one the key market demand drivers which has pushed scrap prices to record levels this year. Conversely, the absence of Turkish buyers has been tied by some to the August softening of ferrous scrap prices. The Platts assessed price for shredded ferrous scrap delivered to Midwest US mills slipped USD 350 per long tom in August to a midpoint of USD 565 per long ton from USD 600 per long ton in July.

One large East Coast scrap processor told Platts that Turkish mills require approximately 1 million long tonne if scrap per month in order to feed their operations.

New palletizing plant commissioned at Ardakan in Iran

It is reported that Chador Malu Mining and Industrial Co officially inaugurated production operations at its iron ore palletizing plant located at Ardakan in the central Iranian province of Yazd.

The new palletizing plant, situated near the Chador Malu iron ore mine, has a capacity of 3.4 million tonne per year.

The report added that another palletizing plant with a capacity of 5 million tonne per year will be commissioned by Gol-e-Gohar Iron Ore Co by early 2009.

Abu Dhabi steel prices in H1 up by 91%

Reuters reported that steel prices in Abu Dhabi soared by 91% in the first half of 2008 as demand for construction materials drained the local market.

Official data showed that building material suppliers are struggling to keep up with demand as the UAE witnesses a construction boom buoyed by a near seven-fold rise in oil prices since 2002.

Data from the Abu Dhabi Department of Planning & Economy showed that in the UAE capital Abu Dhabi, rebar prices rose from AED 3,139 (USD 854.6) per tonne in January to AED 6,000 (USD 1,634) per tonne in June. The data also showed that prices of H beams for South Korea rose by 14% in July to AED 6,250 (USD 1,702) per tonne compared with AED 5,500 (USD 1,497) in June.

The data showed that emirate’s steel consumption rose by 24.6% to in 2007 as compared with the previous year. Steel production output in Abu Dhabi hit 830,000 tonnes last year, meeting only 39.2% of steel demand in the emirate. The department in the monthly report said that steel production capacity in the capital is expected to reach about 1.5 million tonnes a year by the end of the 2009.

Small construction firms need escalation clause against price fluctuations

Arabian Business reported that construction contracts that lack escalation clauses are forcing smaller firms out of business.

A Dubai contractor said that even though steel prices have fallen over the past month, steel and concrete prices almost doubled overall this year.

Mr Ani Ray manager of Simplex Infrastructure country manager while speaking on the Construction Week said that "The situation has become terrible over the past four or five months. I am sure that smaller contractors will go bankrupt without escalation clauses. The only option left for them will be to seek business elsewhere. Escalation clauses allow contractors to pass on unforeseeable price hikes to developers.”

Mr Ray said that a fixed price contract signed a year ago could rise in price by as much as 30% before construction has even begun, threatening smaller firms. He said that "The bigger companies are in the upper bracket so it's easier for them. But the problem comes at the lower end.”

Mr Ray said that "Most of the local developers are paying but some of them are not interested. The smaller developers are struggling to afford the increases, so they will not be willing to pay either. If we negotiate a contract today and the price increases by 15% or more, we split that cost between us and the contractor. I think we should both take a hit. We have worked this into our projects because we saw this coming. Both parties want the job to get done."

Mr Imad Al Jamal vice chairman of Contractors Association also agreed and said that "The small and medium size contractor will face bankruptcy definitely. Developers have no choice but to accept the clauses unless they want to stop development. If the contractor goes bust then the bank will go bust and the entire system will go bust. It's as simple as that. But the inclusion of an escalation clause can also affect the smaller developer.”

UAE invites bids for nuclear power plan - Report

Middle East Economic Digest reported that Emirates Nuclear Energy Corp has invited global firms to bid for a contract to manage the Gulf oil producer's nuclear power program. UAE has earlier said that it plans to look into developing nuclear energy to satisfy rising electricity demand as its economy booms on record oil export revenues, straining its power grid.

MMED report said that “ENEC would except bids for a nuclear power project from global firms until September 7 and is likely to award the contract by the end of the year. But it did not give a source.”

Prospective bidders include US construction companies such as Bechtel Corp and Australia's WorleyParsons Ltd.

The UAE has promised to draw up laws to govern the sector and establish a nuclear regulatory authority and an international advisory board of nuclear experts. This year, the UAE signed deals with the United States and Britain about cooperating in peaceful use of nuclear energy. US based Thorium Power which provides advisory services for emerging nuclear program said that it was advising the UAE on setting up an independent nuclear regulatory agency.

Kuwait and China refinery cost up to USD 9 billion

State news agency KUNA cited KPC's head reported that a planned refinery joint venture in southern China between state owned Kuwait Petroleum Corp and Sinopec Corp is expected to cost up to USD 4 billion above initial estimates.

The magazine quoted Mr Saad al Shuwaib CEO of KPC as saying that the Kuwait Chinese refinery and petrochemical project is expected to cost between USD 8 billion to USD 9 billion.

Mr Shuwaib told the magazine that the project, which had been estimated to have a USD 5 billion price tag, got the approval of China's National Development and Reform Commission.

The magazine said that KPC and Sinopec received preliminary government approval for the Guangdong plant in 2006, but negotiations for major projects in the sensitive energy sector can sometimes drag on for years. It said that the refinery will be designed to process 100 percent Kuwaiti crude supplied by KPC, with a capacity of 15 million tons per year or 300,000 barrels per day.

KPC has said it aims to become one of China's top five crude suppliers within three years and in 2008 alone will boost imports to 115,000 barrels per day from 88,000 bpd last year. By 2015, it expects to supply between 500,000 and 700,000 barrels per day of crude to the Nansha plant and a second one in Quanzhou owned by a smaller firm, Sinochem.

Seven more EPZs to be set up soon in Pakistan

Business Recorder reported that Pakistan’s Export Processing Zone Authority will set up seven more export processing zones in the country.

Muhammad Ashraf Wahla GM of EPZA while talking to Business Recorder in Sialkot Chamber of Commerce and Industry revealed that the proposed EPZs would be established at potential sites like Larkana, Multan, Sukkur, Faisalabad, Gwadar, Gilgit and Mirpur Azad Kashmir for boosting export-oriented industries of these areas.

He said that the EPZA has already announced the highly attractive incentives and concessions for the business community for setting up their industrial units in the EPZs of the country for further accelerating the pace of export activities aimed to enhance the export volume of the country.

He disclosed that the incentives like 100% ownership rights, 100% repatriation of capital and profit, no minimum or maximum limit for investment, duty free import of machinery, equipment and material, no sales tax on input goods including electricity and gas bills, foreign exchange control regulation of Pakistan not applicable, freedom from national import restrictions, EPZ manufacturer would be treated at par with bonded manufacturers in tariff areas for any future incentives to be announced for the exporters, relief from double taxation subject to bilateral agreement, inter-unit transfer of finished goods among exporting units allowed.

Mr Ashraf Wahla further told that facilities like one window service and simplified procedure, availability of infrastructural facilities like water, electricity, gas and telecommunication and peaceful, secure and environmentally protected pollution free work area has been ensured in export processing zones of the country.

Pakistan to spend PKR 670 million for engaging consultants

Business Recorder reported that Capital Development Authority is likely to approve PKR 670 million for hiring consultancy services for the detailed engineering design of 6th, 10th and 11th avenues as well as six other projects in its next Development Working Party meeting.

Officials told Business Recorder that the date of the meeting has not yet been decided but it is expected within a few weeks. Officials further said that Mr Kamran Lashari chairman of Capital Development Authority has given strict directives to engineers that while designing the avenues they should consider all the flaws in the previous avenues.

Sources told this scribe that the projects include development work in Orchard Scheme, Murree Road, procurement of machinery for up gradation of street lights system, provision of additional facilities at Pak Secretariat, construction of mosque at Rawal Town, retention wall along J Salik Colony, Sewage Treatment Plants for Rawal Lake, I-15 and I-16.

The official said that 10th Avenue, that would have grade separations at eight places, would join IJ Principal Road with Khayaban-e-Iqbal, passing through sectors F-9 and F-10 on Northern and I-9 and I-10 on Southern ends. The avenue would link IJP Road with Nullah Lai Expressway.

It added that 11th Avenue would start from IJP Road near Pir Wadhai Bus Stand and would culminate at Margalla Avenue, which would provide another connection for the capital city to Peshawar and Lahore. The avenue would have 11 intersections with other roads. 6th Avenue would join Murree Road with Margalla Avenue, passing through sectors F-5 and F-6, CDA official maintained.

Officials said that all the three avenues would be completely signal-free and bridges and underpasses would be constructed at intersections with other roads. Whereas the physical work on the projects would be initiated during the next fiscal year.

Officials added that "The construction of these avenues would lessen the traffic burden and would add more beauty to the capital. It said that out of the three short-listed firms, two have submitted their bids for the execution of the project, which he said are being processed.

Iranian export of non oil goods up by 145% in 2 years

According to Mr Masoud Mirkazemi commerce minister of Iran, export of non oil commodities, excluding gas condensates, increased by 145% during March 2004 to March 2006.

Mr Mirkazemi said the export of non oil commodities plus gas condensates increased by 100% during the same period. Referring to the performance of the ninth government, he said that some USD 43.5 billion worth of non oil commodities, with the exception of gas condensates, were exported abroad during the said period. He said that "The figure indicated 169%t increase compared to the amount exported during the tenure of the eighth government.”

The minister also indicated that over USD 142.4 billion worth of commodities were imported during the same period. Meanwhile, some USD 5.8 billion worth of non oil commodities were exported in the first quarter of the current Iranian year.

Announcing this, the head of the secretariat of High Council for Export of Non Oil Commodities affiliated to Trade Promotion Organization of Iran noted that the figure shows a two fold increase compared to the amount for the same period of the previous year.

Ms Leila Baqeban put the value of the export of non oil commodities, with the exception of gas condensates at USD 4.3 billion showing a 147% increase compared to the figure for the same period the previous year. She said that "Major export commodities included petrochemical products, iron ware, steel, hand woven carpet and pistachio.” She added that the top export destinations of Iranian non oil commodities were the UAE followed by China, Iraq, India and Japan.

Union Properties to raise USD 1 billion

Arab News reported that Dubai listed Union Properties plans to borrow USD 1 billion by the end of the year to help finance projects.

The report added that Dubai's second largest developer by market value is in talks with local and international banks, including Emirates NBD to arrange the loan.

Emirates NBD holds a 48% stake in Union Properties.

Chinese HDG export price further soften

It is reported that hot dipped galvanized coil exports almost have suspended due to collapse in Chinese domestic market prices and softening of international demand and prices.

Domestic market prices continue to its On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 6850 per tonne that for 0.5mm HDG by private steel makers is at CNY 7270 per tonne down by CNY 200 per tonne and CNY 150 per tonne respectively from last Thursday.

Prevailing export quotation for 1.0mm HDG Z120 has dropped to USD 1090 per tonne to USD 1100 per tonne FOB and lower offers have reached USD 1080 per tonne FOB. Transaction prices have slipped to USD 1070 per tonne to USD 1080 per tonne FOB.

(Sourced from MySteel.net)

Sinosteel to set up steel scrap centre in Shenyang

China Business News cited Mr Huang Tianwen chairman of Sinosteel as saying that Sinosteel, China's biggest steel trading house, plans to build up a 1 million tonnes per year steel scrap processing centre in Northeast Shenyang, costing an initial investment of CNY 500 million. The project is slated to run production within two years

Mr Huang said that "Rapidly developing steel industry has produced huge amount of steel scrap, which can be used as substitute for iron ore to make new steel products. And we plan to introduce advanced equipment from US. He said that the company has just concluded takeover of Australian iron ore prospector Midwest Corp, and it continues to show great appetite for securing more reliable raw materials. Steel sector is poised to sustain steady growth in next 10 to 15 years although the rate might ease to 10% to 15%.

He said that "Steel prices are set to hover over a high track given that steelmaking ingredients prices continue to roar up. The squeezed profit margin would phase out those mills with less competitiveness, which would help accelerate the steel consolidation in the sector across the country.”

According to the report a number of its mining projects are slated to come on stream quite soon. It plans to start production at the nickel ore project in Indonesia before the year end, and run its iron ore mine at Cameroon soon. Its iron ore project in Zimbabwe has already commenced operation and its JV ferronickel plant with Baosteel already started production.

Jiuquan produces 2.53 million tonnes of steel in H1

It is reported that Jiuquan Iron and Steel Group produced 2.53 million tonnes of steel in H1 of 2008 up by 2.54%YoY and achieved a gross industrial value of CNY 13.8 billion up by 45.25% YoY.

The group has invested CNY 140 million in building No 3 and 4 CDQ units for completion this September which could recover 76 tonnes of medium pressure gas per hour and generate 20,000 kilowatt of electricity per hour. CNY 55 million have been spent as part of the CNY 80 million worth heat storage update at medium plate plant’s heating furnace.

The first heating furnace was commissioned from late July. Besides, a heat storage update at its stainless HR plant’s heating furnace, costing CNY 70 million will put on stream this November.

Chinese shipbuilder order book reaches almost 12 million DWT

It is reported that China's shipbuilders have received almost 12 million tonnes in July hitting world’s top spot.

As per report, China's shipbuilders were able to seize 60% market share of the world, while the total received order quantity of global shipbuilders in July was 20 million loading tonnes.

However, some marketers have remained concerned about the profits those shipbuilders will actually earn, due to the sharply rising cost of materials and the appreciating RMB this year.

(Sourced from YIEH CORP)

Nanchang Steels to set up Xinchangnan Coking Company

Changli Co Ltd has announced to set up Xinchangnan Coking Co Ltd by investing CNY 22.5 million for 15% shares. The new project, costing CNY 520 million is to build a 960,000 tonnes per year Greenfield coke oven in two years with an annual coke capacity of 1.1 million tonnes and gas of 220 million cubic meters.

Heze Zhongtai Coal Chemical Co Ltd, another partner of the project, currently has a washed coal capacity of 1.2 million tonnes per year and will rise to 4.8 million tonnes by 2010.

Dongbei Special Steel gets loan for environmental projects

It is reported that China Development Bank Dalian Branch and Agriculture Bank of China Dalian Branch made up a bank consortium and extended loans to the moving project of Dalian environmental protection base of Dongbei Special Steel, CNY 3.0 billion and CNY 1.5 billion respectively and jointly signed an Agreement on Financial Cooperation in Exploration on August 13th.

The construction of the project, which was funded CNY 7.1 billion started in 2007 March and will be completed within four years with its plant moving from the downtown of Dalian to the Dengshahe Lingang Industrial Park in a county Dengshaheof Dalian.

Eight specialized special steel production lines will be built in this project, one for forging, the others for producing alloy steel high speed wire rod, small scale alloyed steel bar, large coil, large scale alloyed steel bar and wide and flat die steel. What's more, the steel mill will set up an internationally advanced RD and testing center for new materials and new technologies of special steel with a view to improving the self development and innovation abilities of the enterprise.

The Dalian base will yield 1.27 million tonnes of quality special steel each year after completion of the project and will become a most modernized quality special steel production base over the country, featured emission mass concentration of dust meeting EU' standard, circular usage of sewage and zero emission and 100% reclaim of steel slag.

(Source: www.xinhuanet.com)

China posts more than 40% growth in FDI in 7 months

According to the Ministry of Commerce, China saw a growth of almost 45% in foreign direct investment actually used in the first seven months of this year, due partly to high interest from overseas investors.

But analysts said it should not rule out possibility for short term speculative capital, or hot money, rushing into the mainland through Hong Kong. From January to July, China approved the establishment of 16,891 overseas funded enterprises a decline of 22.15% from the same period last year. However, the FDI actually used nationwide amounted to USD 60.724 billion up by 44.54%.

Mr Mei Xinyu a researcher with the ministry's research institute of foreign trade and economic cooperation said the growth in FDI and the fall in the number of overseas-funded businesses established indicated the project average FDI used had increased substantially.

Analysts said foreign capital was shifting from the manufacturing sector to the service sector and new technology and high-tech projects. Meanwhile, as Mr Wang Chao assistant to the commerce minister said that more foreign funds poured into central and western regions. In the first half, the central region doubled FDI it used, while the western region recorded a 140% growth. Analysts also noted that it was possible for large amounts of hot money to contribute to the fast growing FDI through Hong Kong, which accounted for 40% of the FDI nationwide.

The commerce ministry said that in the first half year, of the FDI actually used nationwide, USD 23.39 billion came from Hong Kong up by 94.5% YoY.

China to install air cooling systems at power plants

According to an office with the state-owned China Huadian Corp, China will be the first country to install million kilowatt air cooling systems in ultra supercritical coal fired power plants.

The cooling facilities, which were entirely domestically designed and built, will be part of the Huadian Lingwu power plant project, located in the northwestern coal-rich and arid Ningxia Hui Autonomous Region.

An official said that the project will have two ultra super-critical generating units of 1 million KW each which will start up around 2011. No cost estimates were given.

Ultra super critical thermal generation is a clean coal technology that relies on very high pressures and temperatures to achieve greater efficiency of fuel use. Because it is more efficient, there is less waste heat but still, almost half of the heat generated isn't converted.

Air cooling saves huge amounts of water, a key consideration in such arid areas as Ningxia. Using this cooling technique will save an estimated 70% of the water that would have been used in conventional water-cooled power units. In this case, it means 24 million tonnes of water annually, enough for the consumption of nearly 800,000 people for a year.

Zhanjiang Steel project fed by local metal resources

According to related authorities in Zhanjiang, Guangdong province rich resources such as limestone for flux, dolomite ore and serpentine ore around Zhanjiang area have been confirmed by the Guangdong Hydrology Bureau after 2 years of exploration in neighboring Zhanjiang area including southwestern Guangdong as well as central and southern Guangxi Zhuang Autonomous Region since August 2006.

These resources could cater to the CNY 140 billion Zhanjiang steel base project, promoted by Baosteel and Shaoguan Steel in May 2006 and designated to produce 20 million tonnes per year of steel, including 10 million tonnes of high grade steel for auto and electric consumer goods.

Sinarskom Tube completes renovation mill TPA-140

It is reported that at Sinarskom Tube plants in Tube Metallurgical Company, completed renovation mill TPA-140 and its main unit roundabout furnace.

It replaced the lining inside the furnace, as well as the basic units and units of mechanical, electrical and power equipment.

Implementation of the repair activities allows for the creation of conditions for sustainable operation of technological equipment for the production of seamless pipes for hot SinTZ.

In repairing the furnace participated profile companies from Ekaterinburg and Kamensk-Uralsky, who conducted the replacement of energy and mechanical equipment, foundation and construction work. By tradition among maintenance crews had been organized labor competition, the outcome of which leads daily. Upon completion of major repair, the best workers, the master and crew were awarded diplomas and memorable prizes.

Russian Technology Corporation and Metalloinvest team up

RBC-News cited Mr Sergei Chemezov head of the corporation as saying that the Russian state owned Technology Corporation and Metalloinvest holding have prepared the feasibility study for the development of the Udokan copper deposit.

He did not reveal the cost, noting that the information would become public soon, adding that the corporation would cooperate with Metalloinvest if the latter won the tender.

The tender will be held on September 17, 2008, and the license for the development of the deposit will be granted for 20 years.

Stroytransgaz net profit in H1 of 2008 up by 23% YoY

RIA Novosti reported that Stroytransgaz, one of Russia's largest engineering company’s net profit calculated to Russian Accounting Standards increased by 23% YoY to RUB 652 million in H1 of 2008.

According to the report, Stroytransgaz revenue dropped by 3% YoY to RUB 17.5 billion in January to June 2008 against the same period last year.

The financial performance was negatively affected by expenses at the initial phase of the implementation of large projects, including the construction of a gas refining facility in Novy Urengoi, West Siberia, and projects to develop the infrastructure of East Siberia's Vankor oil field.

Stroytransgaz is involved in the construction of oil and gas facilities in 17 countries. Its major shareholder is Russian energy giant Gazprom.

RusAl sues LUKoil for disruption of supplies

RIA Novosti reported that RusAl, the world's largest aluminum producer, has filed a suit against oil company LUKoil for the disruption of oil coke supplies.

RusAl said "LUKoil has unilaterally almost halved oil coke supplies to RusAl's largest aluminum plants since April 2008, failing to meet its obligations under long-term contracts. It said under a contract signed between the two Russian companies in 2006, LUKoil undertook to supply oil coke to RusAl until April 2011 for the production of anode paste and anodes. However, in April, LUKoil curtailed shipments while selling oil coke to other customers. At the same time, RusAl has honored its obligations.

RusAl said "As LUKoil disrupted its contractual obligations and its representatives are not willing to enter into a constructive dialogue, UC RusAl believes that the only possible way to resolve the situation and ensure the contract is fulfilled in full is to take legal action."

LUKoil has not yet commented on RusAl's statement.

Saudi Arabia to construct in Turkmenistan gas processing factory

Kazakhstan Today reported that Saudi Arabia plans to construct a gas processing factory in Turkmenistan

This was discussed on August 14th 2008 at the meeting with Mr Gurbanguly Berdymuhamedov President of Kazakhstan in Ashkhabad with a member of the royal family of Saudi Arabia, Prince Mr Meshal bin Abdul Aziz Al Saud.

According to the report, the expert on the company development Saudi ARAMCO, Mr Abdulla Mohammed Al-Subyani and Executive Vice President of oil and gas company Dharhan Global, Mr Adel Mohammed Al-Gosaybi took part in the meeting as well.

The parties discussed prospects of cooperation and questions of realization of joint projects, including civil engineering design of the gas processing factory.

The Prince Mr Meshal bin Abdul Aziz Al Saud during the meeting said that "Large business of the Kingdom is interested in taking part in realization of many perspective investment projects, which have already started or are planned to be realized in Kazakhstan."

KamAZ RAS net profits plunge 50% in 1H2008

RIA Novosti reported that Russian truck producer KamAZ has reported almost a 50% YoY drop in its net profit calculated to Russian Accounting Standards in the first half of this year to RUB 2.6 billion.

Earnings increased 25.6% to RUB 50.5 billion, while gross revenues declined 6.6% to RUB 6.5 billion.

KamAZ, based in the Volga Republic of Tatarstan produces more than 30 models of trucks, as well as trailers, buses, tractors and spare parts. It also manufactures engines, power units, and components.

TGK-4 net profit in H1 of 2008 up by 22.5% YoY

RIA Novosti reported that Russian power generating company TGK-4 net profit calculated to Russian Accounting Standards declined by 22.5% YoY in January to June to RUB 414.8 million.

TGK-4, which has an installed electric power capacity of 3.3 GW and heat capacity of 17,632 Gcal/h its revenues in the reporting period grew 16.9% to RUB 14.68 billion and production cost increased 18% to RUB 12.87 billion.

TGK-4, which operates 25 electric power plants and 664 heating plants across Russia, said its gross profit in the reporting period increased 9.7% to RUB 1.82 billion and operating profit climbed 11.5% to RUB 1.03 billion.

OGK-5's RAS net profit in H1 of 2008 down by 23% YoY

Interfax reported that OJSC OGK-5's net profit according to Russian accounting standards went down by 23% YoY to RUB 569.5 million.

The genco sales revenue increased 35.4% to RUB 20.235 billion while production costs went up by 28.8% to RUB 18.352 billion.

OJSC OGK-5's gross profit remained practically unchanged at RUB 1.9 billion. Sales profit went down 4% to RUB 1.6 billion while pretax profit fell 29.5% to RUB 926.8 million.

OGK-5 was set up under Russia's energy reform program and includes the Sredneuralsk, Nevinnomyssk, Konakovo, and Reftinsky power plants with total capacity of 8,700 megawatts. Italy's Enel is the controlling shareholder in the company with a 59.8% interest, while the Russian government owns a blocking stake.

Rosneft net profit up in H1 surges fourfold

RIA Novosti reported that Russia's largest state run crude producer Rosneft posted an over fourfold increase in net profit calculated to Russian Accounting Standards to RUB 161 billion in H1 of 2008.

Rosneft gross profit almost doubled to RUB 262.4 billion, its sales increased 120% to RUB 210.7 billion and pretax profit went up by 160% YoY to RUB 211.3 billion in the reporting period.

Rosneft's US GAAP net income increased 600% YoY in the first quarter of 2008 to USD 2.56 billion.

In 2007, Rosneft boosted oil output 25% YoY to 100.9 million tonnes.

ThyssenKrupp sees weak stainless steel market

Thomson Financial reported that ThyssenKrupp expects the stainless steel unit to post significantly higher or to roughly double profits in the company's fiscal year 2008-09 compared with the current fiscal year 2007-08.

Mr Ulrich Middelmann CFO of ThyssenKrupp said that he expects the market to remain weak during the current and the next quarter.

Mr Middelmann said that "We are suffering under the market. The uncertainty from nickel prices is clear, customers and service centers are hesitating a lot to order too much."

He said he expects the unit to post between EUR 50 million and EUR 70 million in pretax profit during the current fourth quarter of ThyssenKrupp's fiscal year 2007-08.

ThyssenKrupp stainless steel unit's third quarter pretax profit fell to EUR 98 million euros from EUR 296 million a year earlier, mainly due to lower nickel prices.

US SS surcharges set to fall in September

Buyers of stainless steel in the USA will see a further reduction in the prices of the most popular grades for September 2008, but these could be the last price reductions for a while. Allegheny Technologies, North American Stainless and AK Steel Corporation have all decreased their surcharge prices for Series 304 material by an average of between 6.93 cents per pound and USD 1.41 per pound.

This is the fourth month in a row in which the surcharge for this grade of stainless steel has decreased. The debate around substitution continues, with some distributors saying that it no longer appears to be an issue and other disagreeing. There is some speculation in the market that the price of nickel could increase again in October, once the European holiday season is over and the Olympic Games have ended.

ThyssenKrupp sees cost over run for Calvert complex

ThyssenKrupp AG said that the price of its Calvert complex would rise more than 20% above an initial USD 3.7 billion estimate. That was the largest capital investment announced in the United States in 2007.

Prices for machinery and other items have risen since ThyssenKrupp chose its Alabama site in 2007. However, because the US dollar has since fallen in value against the euro, ThyssenKrupp officials told investors that the mill would not cost any more in euros, the currency in which ThyssenKrupp counts earnings.

Stainless operations at the Calvert plant are on schedule to start in late 2009, followed by carbon steel work in early 2010. However, delays in building the company's new Brazilian mill, which will feed raw steel slabs to mills in Calvert and Germany, continue to mount. The Brazilian complex will now cost EUR 4.5 billion, which is 50% more than the original EUR 3 billion budget.

ThyssenKrupp had already internally raised the cost estimate of its Calvert complex to USD 4 billion. Now it believes that costs for the carbon steel side will rise by 10% over the most recent estimate of USD 2.9 billion, while stainless operations will cost up to 25% above an estimate of USD 1.1 billion.

ThyssenKrupp said that not starting its Brazil mill until late 2009 would likely force it to buy raw steel from others to feed its expanded European mills. It added that the 50% cost overrun in Brazil stemmed from a number of factors. It further added that the decline in value of the euro against the Brazilian real caused spending to rise and considerable delays have also been caused by the deficient performance of key suppliers and extremely bad weather conditions.

Directory of Stainless Steel Supply Chain in China

China remained the world's number one producer of stainless steel in 2007 accounting for more than one quarter of 27.6 million tonnes of global output. China had overtaken Japan as the world's biggest stainless steel producer in 2006 with 6.6 million tonnes in 2006 up by 21.7% YoY. Japan followed China as the second largest producer in 2007 with an output of 3.7 million tonnes. In 2006, China's per capita stainless steel consumption hit 4.6 kilograms, rising above the world average of 4.3 kilograms.

China produced 7.206 million tonnes of stainless steel in 2007 up by 1.906 million tonnes or 35.96% YoY. Import volume hit 1.698 million tonnes down 32.08% YoY and export volume reached 1.303 million tonnes up by 44.78%. Thus net imports totaled 395,000 tonnes including 204,000 tons of semi products and 115,000 tons of narrow plate and exports of HR sheet reached 328,000 tonnes resulting in self sufficiency rate climbing by 15.6% to 75.6%. However, growth of apparent consumption slowed down. Apparent consumption recorded 6.58 million tonnes in 2007 up 630,000 tonnes or 10.59% YoY but 3.61% lower than that in 2006.

As one of the world's fastest growing economies, China has become the most happening place among world steel market over last few years and thus is in the radar of most of global players associated with stainless steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.

Published in July 2008, “Directory of Stainless Steel Supply Chain in China” is one of the top sources of information available on stainless steel related companies in China. It is one of the most comprehensive and accurate directory of Chinese companies that have ever been published. This powerful report is your connection to the entire Chinese stainless steel industries sector.

This report will be extremely useful to businesses that deal specifically with companies from stainless steel industry, ferroalloys, consumable suppliers, raw material sellers, equipment makers and others. Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Chinese stainless steel industries, this directory will save you time and effort in finding the information you need.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

This report covers name and product details of 246 of Chinese stainless related firms in Alphabetical order and product category based. Look at the information you'll get in this directory

• Company name - 246 entries
• Address – 246 entries
• Contact person – 241 entries
• Mobile number – 168 entries
• Phone number - 246 entries
• Fax number - 246 entries
• Email - 246 entries
• Web site - 243 entries
• Category
• Products & Services

Report Summary:
1. Published: July 2008
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You can order your copy at reports@steelguru.com

Condra delivers a 140 tonnes double girder crane to Tati Nickel

It is reported that crane and hoist company Condra has completed and delivered a 140 tonnes double girder maintenance crane ordered by nickel producer Tati Nickel for its Activox project.

Delivered to Phoenix mine in Botswana, the giant crane was the third to be completed by Condra for a crusher plant associated with Activox, a project aimed at doubling Tati Nickel’s yearly production to 22,000 tonnes per year.

Two double girder overhead cranes were delivered in February 2008, to assist with crusher plant construction. The cranes will work alongside the 140 tonnes double grider crane as maintenance cranes after the plant is commissioned. For Tati Nickel, the 140 tonnes K series hoist features electro magnetic dynamic control disc brakes, a standard frame size motor with parallel rotor, double acting limit switches, a solid bronze rope guide and a totally enclosed, splash lubricated gearbox.

Mr Marc Kleiner GM of Condra said that “The experience gained with the Sishen project was instrumental in enabling Condra to meet a lead time of just eight months for the Phoenix crane, which has a very similar lifting method. The company has become confident with bigger machines such as those for Phoenix and Sishen, and is currently working on a tender for a 275 tonnes crane for a company in Germany.”

Condra manufactures Titan hoists for single and double girder formats, including the compact series and the SH series hoists, for capacities up to 16 tonnes, and the K series hoists for capacities up to 275 tonnes.

Olympics limit China iron ore and coal output in July

It is reported that iron ore production in China dropped 22% to 63.74 million tonnes in July from a month earlier while raw coal output fell almost 8% MoM due to strict controls on explosives in the run up to the Olympics.

According to data released by the National Bureau of Statistics, China's July coal output fell to 220.29 million tonnes.

Mr Li Chaolin a Beijing-based industry analyst said that "Many mines have had to restrict output. It said that the production and distribution of explosives have been under strict scrutiny, making increases in mine output virtually impossible.”

Portman to buy iron projects for USD 10 million

Junior explorer Iron Mountain Mining Limited was forced to go into a trading halt due to a mistake made by Portman Limited over a USD 10 million iron ore deal. Portman jumped the gun in releasing a statement to the market over its acquisition of 2 iron ore projects in Western Australia from Iron Mountain, forcing the company to enter into a trading halt.

Both companies have entered into an option agreement over Iron Mountain's Mt Richardson tenement and the Windarling East tenement application, subject to due diligence by Portman.

Under the deal Portman will make an initial payment of USD 3 million on or before October 1st 2008 and Iron Mountain will hold a 2% royalty of the price of iron ore production from the tenements.

Additionally, Iron Mountain will also receive a one off payment of 50 cents per dry tonne on tonnages exceeding 10 million tonnes of an independently verified resource.

In a boardroom radio interview, Iron Mountain managing director Mr Keith Whitehouse said it was a slight mistake on Portman's behalf. He added that "There was an internal mistake at Portman and they announced it a little bit early and we then had to go into a trading halt while the finalized documents were signed."

Coking coal price hike may slow down

China Securities Journal reported that coking coal price will keep rising due to tight supply although downstream markets seem sluggish. However, the price hike may slow down as more and more small coal mines resume productions.

Primary coking coal price in Hebei climbs recently, following similar moves in other regions. Price has gained CNY 220 per tonne for primary coking coal and CNY 230 per tonne for 1/3 coking coal in Handan and Xingtai and CNY 260 per tonne for primary coking coal, fat coal and 1/3 coking coal in Tangshan. The price increment goes in line with that in other regions.

Insiders pointed out further coking coal price increase would be more difficult in early this month when Shanxi Coking Coal Group raised prices.

Prices for downstream steel products kept rising in the first six months, reached the peak in mid Jun and then dropped after a one-month stable operation. Due to weak demand, prices for wire rod, rebar and HRC fall in most regions recently. Statistics from Ministry of Commerce show average price for steel products during July 28 to August 3rd lost 1% from a week earlier.

BYL signs contract with FMG for Cloudbreak mine

It is reported that Brierty Limited has signed a letter of intent worth USD 33 million with Fortescue Metals Group Limited to provide services to the iron ore miner.

Brierty said that it had reached an agreement for the stripping of overburden at Fortescue's Cloudbreak iron ore mine in the Pilbara region of Western Australia. It will commence mobilization activities after contract documentation is finalized.

Work will commence in September and is expected to run for 11 months. It previously worked with Fortescue on the FMG rail project and major earthworks at the port development at Port Hedland.

Mr Dalton Gooding chairman of Brierty said that the contract win was a major boost for Brierty. He added that "The Fortescue contract once signed will lift Brierty's contracted revenue for the 2009 financial year to over USD 140 million. There is strong activity in each of our major markets and we expect an improved performance in the current year."

MMX announces Q2 and H1 2008 results

MMX Mineracao e Metalicos SA has announced its results for the second quarter and for the first half of 2008.

MMX's iron ore production totaled 1.43 million tonnes in second quarter of 2008, with sales of 1.16 million tonnes, of which 57% to the domestic market and 43% to exports markets. Net revenue reached BRR 90.1 million in the quarter reflecting the increase in sales volume from MMX Sudeste and Corumba, higher exports and higher average prices.

In the second quarter of 2008, administrative expenses totaled BRR 12.8 million and sales expenses amounted to BRR 38.3 million, and in first half of 2008, these expenses amounted to BRR 65.7 million and BRR 69 million, respectively.

The second quarter EBITDA was BRR 56 million, positively affected by the decrease in administrative expenses. In the first half, accumulated EBITDA was negative BRR 21.6 million. This indicator expresses the initial phase of MMX's operations, with production volume at a development phase, aimed at reaching full capacity. The Company expects systematical improvements as operations develop leading to sales increase.

MMX recorded a net financial income of BRR 76 million in the first half of 2008 as a result of BRR 22.1 million interest income in the quarter, obtained through the cash investment in marketable securities and BRR 61 million interest income in the first half; a BRR 55 million exchange rate variation gain in the quarter, resulting from the effect of the 9% appreciation of the Brazilian Real in relation to the US Dollar on the foreign denominated debt, and R$68.3 million in the first half; and BRR 1.1 million financial expenses in the quarter, mainly from interest payment on debt, with BRR 45.9 million financial expenses in the first half.

China to ban small coal mines for improving safety record

Xinhua quoted State Administration of Work Safety said that China is to ban the building of coal mines with high gas danger whose annual production capacity would be below 300,000 tonnes according to a new guideline for coal mine safety.

According to the coal mine safety guideline issued by the work safety commission of the State Council, or the Cabinet the country plans to cut the death toll from coal mine gas blasts by at least 20% by 2010 compared with the 2007 figures.

Statistics from the administration showed coal mine accidents killed 3,770 people last year, among whom 1,084 people died from gas blasts.

The guideline orders large-scale coal mines to set up their own rescue teams, while smaller mines must work with neighboring rescue teams to guarantee prompt rescue in case of any accident. It also urged newly-built coal mines to build underground emergency shelters for miners, providing food, water, oxygen, communication facilities and other necessities.

The government has vowed to close more than 4,000 small coal mines to reduce their total number to less than 10,000 by 2010 in a bid to improve industry safety.

Long legal road ahead for mine rail access - Report

It is reported that by all indications, when the Australian National Competition Council makes its recommendation on whether to open the BHP Billiton and Rio Tinto private Pilbara railways to other users, it will again be on the side of smaller miners seeking cheaper haulage. As per repot, the recommendation due on August 29th 2008 will probably be the NCC's final say, but it will be a long time before the issue is close to being settled.

BHP and Rio say any move to let other parties' trains on their four customized Pilbara lines is bound to result in inefficiencies and crimp expansion. Rio said that the NCC's draft recommendation to allow access, if enforced, could cost the economy USD 30 billion. BHP is particularly riled by an NCC suggestion the ACCC could make the miner duplicate all or part of its railway or build other infrastructure and facilities under the act and has presented legal advice to the contrary from QC Allan Meyers.

That is disputed by Fortescue Metals, which is trying to open the railways to offer haulage to other miners through its infrastructure business, which it has flagged floating. After his 2006 success in getting the NCC to recommend declaring BHP's Mt Newman railway open to third party access and despite having it knocked back by former treasurer Peter Costello, Mr Forrest CEO of Fortescue Metals has asked the NCC to declare the three other railways open.

Adding to the big miners' argument is the fact there is no firm framework as to how third party access, supported by a number of smaller WA iron ore hopefuls, would work. There is also the oft lamented state of east coast coal systems, where multi user access has been blamed by the big miners for delays to expansion. Concerning the process by which access would be achieved, the NCC sees commercial negotiations being nutted out between the rail owner and the third party hauler.

The NCC's production process ruling, which would dash all hopes of third-party access if overturned, was upheld by the Federal Court and the Full Bench of the Federal Court and BHP has now taken it to the High Court.

Global miners eye riches of the sub Sahara - Report

It is reported that some Australian miners are preparing to spend up to USD 20 billion to develop new projects in sub Saharan Africa.

BHP Billiton and Rio Tinto are leading the way. The global miners have a combined USD 6.1 billion invested in operating mines in the region and are looking to spend billions more on projects such as Rio's USD 6 billion Simandou iron ore project in Guinea and BHP's proposed USD 3 billion aluminum smelter in the Democratic Republic of Congo.

Mr Roger Donnelly chief economist of Australia's Export Finance & Insurance Corporation said that "Something of a boom in Australian activity is on. All previous booms have passed Africa by. The investment climates have been too hard."

Mr Donnelly and co author Mr Benjamin Ford said in the Lowy Institute report that "That an iron ore deposit in a remote corner of Guinea, a remote country most Australians would have difficulty finding on the map could influence the prospects for a takeover that would represent a major consolidation in the international mining industry was certainly a situation no one would have predicted 5 years ago."

The Lowy Institute report noted that Australia only maintained diplomatic posts in Commonwealth or former Commonwealth countries in Africa and lacked representation in many top mining investment destinations such as Guinea, Zambia and Mozambique.

It added that aid programs by the Chinese government, such as a USD 9.25 billion loan pledged to the Democratic Republic of Congo in return for access to resources, were making it tougher for some Western companies to remain competitive.

Bangladesh draft coal policy returned to the ministry

The New Nation reported that Bangladesh council of advisers asked the Energy Ministry to place the draft National Coal Policy again after further scrutiny for final approval. The report said that the draft national coal policy failed to get final nod at the meeting as the advisers were not unanimous in their views on different vital issues.

Dr Hossain Zillur Rahman Commerce Adviseer while briefing reporters on the outcome of the maiden meeting of the Council of Advisers in the port city held at the Chittagong Circuit House said that "We have discussed in detail the draft National Coal Policy, but we could not arrive at a final decision on it.” He added that the advisers expressed themselves in favor of further examination of the draft national coal policy before final approval by the council.

Meanwhile, highly placed sources in the Energy Ministry said that the council of advisers at the meeting held detailed discussions on the royalty issues, licenses for exploration or extraction from coal fields, land, water and environmental issues before and after extraction.

The draft national coal policy has discouraged export of coal considering the demand for energy in the country. It has also suggested awarding exploration and development license of any coalfield to only state run organization which will be able to embark on JV through competitive bidding. The draft policy also recommended formation of a separate state run organization to be styled Khani Bangla to oversee the coal and mine related activities. It also suggested constitution of a coal sector development committee to 6 the royalty rate.

As per the draft coal policy, licenses for exploration or extraction from any coal field will be awarded through open tenders, whereas the existing rules say that the licenses would be awarded on first come first served basis. On royalty rate issue, the mining rules said that the royalty on coal extraction would be 6% for open pit mines and 5% for underground mines, whereas the policy says that a proposed coal sector development committee will get 6% as the royalty.

Pakistan forms committee to identify iron ore

Daily Times reported that Pakistan’s committee on exploration, mining, leasing and development for preparation of National Steel Policy decided to establish four sub committees for identification of iron ore, public and private partnership in exploration, development of infrastructure and capacity building.

D Imran Khan DG of Geological Survey of Pakistan chaired the meeting. These four sub committees will complete their work by August 24.

The committee also finalized its Terms of Reference including identification of iron ore and coal deposits suitable for manufacture of steel under the public private partnership, development of infrastructure and logistic facilities, identification and acquisition of energy efficient and cost effective technologies suitable for processing local raw material and establishment of mini steel plants at mine heads.

The committee was informed that Pakistan has 947.5 million tonne of iron-ore reserves at Kalabagh, Dilband Kalat District, Kirana Sargodha District, Nizampur NWFP, Pezu, NWFP, Pachinkoh, Chaghi District, Langrial, Hazara Division, Chilghazi, Chaghi District, Amir Chah, Chaghi District, Dammer Niasar, Chitaral District, Chignedik, Chaghi District. The Pakistan Steel Mills is making efforts to increase the portion of local iron ore to 20%.

It was felt that Geological Survey of Pakistan needed to take up the job of preparation of pre feasibility studies so that local and foreign investors could be invited in the mining industry.

Pallinghurst Resources makes it to the JSE list

Miningmx.com reported that Pallinghurst Resources will finally list on the JSE on August 20th 2008 as its chairman Mr Brian Gilbertson and CEO Mr Arne Frandsen deliver on the commitment to their SA backers to list locally before September 14th 2008. The listing has been anticipated several times since the commitment was made in September 2007 in Pallinghurst’s prospectus.

Mr Frandsen said that "The SA listing has not been a priority for us because we will not be raising capital through it and we have been flat-out doing deals over the past year. We undertook to list on the JSE to help our SA investors manage their asset swap position in terms of SA Reserve Bank rules governing foreign investments.”

Pallinghurst’s SA backers invested in the company through its listing on the Bermuda Stock Exchange using their foreign exchange investment allowances. Those allowances will now be freed up when Pallinghurst lists on the JSE which will be its primary regulator.

According to the pre listing statement, Pallinghurst is incorporated in Guernsey and is deemed to be an African Company in terms of the exchange control regulations of the SA Reserve Bank.

China Guodian to spend USD 2.9 billion on Hunan projects

It is reported that China Guodian Corp, the nation’s third largest power producer, plans to invest CNY 20 billion in electricity and coal mining projects in Hunan province in the next three to five years to meet demand.

The National Development and Reform Commission said in a statement that the Beijing-based company will acquire stakes in power stations and boost the development of mineral resources in the southern province. China Guodian, parent of Shanghai-listed GD Power Development Co., received government approval in May to expand into coal mines to help boost production as the nation battles a sixth year of electricity shortages.

Mr Yan Haojun an analyst at Shanghai Securities Co said Hunan, the 13th largest among China's 31 provinces by gross domestic product, has proven coal reserves of 3.4 billion tonnes, more than the nation's annual output of 2.3 billion tonnes. Guodian's investment in Hunan shows the company's intention to ease power shortages there,''. He said that “Provinces such as Hunan and Anhui that supply power to nearby regions suffered shortages in the first half because of a lack of facilities.''

China Guodian will buy the Yiyang power plant from Xiangtou Holdings Group, the commission said in a statement without giving details Xinjiang Projects. The state-owned company is investing 20 billion yuan in electricity projects in Yili in northwestern Xinjiang province. Insufficient coal supplies have boosted domestic prices of the fuel to a record USD 154 a ton in May.

Output of ferroalloy in China by province in 7 months of 2008

It is reported that output of ferroalloys in China by province total 1.74 million tonnes in July 2008 up by 18.7%YoY as compared with 1.46 million in 2007. Output in January to July 2008 reaches 11.31 million tonnes up by 17.6% YoY as compared to 9.62 million tonnes in 2007.

(In million tonnes)

(Sourced from MySteel.net)

Zijin mining to pay CNY 864 million for stake in mining Unit

It is reported that Zijin Mining Group Co owner of China's largest gold mine agreed to pay CNY 864 million for the remaining 40%stake it doesn't own in a mining unit.

As per report Zijin will pay CNY 723.6 million to Shaanxi Runlong Mining Co for a 33.5% stake in Qinghai West Copper Mining Co. It will also pay CNY 140.4 million to Zijin Labour Union for a 6.5% stake. As at the end of 2007, Qinghai West has total assets of CNY 685.9 million.

Exxaro may invest in iron ore in Turkey

Exxaro Resources disclosure that it had allocated about ZAR 56 million to explore zinc, lead, copper and iron prospects in Turkey aroused unusual interest at the group's interim results presentation.

The audience seemed fascinated with the idea that a company from SA, which contains massive mineral wealth, would venture into a country like Turkey, which is not one of the world's top mining destinations and invest a fairly substantial sum of money in it.

Exxaro expected the results of its first phase of exploration in Turkey in a year's time and would then make a decision on how to proceed.

Mr Sipho Nkosi CEO of Exxaro emphasized that it is very early days in the project and it is impossible to say when or whether, Exxaro would establish any operations in the country.

American Creek discovers iron ore targets on Goldmist Project

American Creek Resources Limited reported that preliminary exploration on the Goldmist Project in south central British Columbia has resulted in the discovery of several promising iron ore targets.

The program, which focused on a very large magnetic anomaly identified in a previously flown airborne geophysical survey, resulted in the discovery of massive parallel magnetite seams and pods, some of which exceeded 1 meter in width, with up to 15 meters of surface exposure. Magnetite disseminations, seams and pods appear to be associated to a skarn mineralization in the contact of intrusive gabbros and diorites with carbonate rich volcaniclastic and sedimentary rocks of the Harper Ranch formation. The iron mineralization occurs as massive replacements, seams and pods, averaging 60% to 80% Magnetite, and is developed mostly in the endoskarn.

A ground magnetic survey, utilizing 25x25 meter sample spacing, revealed 3 well defined magnetic zones that correspond with surface exposure and soil anomalies. All three zones, the Iron Ridge (650x250 meters), the Iron Mist (240x300 meters), and the Irony (550x250 meters) have the potential to host an iron deposit. The Iron Ridge and Iron Mist areas also show anomalous high values in Vanadium and Titanium as detected in soil samples.

Preliminary assay results from chip and grab samples taken on the Iron Mist zone also showed elevated levels of Vanadium up to 0.41 % vanadium oxide. The corporation will be submitting a permit application to the ministry of mines for a contemplated fall drill program on the Goldmist Project.

American Creek Resources Limited is a Canadian junior mineral exploration company focused on the acquisition, exploration and development of mineral deposits within the Province of British Columbia in Canada.

Ausquest reports 38 million tonne iron ore resource at Rocklea

AusQuest Limited announced the completion of a maiden resource estimate for its 75% owned Rocklea Channel Iron Prospect. The Inferred Resource, which was prepared by Golder Associates Pty Limited, comprises 37.6 million tonnes grading 53.2% Fe.

In addition, AusQuest reported an exploration target of up to 23 million tonnes at similar grades to the inferred resource for the Rocklea Prospect, providing an immediate target for in fill and extensional drilling to further increase the JORC Code compliant resource.

The announcement of a maiden resource estimate for Rocklea, together with progress at the company's other promising exploration prospects in the Tom Price Paraburdoo region, has enhanced the value of AusQuest's Pilbara iron portfolio. In light of this and other recent industry developments, the company intends to step up its iron ore exploration activities in the region during the second half of this year.

The Rocklea resource estimate is based on data from RC drilling with drill holes variably spaced from 100 meters to 200 meters along sections roughly 200 to 400 meters apart. The resource was estimated in accordance with the guidelines of the Australasian Code for reporting Exploration Results, Mineral Resources and Ore reserves using a 50% Fe lower cut off grade and a specific gravity of 2.7. No mining parameters were applied to the model.

Higher iron grade intersections (>55% Fe) occur in a number of drill-holes, however resource estimates at higher iron cut-off grades could not be completed as the drill density is insufficient to interpret continuity of the higher grade mineralization between drill holes and drill sections with the required degree of confidence for JORC compliance.

SA coal production not increasing fast enough - Eskom

The current growth rate of South Africa’s coal production lags Eskom’s needs significantly. From 1999 to 2007, the average burn rate grew by 4.5% a year, while the country’s production rate grew by only 1.4% a year, which is the reason why Eskom has a supply problem.

Mr Piet Viljoen of Eskom said that “The mines did not grow and did not plan to grow. At those sorts of prices it is obvious that mining companies exporting coal do not want to supply Eskom. Mining companies are starting to export lesser qualities, which leaves no coal for Eskom. If they are able to sell the same quality of coal on the export market that they can sell to Eskom, then it is obvious that they will choose to export as they will get a higher income. This will have a detrimental impact on Eskom and the country.”

He added that South Africa needs to increase coal production. He said “It is getting more difficult for Eskom to find reliable contractors for coal, because the mining companies rather want to place their coal on the export market. Eskom has to beg for coal and now we are trying to turn this around by speaking to the smaller mining companies for coal. We cannot afford to lose one ton of coal. Don’t complain about not having electricity if you are not willing to pick up the coal and send it to the power station.”

He said that Eskom is looking at upgrading roads to make up for its excessive road usage to transport coal, and add a new railway line to service its power stations. He added that “We have been in talks with Transnet for an integrated logistic network for Eskom. We committed to spending ZAR 40 million on a pre feasibility study to build a new railway line to the Waterberg. The railway will supply Majuba and all the other stations to take the trucks off the roads.”

He further added that “Things such as road conditions, mining rights, the export market, and the shortage of skills are working against Eskom, and if they are not going to be resolved, Eskom will never meet its tonnage needs. Any delays will increase short term contract dependence, which means that, if Eskom pays more for coal, electricity will be more expensive.”

National Coal loss widens in Q2 as equipment breaks

National Coal Corporation said that it posted a deeper second quarter loss as a key piece of equipment broke down, hampering production and revenue.

For the April to June 2008 quarter, it reported a loss after paying preferred dividends of USD 9.9 million as compared with a loss of USD 7.7 million, a year earlier. Revenue jumped by 67% YoY to USD 31.6 million from USD 18.9 million.

Mr Daniel A Roling president & CEO of National Coal said that the results were primarily due to the breakdown of a dragline, a heavy piece of equipment used in surface mining. He added that "The dragline is the most cost efficient piece of equipment we use on our surface mines in Alabama. When it was taken out of service, the company was forced to utilize more truck and loader equipment spreads in applications that are typically more appropriate for dragline operations."

Total operating expenses increased by 56% YoY to USD 36.7 million from USD 23.5 million. Tonnes of coal sold during the period rose by 23% YoY to 458,245 from 372,341 a year earlier.

National Coal employs about 350 people and has mines in East Tennessee and Alabama. It sells steam coal to electric utilities and industrial companies in the Southeastern United States.

Western Canadian Coal swings to profit in Q1

Western Canadian Coal Corporation has announced a swung to a profit in the first quarter, compared to a loss last year. Revenue for the quarter more than doubled from the prior year.

Western Canadian Coal recorded a quarterly net income of CAD 50.705 million as compared to a net loss of CAD 3.057 million a year ago. Revenue for the first quarter surged to CAD 130.393 million from CAD 54.214 million a year ago. Income from mining operations was CAD 53 million as compared to a loss in mining operations of CAD 4 million in the previous year.

Coal volumes sold for the first quarter declined to 583,000 tonnes from 629,000 tonnes a year ago. Average realized price of coal for the quarter was CAD 224 per tonne, up by 166% YoY from the prior year.

Mr John Hogg CEO of Western Canadian Coal said that "The second quarter is expected to be stronger as we achieve the full benefit of the current high coal price for all of our production, expect an improvement in the ratio of clean coal produced to waste removed and lower our mining costs."