Imposition of tax on export of Indian iron ore

Mr P Chidambaram Indias finance minister while presenting the 2007-08 budget in Parliament said "In order to raise revenues and to conserve our natural resources, I propose to impose an export duty of INR 300 per tonne on iron ore and concentrates and INR 2,000 per tonne on exports of chrome ore and concentrates.

Indias domestic steel industry has welcomed imposition of INR 300 per tonne tax on export of iron ores hoping for increased domestic availability to match their mega growth plans. On the other hand, Indian mining industry sees it as a draconian step to make Indian iron ore miners un competitive globally and reduce their margins.

Considering the prevailing FOB spot price of USD 62 per tonne for 63.5% Fe content, the imposition of INR 300 or USD 7 per tonne export tax, works out to about 11% of the FOB price.

The export tax is almost equal to increase in global iron ore prices by 9% for the current year. Indian railway has also offered reduced freight rates for iron ore movement in the recent budget.

The final effect of this move on curbing export of iron ore, increase in availability to Indian steel makers may be at slightly better prices, effect on the profits of Indian iron ore miners and changes in spot prices for Indian ore export remain to be seen.

Reactions to Indian Budget 2007-08

Mr P Chidambaram Indias union finance minter has announced the several new policy changes under the budget for 2007-08 and the reactions from various quarters have been a mixed bag. Indias domestic steel industry has welcomed imposition of INR 300 per tonne tax on export of iron ores hoping for increased domestic availability to match their mega growth plans. On the other hand mining industry sees it as step to make Indian iron ore miners un competitive globally.

Comments and reactions on the budget from the some of the leaders of Indian industry are given below.

Mr SK Roongta chairman of the Steel Authority of India said that Indian government has rightly recognized the need to conserve mineral wealth, especially iron ore, for value addition within the country. He said In this context, levy of export duty on iron ore and concentrates is timely.

Mr B Muthuraman MD of TATA Steel said The introduction of export duty on iron ore and chrome ore was a very welcome move and it would have long-term benefit for the country Restricting export volume could have been considered too.

Mr Moosa Raza president of Indian Steel Alliance said that the levy of INR 300 a tonne on export of iron ore and concentrates was a welcome first step towards reducing exports to zero level in the next five years.

Mr RK Sharma secretary of Federation of Indian Mineral Industries described this move as a draconian one which would deplete the coffers of ore producers. He said "We are unable to fathom why duty was being levied on ore export. This is a draconian move. What needs to be understood is that following the decrease in ore exports, the revenues of ports would also suffer correspondingly. Our competitiveness will be affected by this. Foreign buyers may say that you have to reduce prices to the extent of the tax.

Mr Sanak Misra CEO of Arcelor Mittals Indian operations told The Hindu that this move would benefit all Greenfield projects but added that the company had no reactions to give on the iron ore issue since it was captive sourcing that was critical to its India growth plans.

Mr Naveen Patnaik chief minister of Orissa told media the proceeds of export duty on iron ore and chromes should be transferred to the States in full.

Mr Ankit Miglani director of Uttam Galva Steels Limited said that the tax exemption for coking coal, imposition of export duty on iron ore and reduction of customs duty may have a positive impact on the steel industry.

Mr NC Mathur director of Jindal Stainless Steel said that the good part of the budget is that duty on export of iron ore and chrome ore will now levied. He referred to this move as a welcome step from the industry point of view as it encourages value addition activity. He added that the customs duty on nickel, which currently stands at 5%, should have been made nil.

However, the domestic steel makers were critical of the move to halve import duty on defective and second quality steel saying that this was not conducive to encouraging the use of good quality prime material.

Steel & mining specific changes in Indian Budget 2007-08

Mr P Chidambaram Indias union finance minter has announced the several new policy changes under the budget for 2007-08 and the ones related to steel, mining and construction are tabled below

1. Custom duty reduced on seconds and defectives of steel from 20% to 10%.

2. All coking coal irrespective of ash content is fully exempted from duty.

3. Export duty on iron ore and concentrate at the rate of INR 300 per tonne (About USD 7)

4. Export duty on Chromium proposed at INR 2,000 per tonne (USD 45)

5. Excise duty has been hiked to INR 600 per tonne on cement sold at more than INR 190 per bag in the retail market as compared to INR 400

All the changes are applicable with immediate effect.

Gangavaram port to start operations by March 2008

It is reported that Gangavaram Port, initially with 5 berths, will be ready for trial runs by December and commercial operations by March 2008.

Mr Pranav Choudhary VP of Gangavaram Port Ltd informed that the financial closure of the INR 1700 crore project has been achieved and that the construction work is at an advanced stage for 5 berths intended to handle coal, iron ore, steel, alumina, general cargo and liquid cargo.

Mr Choudhary said that the master plan envisages 29 berths and possibly a back up port if the demand far outstrips what the port could handle down the line. The port has a depth of 21 meters and if required could also reach 35 meters to allow large vessels to come through. The port would be supported by a 2.2 kilometer rail link to Vizag.

PFC contemplating Sasan award to REL Report

Business Standard reported that the power ministry is considering asking Reliance Energy Limited to match the price offered by the Lanco Infratech Globeleq consortium for development of Sasan ultra mega power project in Madhya Pradesh.

The report cites a power ministry source as saying that Power Finance Corporation is reconsidering the earlier award of the project to Globeleq Lanco Infratech in the light of Globeleq walking out earlier this month.

Reliance Energy had submitted second best bid of INR 1.29 per unit against Lancos Globeleq consortiums winning INR 1.19 per unit. After winning the award, Globeleq sold its interest in Globeleq Singapore to a Lanco Infratech and Jindal Steel & Power Limited and it is not clear so far how PFC would review this situation.

NTPC to raise INR 9000 crores for funding expansion plans

National Thermal Power Corporation is likely to raise around INR 900 crore from US based pension funds in the next financial year to fund its capacity addition program under the 11th Plan.

Mr AK Kundu ED finance of NTPC said that in the first phase of the financing program the company would raise INR 9,000 crore, INR 4,500 crore from Asian Development Bank and the rest from other commercial institutions including private placements with US pension funds.

Mr Kundu indicated that around 10 % of the total funds could be raised in the first phase and that the borrowings would be on the companys balance sheet without invoking the sovereign government guarantee.

NTPC is planning to increase its generation capacity from 14,000 MW to 51,000 MW during the 11th Plan period at an investment of INR 100,000 crore over the 5 year period. About 30 % of this will be mopped up as equity while the rest will be debt. ADB has already sanctioned an INR 1,350 crore loan to NTPC.

L&T and TATA Steels Dhamra Port achieves financial closure

Dhamra Port Company Limited, a 50:50 JV company of Larsen & Toubro and TATA Steel Limit has signed a INR 24.6 billion loan agreement with a consortium of lenders led by the Industrial Development Bank of India at Chennai on 27th February 2007 for development of an all weather deep port north of the mouth of river Dhamra in Orissa. It is also working with BNP Paribas for ECA funding.

Dhamra Port will be the deepest all weather port of its kind in India with a draught of 18.5 meters which can accommodate super cape size vessels up to 180,000 DWT. The port will eventually have 13 berths to handle over 83 million tons of cargo per annum. Of these the first 2 berths with a handling capacity of up to 25 million tons of bulk cargo per annum, will come up in the first phase. When fully developed, the port will handle all types of cargo, such as dry bulk, break bulk, liquid and container cargo. The port project includes 62 kilometers rail connectivity to the main Howrah - Chennai line at Bhadrak.

Apart from TATA Steel, mining and steel companies in Orissa, Jharkhand, West Bengal and Chattisgarh are likely to use this port.

Indian Economic Survey outlines need for more reforms

Indian Economic Survey 2006-07 states that the deepening of domestic reforms is required to maintain and further accelerate the current dynamism in exports on a long term basis by reducing constraints like infrastructure bottlenecks and outdated inflexible labor laws.

The survey also recommends a more aggressive push to foreign direct investment in export industries which will not only increase the rate of investment in the economy but also infuse new technologies and management practices in these industries and thereby increase exports.

The survey emphasizes that Indias significant export growth in recent years was on account of a host of favorable external developments and domestic policy initiatives. It also noted that trade policy reforms continued trade promotion, market diversification and trade facilitation efforts seem to have paid good dividends.

Highlights of Indian Budget for 2007-08

Mr P Chidambaram Indias union finance minter has announced the several new policy changes under the budget for 2007-08 and the highlights are given below.

1 Gross budgetary support for plan to be increased to INR 205,100 crore from INR 172,728 crore

2 Non plan expenditure to go up by 6.5% to INR 435,421 crore

3 Allocation for Bharat Nirman increased by 31.6% to INR 24,603 crore

4 Allocation for education increased by 34.2% and for health & family welfare by 21.9%

5 Mid day meal scheme to cover children of upper primary classes in 3,427 educationally backward blocks

6 National means cum merit scholarship scheme introduced for students from class IX to XII; 100,000 scholarships to be awarded every year

7 National rural employment guarantee scheme to be expanded from the current 200 to 330 districts

8 Allocation for SCs and STs substantially increased

9 Provision of INR 108 crore for multi sector development program in districts with concentration of minorities

10 Interest subvention scheme for short-term crop loans to continue

11 National agricultural insurance schemes to continue in present form

12 Death and disability insurance cover through LIC to be extended to rural landless households

13 Under Aam Admi Bima Yojana limit of loans under differential rate of interest scheme for weaker sections raised

14 National Housing Bank to introduce reverse mortgage for senior citizens

15 Allocation for defense increased to INR 96,000 crore

16 Allocation for e-governance increased from INR 395 crore to INR 719 crore

17 Government to support creation of about 100,000 jobs every year for physically challenged

18 For current year revenue deficit to be 2% and fiscal deficit 3.7%. Revenue deficit for 2007-08 estimated at 1.5% of GDP and fiscal deficit at 3.3% of GDP

19 Peak rate for customs duties for non-agricultural products reduced from 12.5% to 10%

20 Custom duties on most chemicals and plastics reduced from 12.5% to 7.5%

21 No change in general cenvat or service tax rates

22 AD Valorem component of excise duty on petrol and diesel reduced from 8% to 6%

23 Excise duty exemption limit for small scale industry increased from INR 1 Crore TO INR 1.5 Crore

24 Service tax exemption limit for small service providers raised from INR 400,000 TO INR 800,000

25 Service tax extended to some new areas

26 Central sales tax to be reduced from 4 to 3%

27 No change in personal income tax rates but threshold limit of exemption in all cases increased by INR 10,000

28 Maximum limit of deduction in respect of medical insurance premium to be increased to INR 15,000; for senior citizens the limit is INR 20,000

29 Corporate income tax rate remains unchanged; surcharge on income tax on all firms and companies with a taxable income of INR 1 crore or less removed

30 Five year income tax holiday for new hotels in NCTD

31 Tax holiday for undertakings in Jammu & Kashmir extended up to March 31st 2012

32 Rate of dividend distribution tax raised from 12.5% to 15% on dividends distributed by companies and to 25% on dividends paid by money market mutual funds and liquid mutual funds

33 Banking cash transactions tax exemption limit for individuals and HUFs increased from INR 25,000 to INR 50,000

34 Additional cess of 1% levied on taxes to fund secondary and higher education

35 Employees stock option plan to be brought under fringe benefit tax.

Rails freight reduction not to effect road transportation

Mr Vineet Aggarwal ED of TCI during an exclusive interview with CNBC-TV18 said that the reduction in rail freight and other incentives announced in the Rail Budget 2007-08 will have no direct impact on the road transportation sector.

Mr Aggarwal told that I think that the Railway Budget has no direct impact on the road sector specifically this one because there has been a cut in freight rates only in specific areas, which anyways did not go to the road sector. Indian Railways has been losing out specifically on the volume business since that is still with the roadways and in spite of the fact that the economy is growing at 9%, the railways should grow by at least 10% to 12% whereas the minister has taken a target of only 8% to 9% in freight growth.

Mr Aggarwal added that The increase in the tonnage will not have a major impact on the road freight rates in the country. So at this point in time, I do not expect a major impact on the freight rates but definitely the Railway should do a lot to augment the capacity as well as increase a rotation of the wagons, so that they are available faster and the rate can come down eventually.

MERC recommends franchisee model for small power plants

Maharashtra Electricity Regulatory Commission has recommended comprehensive changes in the power sector to improve the power supply situation in the state for reducing technical losses and freedom to the private players to function with relative independence.

MERC has developed a franchisee model, under which private players will be allowed to set up small power plants at various places in the state, undertake its distribution and collect payment from the consumers directly. Maharashtra State Electricity Distribution Co will permit private sector organizations to utilize the distribution assets of the licensee Maharashtra State Electricity Distribution located in a designated area.

According to MERC, new small power plants can be located with relative ease as the land requirements will be lower. The proposed scheme is based on the principles of public private partnership model.

MERC has reported that with power shortfall climbing from around 1,000 MW in 2001-02 to 4,200 MW in 2005-06 and further to 5,500 MW at present, there is an urgent need to augment power production and installation of short gestation generation capacity by conventional sources of generation such as liquid fuel.

L&T-Komatsu launches PC130-7 hydraulic excavator

Larsen & Toubro Ltd has announced that its Construction & Mining Equipment Business Unit has delivered the first L&T-Komatsu manufactured hydraulic excavator PC130-7 in Bangalore on February 22nd 2007.

L&T-Komatsus PC130-7, with 89 HP engine, is reported to be having a host of powerful and convenient features that make it the most versatile machine in its class for a range of applications including HydrauMind control system for better maneuverability and is adaptable for working in different operating conditions including uneven terrain and slopes.

L&T-Komatsu PC130-7 hydraulic excavator is manufactured in Bangalore by L&T-Komatsu Ltd the Company's joint venture with Komatsu Asia & Pacific Pte Ltd.

BHEL bags substation orders in Maharashtra from PGCIL

Bharat Heavy Electricals Limited has bagged INR 144 crore orders from Power Grid Corporation of India Limited for a new 400 KV substations and expansion work in Maharashtra.

The World Bank funded turnkey contract is for setting up a new 400 KV substation at Wardha and extensions of 400 KV substations at Seoni Akola Aurangabad associated with the Sipat Super Thermal Power Project State-II supplementary transmission system.

The contract envisages BHEL to design engineer manufacture test, supply erect and commission auto transformers shunt reactors circuit breakers, 400 KV and 220 KV instrument transformers, control and relay panels string insulators and other associated auxiliaries other than complete civil works.

BHEL has earlier set up 400 KV substations for PGCIL at Gazuwaka, Kanpur, Allahabad, Trivandrum and Siliguri, besides undertaking extensions of existing 400 KV substations at Jamshedpur, Rourkela, Farakka Malda, Jeypore Vijaywada Madurai and Sriperumbudur.

Nagarjuna Constructions to raise USD 180 million

Bangalore based leading construction company Nagarjuna Construction Company Ltd plans to raise funds to the extent of USD 180 million by issue of equity shares to qualified institutional buyers or by issue of GDRs, FCCBs or other permitted Securities.

The company has informed BSE that the shareholders at the EGM have given their nod for the move. The EGM also approved the issue and allotment of warrants on preferential basis to an investment company AVSR Holdings Pvt Ltd belonging to the promoters of the company at INR 217 per warrant. The shareholders gave their okay for an increase in investment from 49 % to 74 % and enhancement of authorized capital of the company from INR 50 crore to INR 60 crore.

Japan & Mexico joins USs WTO complaint against China

It is reported that Japan and Mexico have joined the United States in its complaint to the World Trade Organization against increased steel export by China.

The Japanese government on February 16th notified China and the WTO of its intention to join the trade consultations. But an official from Japan said the country is only acting as a third party nation. Government of Mexico announced on February 26th 2007 that it has requested WTO dispute settlement consultations with China on prohibited subsidies and thereby is joining the United States in challenging Chinas provision of certain subsidies that appear to be inconsistent with its WTO commitments.

Ms Susan C Schwab US Trade Representative Ms Schwab said We are pleased that Mexico has decided to join the United States in challenging Chinas use of what we believe are prohibited export and import substitution subsidies. We also welcome recent requests by Japan, Australia and the European Union to participate in the US consultations as third parties. It is important that the international community work cooperatively to encourage China to comply with its international obligations. We will continue to work with these and other trading partners to that end.

United States, on February 2nd 2007, requested World Trade Organization dispute settlement consultations with the Peoples Republic of China regarding its provision of subsidies that appear to be prohibited by WTO rules. Consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel.

AK Steel reaches tentative labor deal at Middletown works

AK Steel Holding Corp announced that it has finally reached a tentative settlement with International Association of Machinists and Aerospace Workers Local Lodge 1943 union at its Middletown Works plant, which would end a year old lockout. No other details of tentative settlement are immediately available.

The proposed contract must be ratified by members of Local Lodge 1943 of the International Association of Machinists, who twice last year voted to reject company offers.

Once ratified, the new agreement would be effective March 15th 2007 and runs through September 15th 2011.

During the lockout period, AK Steel continued to operate the mill with replacement workers and salaried employees.

The lockout is the US's longest major work stoppage since the 20 month-long strike at the Ormet Corp plant in Hannibal in southeast Ohio that ended in July.

TMK Artrom commissions Cross Piercing Elongator pipe mill

Russian pipe major TMKs Romanian unit TMK Artrom announced that a new Cross Piercing Elongator pipe rolling mill has been installed at Slatina in Romania.

The new mill will produce general purpose seamless pipes with diameters of 21mm to 114 mm, which are used in the machine building industry. The mill's annual production capacity is approximately 100,000 tonnes of pipes, which will make it possible to double TMK-ARTROM's current production capacity. In addition, the mill has an inbuilt upgrade option which, if exercised, could increase production by a further 60,000 tonnes of pipes per year.

Mr Dmitriy Pumpyanskiy chairman of the TMK said that The installation of the new equipment is a key event in TMK's strategic investment program, the goal of which is to help the Company become a global player in the international pipe market. By 2010 the Company will be able to produce more than 3 million metric tons of seamless pipes per year.

Mr Konstantin Semerikov CEO of TMK said "This new facility will make it possible to create products that are in demand in both the world and European markets, create new jobs and promote the social and economic wellbeing of Slatina."

TMK Artrom specializes in the production of seamless pipes in the machine building range. The plant was acquired by TMK in March 2006 together with TMK-Resita metallurgical works.

Hot band prices move up in last fortnight

SteelBenchmarker reported an overall jump in hot band prices for the last fortnight

The four benchmark prices for hot rolled band included in the February 26th report are:

1. US
USD 597 per metric ton FOB the mill
Up by USD 17per ton from USD 580 two weeks ago
Down by USD 101 per ton from the peak of USD698 on July 24th 2006

2. World Export Price
USD 562 per metric ton FOB the port of export
Up by USD 27 per ton from USD 535 two weeks ago
Down by USD 48 per ton from the peak of USD 610 on June 12th 2006

3. Western Europe
USD 624 per metric ton ex-works
Up by USD 11 per ton from USD 613 two weeks ago
Down by USD 7 per ton from the peak of USD 631 on July 24th 2006

4. China
USD 442 per metric ton ex-works
Up by USD 5 per ton from USD 437 two weeks ago
Down by USD 22 per ton from the peak of USD 464 on June 12th 2006

SteelBenchmarker publishes steel benchmark prices for hot rolled band, cold rolled coil, rebar and standard plate in the US, Western Europe, mainland China and the world export market twice each month.

CVRD foresees strong global iron ore market

Companhia Vale de Rio Doce is foresees a strong tightness of the global iron ore market. Mr Roberto Castello Branco director of investor relations during a the BMO 2007 Resources Conference stated that CVRD expects the global iron ore market to stay tight for the near future and expects the global demand for iron ore to increase to 215 million tonne from 2006 to 2010 to a total of 885 million tonne of production.

Mr Castello Branco said that a 7% growth in the global iron ore trade, driven basically by China, is forecast this year although the steel manufacturing growth is anticipated to be slower.

Chinas Iron Ore and Steel Association forecast a 13% annual average growth rate for Chinese steel production during 2006-2012. Meanwhile, Middle East nations are becoming the new world growth region with investments in construction and industrial capacity growing dramatically. CVRDs research has also determined that Indian iron export growth will lose steam due to the requirements of Indias expanding domestic steel industry.

Mr Branco said that a 7% growth in the global iron ore trade, driven basically by China, is forecast this year although the steel manufacturing growth is anticipated to be slower. Chinas Iron Ore and Steel Association forecast a 13% annual average growth rate for Chinese steel production during 2006-2012. Meanwhile, Middle East nations are becoming the new world growth region with investments in construction and industrial capacity growing dramatically. CVRDs research has also determined that Indian iron export growth will lose steam due to the requirements of Indias expanding domestic steel industry.

Mr Branco also said that CVRDs goal is to hold minority stakes in steel companies, but intends to focus on mining.

USs January imports down by 11% MoM

American Iron and Steel Institute reported that US imported a total of 2.685 million net tons of steel in January 2007, including 2.153 million net ton of finished steel down by 11% and 13% respectively as compared to December 2006s final data.

Key products with large increases in January compared to the month before included bars reinforcing up by 70%, structural pipe & tubing up by 22%, plates in coils up by 18 % and bars hot rolled up by 11%.

For January, the largest volume of finished steel imports from an individual country was from China at 510,000 net ton a 48% YoY increase over January 2006 and a 9% increase over December 2006. Other notable countries include Brazil at 127,000 net ton, Korea at 114,000 net ton and Japan at 110,000 net ton.

Mr Louis L Schorsch CEO of Arcelor Mittal Flat Products Americas and Chairman of AISI said "We continue to have concerns about the impact that government subsidies are having on the domestic market, a direct violation of trade rules established by the World Trade Organization. We are seeking effective enforcement of US trade laws, preserving rules based trade and allowing free market forces to drive the global marketplace in the steel industry."

JFE planning anti takeover measures report

Japanese Nikkei, without citing sources, reported that JFE Holdings Inc will adopt anti takeover defenses that would allow the steelmaker to issue equity warrants if a potential acquisition threatens its corporate value.

The business daily said that under the proposed arrangement, a suitor seeking to acquire more than 20% of voting rights in JFE will be asked to explain its objectives and how it plans to finance the acquisition and that an independent committee will study the proposal and will decide whether the company should launch takeover defenses.

Last spring, Nippon Steel Corp, Sumitomo Metal Industries Ltd and Kobe Steel Ltd all introduced anti takeover measures.

Acerinoxs 2006 net surges by 225.6% YoY

Worlds second largest stainless steel producer Acerinox SA announced that its 2006 net profit increased by 225.6% YoY to EUR 502.9 million as compared to EUR 154.4 million in 2005. Its 2006 revenues rose by 33.8%YoY to EUR 5.637 billion as compared to EUR 4.212 billion in 2005 and EBIT was up by 232.8% YoY to EUR 858.4 million.

Acerinox said the market has been boosted by high nickel prices and abnormally low stockpiles at the beginning of the year, due to global economic growth.

It earlier announced production figures as under

Volume in million tonnes
Change is with respect to 2005

Mitsui to acquire Steel Technologies

Mitsui & Co has agreed to acquire Louisville, Kentucky based Steel Technologies Inc for about USD 396 million in cash. Steel Technologies shareholders will receive USD 30 in cash, 63% more than last closing price. In addition Mitsui will assume USD 136 million of Steel Technologies debt.

The transaction will close by the end of June and will be financed through Mitsui's existing resources. Mitsui said that Steel Technologies' management team led by Chief Executive Officer Mr Bradford Ray will stay at the company,

Mitsui and Steel Technologies have been partners for two decades in a venture that owns three metals processing plants in the US. About 45% of sales of Steel Technologies are to automakers. Mitsui wants to expand in North America as clients such as Toyota Motor Corp increase spending in the US Toyota plans.

Canada approves Harris Steel takeover by Nucor

Harris Steel Group Inc announced that Investment Canada Act approval has been received for the proposed CAD1.25 billion takeover by US based Nucor Corp. It added that all regulatory approvals have been received now and the offer of CAD 46.25 a share is set to expire Friday morning.

USs Justice Department officials completed their review in early February for purchase of Harris Steel Group Inc of Canada by Nucor Corp and approved the same without taking action.

Harris Steel makes reinforced steel bar, or rebar, for the construction industry, wire mesh for the mining industry and heavy industrial steel grating sold through its Harris Rebar, Laurel Steel and Fisher & Ludlow units.

The acquisition is the largest ever for Nucor. Nucor plans to operate Harris Steel as a subsidiary to broaden the company's geographical reach and growth opportunities.

Citics investment in Cape Preston iron ore project facing hurdles

It is reported that Chinese Citic Pacific has warned government officials that its plans to invest in a magnetite project in West Australia will fail unless it secures firm gas supply contracts.

Citic has planned USD 2.5 billion investment in development of Clive Palmer's mineralogy groups Cape Preston iron ore deposit in Pilbara, which is reported to contain more than a billion tonnes of magnetite iron ore. Citic has now said it cannot secure firm gas contracts and that unless it secures firm arrangements for gas supplies by June 2007 the project cannot proceed.

Mr Larry Yung heads Citic Pacific which has 29% stake from China's state owned trading corporation Citic Group formerly known as China International Trust and Investment Corporation.

Tubacexs 2006 net up by 21.7% YoY

Tubacex SA announced that its net profit for 2006 rose by 21.7% YoY to EUR 30.9 million and its revenue registered a growth of 25.2% YoY to EUR 538.8 million. Tubacex said that EBITDA in 2006 grew by 21.5% YoY to EUR 63.9 million while EBIT was up by 27.8% YoY at EUR 47.2 million.

Tubacex said that it expects 2007 to be a very positive year, given the major investment projects in the energy, gas and oil sectors, where the company has its main clients. It highlighted that this healthy situation and outlook is being reflected in an increase in prices and in the substantial rise in its order book.

Tubacex SA is an industrial Group founded in 1963, dedicated to the manufacture and sale of special seamless stainless steel tubes, exporting to over 50 countries all over the world. In 1999, Tubacex acquired a new dimension after buying the Austrian company Schoeller-Bleckman Edelstahlrohr and the US company Altx Inc. The main clients of the TUBACEX Group belong to the petroleum, petrochemical, chemical, power producing, machining, car manufacturing, food producing, aircraft, nuclear and capital goods industries.

BaoSteel releases steel prices for Q2

BaoSteel has released the notice on its steel prices policy for the second quarter of 2007, effective as of the date of issuance.

All price changes listed below are made on top of the Q1 2007 prices except specified otherwise and are exclusive of 17% VAT.

All prices increases are in RMB
* For April 2007 productions over March 2007 level

The details of changes for long products and tubes are awaited.

(Sourced from MySteel.net)

Smorgon Steel posts increase in H1 profits

Smorgon Steel Group Ltd has reported that its net profit is up by AUD 75.3 million during July to December 2006 from January to June 2006 AUD 60.5 million boosted by a net one off gain of AUD 11.1 million. Its revenue during H1 also rose by 25% YoY to AUD 1.90 billion. Its steel production for the H1 at 467,000 tonnes was up by 6.5% YoY.

Smorgon said that the results are boosted by higher steel prices and increased sales although increased competition put pressure on margins. It said that demand for some steel products notably grinding media and rail wagon wheels was healthy while variable levels of construction activity around the Australia resulted in a more patchy outcome in demand for reinforcing steels.

Mr Ray Horsburgh CEO of Smorgon said trading conditions in the first half were challenging, with lower margins reported in all segments of the business. He said that the company does not see any material change to the trading conditions in second half. He said that imported steel products continue to grow and now have a significant presence in most product segments meaning improved competitiveness will be crucial to future success.

China stops new coal prospecting licenses

It is reported that Chinese government has stopped processing new applications for coal exploration rights to prevent investment in coal mining from overheating. Xinhau quoted some ministry sources as saying that the decision is aimed at preventing an oversupply of coal and keeping coal production stable.

Chinas ministry of Land and Resources announced that the suspension will last from February 2nd 2007 until the end of 2008. Nevertheless, major coal exploration projects approved by the State Council, as well as surveys of coal resources supported by funds from the central and provincial governments will be allowed to continue to set up new prospecting rights.

The State Administration of Mine Safety said the nations crude coal production was 2.325 billion tons in 2006 up by 8.1%.

Mittal Steel Kryviy Rih to increase iron ore production

Ukraines Journal Staff Report citing Mr Georgy Kozenko director of iron ore complex of Mittal Steel Kryviy Rih reported that Mittal Steel Kryviy Rih plans to spend more than USD 130 million in developing its iron ore mining division to boost output to 30 million tons of iron ore by 2009.

Acerinox looking at acquisitions in SE Asia

Worlds second largest stainless steel producer Acerinox SA announced that it is studying possible acquisitions in south East Asia but noted that there is nothing specific on the cards.

Mr Victoriano Munoz chairman of Acerinox SA Speaking to journalists at a presentation of 2006 results said that it would consider an acquisition in the region if it is cheap, attractive and good. He added There is nothing specific, we are studying it. I believe there will be opportunities.

Mitsubishi to take stake in Baffinlands Nunavut iron ore project

Baffinland Iron Mines Corp announced that a large Japanese investment company is putting money into an iron ore project on Nunavut's northern Baffin Island.

Baffinland said that Mitsubishi Corp intends to spend nearly USD 3 million to buy shares in the Toronto based junior mining company, which owns the Mary River iron ore deposit 160 kilometers south of Pond Inlet.

Baffinland said the money from Mitsubishi will be used to pay for the potential development of the project and to explore for more resources.

Ukraines January iron ore exports up by 11.1% YoY

The association of Ukrainian mining enterprises Ukrrudprom reported that Ukraine boosted iron ore exports tentatively by 11.1% YoY in January to 1.61 million tonnes.

Ukraines iron ore concentrate exports up by 13.2% YoY to 223,000 tonnes, sintering ore exports up by 4.8% YoY to 610,000 tonnes and pellet exports grew by 15.9% YoY to 773,000 tonnes.

Mount Gibsons H1 profits up by 24%

West Perth based Mount Gibson Iron Ltd has announced a net profit after tax of AUD 27.4 million for July to December 2006, an increase of AUD 26 million from January to June 2006. Ore mined increased by 340% whilst ore sold increased by 144% compared with the 6 months ended 30 June 2006.

Mr Luke Tonkin MD of Mount Gibson said that "We are particularly pleased with the progress of the Company during the last 6 months in which a large number of strategic objectives have been realized. Mount Gibson has been able to demonstrate a significant increase in production from Tallering Peak in line with forecast 3 million tonnes per annum rates, progressed Extension Hill Hematite to feasibility whilst demonstrating the project's potential to provide significant financial returns, divest in and receive payment for the Extension Hill Magnetite Project which would have diluted shareholders and exposed Mount Gibson to significant debt, and Mount Gibson has successfully completed the acquisition of Aztec Resources Limited which provides Mount Gibson with a high quality asset that delivers an increase in production, increase in mine life, reduction in operating costs, significant exploration upside and mitigates the geographical and infrastructure risks of the Mid West".

Mount Gibson said Over the next 6 months Mount Gibson will focus on consolidating production at Tallering Peak, establishing production from Koolan Island and continuing to prepare Extension Hill Hematite for production in 2009.

Macarthur Coal's H1 profit dips

Australian Macarthur Coal Ltd announced that its H1 profit fell to AUD 42.4 million (USD 33.34 million) from AUD 82.1 million YoY but reaffirmed its guidance for the year. It said that "Macarthur Coal's profits were primarily affected by the 30% reduction in the US dollar coal price in April 2006 from the record previous price.

Ms Nicole Hollows CEO of Macarthur Coal said the company planned to get back to focusing on coal after its move to reduce its reliance on mining contractors. She said "What I'm getting at with back to basics, is concentrating on coal and coal only. We have to concentrate on our owner operator basics."

She said that a good example of the shift in focus was putting on hold the planned AUD 1 billion projects to build a coke making factory near Rockhampton in Queensland, which was revealed in September.

Macarthur Coal confirmed that, despite the weather related delays in shipping, it expected to meet its 4.5 million tonne annual shipping target subject to no further interruptions caused by rain or port congestion.

Macarthur Coal posted a net profit of AUD 149.6 million for 2005-06, boosted by a jump in pulverized coal injection coal, but warned in September that this financial year's result would be significantly lower.

High Court adjourns Ittefaq hearing till March 26th 2007

Pakistans Daily news reported that Lahore High Court has put off till March 26th 2007 the hearing of a petition for winding up three units of the Ittefaq Group of Industries owned by former prime minister of Pakistan Mian Nawaz Sharifs family, to settle bank loans.

The petitioners, National Bank of Pakistan and Corporate Law Authority, submitted that Ittefaq Foundries, Ittefaq Textile Mills and Khalid Siraj Industries had failed to pay their bank liabilities. They sought permission to auction the units to recover the money and formed a committee to oversee the auction. But Mr Mian Meraj Din challenged the sale in the Lahore High Court under the Companies Ordinance.

The Meraj Din family, one of the seven shareholders in the group, claimed that the auction was in violation of Section 284 of the Companies Ordinance. The petitioner said that the government had neither called a general meeting of the shareholders, nor sought their approval before initiating the auction process.