Essar to acquire Algoma Steel for CAD 1.85 billion

Essar Global Limited, through its wholly owned subsidiary Essar Steel Holdings Limited and Algoma Steel Inc announced that they have signed a definitive arrangement agreement providing for the acquisition by Essar of all of the common shares of Algoma for CAD 56 per share or an aggregate equity value of CAD 1.85 billion, payable in cash.

The offer price represents a premium of 48% to Algoma's volume weighted average stock price for the 20 day period ending on February 14th 2007 when Algoma confirmed that it was in discussions regarding a potential transaction.

Under the terms of the agreement, Algoma will undertake a court approved plan of arrangement pursuant to which an Essar subsidiary will acquire all of the shares of Algoma in consideration for CAD 56 in cash per share. The arrangement must be approved by Algoma's shareholders by the affirmative vote of at least 66 33% of the votes cast, in person or by proxy, at a shareholders meeting, and is subject to customary closing conditions including necessary regulatory approvals. The support agreement provides for payments to Essar in the event that the acquisition is not completed under certain circumstances.

The deal is unanimously endorsed by the Algoma board but conditional on the approval of two-thirds of shareholders. The company said it expects a shareholders' meeting will be held in June and that the transaction will be completed shortly after.

Genuity Capital Markets is acting as exclusive financial advisor to Algoma in the transaction. UBS Investment Bank is acting as exclusive financial advisor to Essar and sole arranger of Essar's transaction financing. Stikeman Elliott LLP is acting as legal counsel to Essar and Torys LLP is acting as legal counsel to Algoma Steel.

Algoma Steel Inc is an integrated steel producer based at Sault Ste Marie in Ontario with steel shipments of 2.4 million tonnes in 2006. Revenues, which totaled CAD 1.9 billion in 2006, are derived primarily from the manufacture and sale of rolled steel products including hot and cold rolled steel and plate. Algoma has undergone two court protected restructurings since the 1990s and previously failed to find a buyer after putting itself up for sale in 2005.

Mr Benjamin Duster chairman of Algoma's board of directors said "The Board of Directors unanimously supports the Essar proposal as it reflects a significant premium to the historical share price of Algoma. This transaction will also benefit Algoma's employees and the City of Sault Ste. Marie as it will result in new ownership that is committed to investment in Algoma's facilities to support growth and business sustainability."

Mr Shashi Ruia chairman of Essar Global Limited said "We believe Algoma is an excellent addition to our existing steel business and also offers growth potential. This acquisition fits in with our global steel vision of having world class low cost assets, with a global footprint. Algoma provides us with an excellent platform for the Canadian and North American markets. We are impressed with Algoma's management team and employees and look forward to working with them to enhance our industry leadership."

SAIL gets Sitanala coking coal block in Jharkhand

Steel Authority of India Ltd announced that as per a recent communication received from ministry of coal, central government has decided to allot Sitanala coking coal block in Coal India Limiteds subsidiary Bharat Coking Coal Limiteds command area to SAIL to meet the its coal requirements for its integrated steel plants.

SAIL had evinced interest in the Sitanala block in October 2005 and according to industry sources, Sitanala has reserves of around 108 million tonne of coking coal.

SAIL already has 3 collieries, Chasnala with reserves of 40 million tonne, Jitpur with 16 million tonne and Ramnagar at 150 million tonne.

SAILs present coking coal requirement is around 15 million tonne out of which around 10 million tonne is imported. According to the corporate plan 2011-12 SAIL would have 22 million tonne crude steel capacity by 2012, which would require around 23 million tonne of coking coal.

As per reports, SAIL has also indicated interest in the Kapuria block in Orissa which has reserves of around 40 million tonne. SAIL is also in discussions with BCCL for floating a special purpose vehicle for joint mines development.

NMDC plans USD 3.2 billion expansion

National Mineral Development announced that it will spend a total of INR135 billion or USD 3.2 billion to raise output, build steel and iron plants and invest in coal mines overseas.

Mr B Ramesh Kumar chairman of NMDC said that the company will invest INR 35 billion to raise iron ore production by 85% and a further INR 90 billion will be spent on iron, steel and power plants while INR 10 billion would be earmarked for coal mine purchases.

Mr Kumar added that "We are in discussions with companies like Steel Authority of India Limited and Rashtriya Ispat Nigam Limited to partner us for the steel plant. We have received approval for all these projects."

National Mineral currently produces about 27 million tons of iron ore every year and plans to increase it to 50 million by 2015. NMDC also plans to set up a 2 million ton steel plant, two pellet plants, a sponge iron plant and a 300MW power plant in Chattisgarh.

SAILCON to provide consultancy to Gujarat NRE for coke oven based power plants

It is reported that Steel Authority of India Limiteds consulting division SAILCON has entered into an agreement with Gujarat NRE Coke Ltd for providing consultancy services for the implementation of the Gujarat NREs power plants. SAILCON will execute the job with the assistance of SAIL's Centre for Engineering Technology located at Ranchi.

Gujarat NRE has firmed up its plans to set up 2 coke oven waste heat based 15MW each power plants at Bhachau in Gujarat and at Dharwad in Karnataka at an investment of INR 50 to INR 55 crore each. The power plants are being designed by using the heat of the flue gas generated from the Gujarat NREs coke oven batteries. The power plants are expected to be commissioned within 24 months.

Gujarat NRE also has plans to set up a 3rd Power Plant for 15 MW at its Jamnagar coke works which would be implemented in the 2nd phase. Mr Arjun Kumar Jagatramka vice CMD of GNCL said that Once both these plants are operational, the company will set up another plant at Khambhalia in Jamnagar district within six months time.

SAILCON is the single window provider of design, engineering, technical, management and training consultancy and services in iron & steel and related areas. An ISO-9001:2000 certified unit, SAILCON is equipped to render services from concept to commissioning and has been executing number of projects in steel plants and power plants, both in India and abroad in countries like Saudi Arabia, Iran, Philippines, Taiwan, Thailand and Georgia.

NMDC sees no basis for iron ore price cut for domestic steel majors

ET has reported that Indias largest public sector iron ore producer National Mineral Development Corporation has strongly protested the demand by a clutch of private sector steel majors to reduce the price of domestic iron ore in response to lower net sales realization due to imposition of export levy of INR 300 per tonne on iron ore exports.

The report cites a NMDC source as saying that In our view there is no basis to any demand for a price cut in the domestic market, because of a lower net sales realization in export market. Domestic prices are fixed according to a formula stipulated by the government based on P Ganeshan committees recommendations.

As per the pricing formula, there is a basic price which is fixed and agreed between NMDC and the buyer. The variation in international price is factored into the domestic price. NMDC sold iron ore fines at INR 1,114 per tonne in the domestic market during 2006-07, which was also the cheapest price among Indian producers and this year, NMDC has decided to hike it to INR 1,220 per tonne, which is still likely to be the lowest price.

Indias private sector steel companies are bought approximately 20 million tonne of iron ore from NMDC in 2006-07, out of its total production of 23 million tonne and export to Japanese and Korean buyers accounted for remaining 3 million tonne. NMDC hopes to raise production to 26 million tonne in 2007-08.

POSCOs EIA hearing faces objections

It is reported that the public hearing conducted by the Orissa state pollution control board at Kujang on the proposed POSCO Indias steel plant project, conducted amid tight security, witnessed objections from villagers. As per reports, representatives of several organizations like Bharat Gyan Bikash Samiti, Swarp Bikash Surakhya Manch and other NGOs including social activists rushed to the pandal to raise environmental issues opposing POSCOs project, but they were prevented.

Mr Anadi Rout Village chief of Nuagaon village strongly protested the public hearing to be conducted 20 kilometer away from the project site by violating norms and conditions of pollution act. He said thousands of people will be affected by the project and the flourishing betel vine economy of the area will be destroyed.

As the venue of the public hearing being far away from the project site, only around 500 people that too mostly from the villages outside the area earmarked for POSCOs steel plant participated in the hearing that was conducted at Kujang amid tight security and only a small group of people came from three gram panchayats that are to be directly affected by the steel plant and captive port project of POSCO-India. The three panchayats have a population of over 20,000 people.

"We did not attend the public hearing as it was held several km away from our village," said Ratnakar Rout, a farmer from Nuagaon village. "In any case, we don't want the steel plant at the cost of our sources of livelihood."

Russia & India ink JV for Titanium production

Kommersant reported that Russia and India on weekend signed an agreement to invest USD 126 million a part of Indias debt to the Soviet Union in a 55:45 JV for titanium dioxide production.

Under the agreement, the parties are going to build a plant with the annual capacity of 40,000 tons of titanium dioxide within the next three years.

Mr Sergey Storchak deputy finance minister of Russia in an interview with Kommersant told that the final agreement on the titanium production still has to be signed.

Russian financial authorities plan to convert the remaining sum of Indias debt and liabilities of other countries into similar projects.

RINL & NTPC to form JV for BF gas based power plant

It is reported that Rashtriya Ispat Nigam Ltd will form a 50:50 JV with National Thermal Power Corporation to set up a 150 MW gas based power plant and a MoU will be signed soon. The power unit is expected to be fuelled by lean gases, which would be generated from the blast furnace and the project would take off by 2009.

Mr Y Sivasagar Rao CMD of RINL told newspersons that the total investment for the project would be about INR 700 crore.

He added that RINL is also foraying into renewable energy sources which would account for 5% of energy needs of RINL.

SECL inks agreement for high wall technology

BL reported that Coal India Limiteds subsidiary South Eastern Coalfields Ltd has entered into an agreement with a US company for high wall manless underground mining technology.

The INR 200 crore new technologies is being brought on hiring basis and the agreement has a production guarantee enabling suppliers to get back the cost of equipment and cost of services from sales.

Mr BK Sinha CMD of SECL told BL that the technology has capability to produce a minimum of 7 million tonnes per annum from a single mine.

Mr Sinha said SECL has firmed up an INR 3,000 crore investment plan for the 11th Plan for raising its total annual coal production from 88.5 million tonnes to at least 111 million tonnes. He added that out of the targeted production, about 24 million tonnes would come from underground mines as against the existing production of about 18 million tonnes and the rest from opencast mines. He also pointed out that the company plans to start 24 new coal projects during the 11th Plan with an objective of creating about 52 million tonnes of fresh capacity per annum.

Chinese iron ore imports in 2007 could cross 400 million tonnes

According to China customs statistics, China imported a total of 35.62 million tonne of iron ore in March 2007, bringing accumulative import to 100.19 million tonne for the first three months up by 23.4% YoY. Chinese companies paid CNY 7.1 billion (USD 919 million) for the imports up by 39.7% YoY.

China Iron & Steel Association has predicted the annual import figure at 355 million tonne for 2007 up by 10% YoY. But if this trend continues, Chinas annual import volume of iron ore may go beyond 400 million tonne in 2007.

Mr Chen Xianwen director of the market research department of CISA said "Enterprises were trying to buy iron ore before the 9.5% price hike on the international market on April 1st 2007. Mr Chen said high steel production in the first two month was another factor boosting domestic demand.

China imported 325 million tonnes of iron ore in 2006 to produce about 420 million tonnes of steel. Companhia do Vale do Rio Doce became China's biggest supplier of iron ore in 2006, having sold 77.8 million tonnes on the Chinese market.

(Sourced from MySteel.net)

European steel producers win case against US steel duties

Platts reported that US Department of Commerce has accepted a ruling by the World Trade Organization that required a change in the calculation of anti dumping duties on 8 European steel exporters.

The duties were recalculated without using a methodology called zeroing and allowed companies to offset goods sold at lower export prices with like products sold at higher prices in the US. In most cases, the recalculation resulted in the elimination of all duties and a reduction in other cases.

The duties were eliminated on hot rolled coil from the Corus Group in the Netherlands and stainless steel bar from Ugitech in France and Corus Engineering Steels in the UK. Duties were also eliminated or reduced on 6 other stainless steel bar and wire rod producers in the UK, Italy, Germany, and Sweden, previously ranging from 4.76% to 32.32%. Duties on imports of cut to length carbon steel plate from Palini and Bertoli in Italy were reduced from 7.85% to 7.64%.

The US petitioners included Nucor, Mittal Steel US, Ipsco, Steel Dynamics, and Carpenter Technology.

ISU formally merges with USW

56 year old Independent Steelworkers Union, one of US's last independent steel unions, has formally merged with the United Steel Workers last weekend.

Members of the Independent Steelworkers Union, which represents about 1,150 workers at Mittal Steel's mill at Weirton in West Virginia voted overwhelmingly last month to join the Pittsburgh based USW. They are now known as USW Local No. 2911, a number drawn from the Bible. Jeremiah 29, verse 11 offers a message of optimism "For I know the plans I have for you, plans to prosper you and not to harm you, plans to give you hope and a future."

Mr Mark Glyptis ISU president said that "We thought long and hard about the USW for a number of years and we certainly believe that being a USW member is going to be in the best interest of our employees and our retirees and it's going to make the union movement stronger across this country."

USW is the largest industrial union in North America, with 850,000 members in the United States and Canada. The union employs lobbyists in Washington, pension and benefits analysts, corporate researchers and collective bargaining teams.

SSINA study highlights Chinas support to SS industry

According to a new study issued by the Specialty Steel Industry of North America, the government of China has a policy of conferring preferred status on the stainless steel industry and providing it with a wide range of preferential treatment programs and direct subsidies. The study was released in conjunction with the annual American Metal Market Conference in Pittsburgh.

The study titled Chinese Government Subsidies to the Stainless Steel Industry describes Chinas Steel and Iron Industry Development Policy, which mandates direct government subsidization of the Chinese steel and stainless steel industries. Quoting directly from the policy, the study details Chinese government support in the form of Tax refunds, discounted interest rates, funds for research and other policy support for major iron and steel projects utilizing newly developed domestic equipment.

As per the study, the policy also calls for indirect support by, among other things, restricting foreign investment, discriminating against foreign equipment and technology and by providing various export credits.

Mr David A Hartquist counsel of SSINA in a speech entitled The US Specialty Steel Industry: Today and Tomorrow said that even though global stainless steel capacity exceeds demand, new facilities are being added around the world. He noted that this new capacity is being funded through massive government subsidization, particularly in China.

According to the SSINA study, Chinas Steel Policy is a primary example of the governments attempt to manipulate the steel market and dictate industry outcomes by involving itself in decisions that should be made by the market.

NLMK releases trading update for Q1 2007

Novolipetsk Steel has released the following regular trading update for Q1 2007.

The tables below show the production of principal steel products at NLMK's main production site in million tonnes.

Novolipetsk

NLMK's Danish subsidiary DanSteel A/S

VIZ-Stal

Stoilensky GOK

Altai-koks

MMK in its release said that
1. The increase in HRC and CRC production volumes during Q1 2007 as compared to Q4 2006 was due to the completion of scheduled maintenance activities performed at our rolling facilities in October and November 2006.
2. In addition, scheduled maintenance in Q1 2007 at our hot dip galvanizing lines caused a decrease in coated steel output, as compared to Q4 2006.
3. In Q1 2007, Stoilensky GOK maintained production volumes at the level of the previous quarter. Iron ore concentrate and sinter ore production volumes grew in Q1 2007 against Q1 2006 by 6.3% and 50.4% respectively, due to commissioning of the first stage of section four of the Stoilensky GOK beneficiating plant, coupled with good mining conditions of the deposit.
4. The apparent slight decrease in coke production at Altai-koks during Q1 2007 compared to Q4 2006 is due to the fewer number of calendar days in Q1 2007 against Q4 2006. At the same time, coke production grew by 48.3% compared to Q1 2006, as new coke battery #5 was put into operation at the end of 2006.

Baosteel Group to acquire Baotou Steel Group Report

Interfax reported that China's Baosteel Group is planning to purchase stake in Inner Mongolia's Baotou Iron and Steel Group to become the controlling shareholder in Baotou Steel Union Co Ltd. The report adds that Baosteel and the Inner Mongolian State owned Assets Supervision and Administration Commission are negotiating as to whether Baosteel will be approved to acquire a controlling share in the state owned Baotou Steel.

The report cites a senior official with Shanghai Baosteel Group as saying that "We are now in merger talks with Baotou Steel and hope to acquire a controlling stake in the company this will enable us to join with Baotou Steel in achieving fully listed status."

The official explained that Baosteel's share acquisition will grant the company access to Baotou Steel's large iron ore resources in Inner Mongolia and together with its acquisition of Xinjiang Bayi Iron and Steel Group, and will expand its market share in China's Northwestern region. Baotou Steel's area of expertise is in rail steel, seamless pipe and hot dipped galvanized steel. The official commented that the merger with Baotou Steel is in accordance with Baosteel's future development plans and would follow a similar format to the Bayi Steel takeover.

Shanghai Baosteel Engineering Technology Co Ltd a Baosteel subsidiary, currently holds 17.6 million shares in Baotou Steel Union Co. Ltd, accounting for 0.52% of total company shares, making it the third largest shareholder. Baotou Steel Group holds a 46.70% stake in the listed company.

The official said Baosteel will officially complete its takeover of Xinjiang Bayi Steel Group by the end of April 2007 and recently approved by the State owned Assets Supervision and Administration Commission for the free acquisition of an additional 15% of state owned Bayi Steel, increasing Baosteel Group share in the company to 84.61%.

Xstrata sells aluminum assets to Apollo Management

Xstrata plc has announced the disposal of Xstrata Aluminum, comprising all of Xstratas aluminium interests, to Apollo Management LP for a total cash consideration of USD 1.15 billion. The transaction is subject to regulatory approval under the Hart-Scott-Rodino Act and is expected to complete in the second quarter of 2007.

Xstrata Aluminum was created from the former Falconbridge Groups aluminium assets, known as Noranda Aluminum, following Xstratas acquisition of Falconbridge Limited in 2006. Noranda Aluminum comprises a 100% owned primary smelter in New Madrid, Tennessee and three modern rolling mills at Tennessee in North Carolina and Arkansas, together with a 50% interest in the Gramercy aluminum refinery in Louisiana and St Ann bauxite mine in Jamaica, both of which are owned through a JV with Century Aluminum Inc.

Apollo Management is a leading private equity and capital markets investor with investments in a diverse range of sectors in the US and internationally. Apollo invests in industry-leading, franchise assets led by world-class management teams.

Mick Davis CEO of Xstrata said The sale of Xstratas aluminium assets represents the successful conclusion of the in depth review of the business we commenced shortly after Xstrata took control of Falconbridge in August 2006. Noranda Aluminum is a highly cash generative and robust business with an excellent suite of assets. However, our review concluded that these assets do not provide Xstrata with the necessary scale or upstream exposure to represent a suitable entry point from which to build a world-class aluminium business. As a result, these assets fit more naturally with alternative owners who are incentivised to optimize the business as a standalone unit, than as part of Xstratas portfolio.

Yingkou orders for a 2 stand heavy plate mill

Chinas Minmetals Yingkou Medium Plate Co Ltd announced that it placed an order with SMS Demag for the construction of a heavy plate mill at Yingkou in the Liaoning Province in northeastern China. Commissioning of the plant is scheduled for autumn 2009.

The annual capacity of the new plant will initially be approx. 2 million tonnes and can be later expanded to 2.3 million tonnes. The focus of production would be for pipe grades, shipbuilding plates, high strength structural plates as well as plates for the construction of pressure vessels and boilers.

SMS Demag will supply the mechanical equipment, electrical and automation systems for the entire process line with roughing and finishing stands, plate cooling system, hotplate leveler, cooling and inspection beds, shear line and finishing line, including the cold plate leveler.

Both mill stands have a rolling force of 120 MN each and therefore rank among the most powerful in the world. They are designed for the rolling of plates up to a thickness of 420mm. The plate cooling system is designed as a laminar cooling system. Provision has already been made for expanding the system to include the pre leveler and spray cooling. In order to ensure a smooth cutting edge also for extremely high strength plates, the cropping and dividing shears have a closed type design. The cold plate leveler can be operated in the nine or five roll mode with an extended leveling range.

Minmetals Yingkou Medium Plate Co Ltd is part of China Minmetals Corp one of the most important trading companies for steel and nonferrous metals in China.

Harsco acquire Performix Technology

Industrial services provider Harsco Corp announced that it has acquired privately held Ohio based Performix Technology Ltd without disclosing terms of the purchase.

Performix Technologies is one of the USs leading producers of specialty additives used by steelmakers in the ladle refining of molten steel. Performix produces a range of proprietary materials that are added during ladle refining to improve steel quality and increase steelmaking efficiency.

Performix operates from two plants in the US and serves most of the major steelmakers in the upper Midwest and Canada and has more than 30 years of experience at the forefront of ladle metallurgy and maintains extensive laboratory facilities to assist customers in determining the optimum Performix product for each ladle recorded 2006 sales of approximately USD 29 million and employs approximately 60 people.

Harsco produces a range of proprietary materials that are added during ladle refining to improve steel quality and increase steelmaking efficiency. Ladle refining allows steelmakers to process their molten steel to exact chemical specifications outside the steelmaking furnace, thereby freeing up the furnaces for greater production capacity while decreasing energy and other costs per ton of steel produced.

Edgen Murray to acquire PetroSteel

US based Edgen Murray announced that it has signed a purchase agreement to acquire substantially all of the assets and certain liabilities of PetroSteel International through a wholly owned subsidiary. The acquisition is expected to occur on or around April 30th 2007.

PetroSteel is a US based distributor of specialty offshore grade steel plates and profiles headquartered at Bala Cynwyd in Pennsylvania. PetroSteel's revenues for the year ended December 2006 were approximately USD 92 million.

Mr Dan O'Leary CEO of Edgen Murray said that "We believe the acquisition of PetroSteel will broaden our offshore product base allowing us to provide a comprehensive supply solution to our customers in the oil and gas industry."

Edgen Murray currently serves customers in more than 50 countries and is a global distributor of high performance carbon and alloy steel products used primarily in specialized applications in the energy market, including the oil and gas processing and power generation industries.

NSW approves Newcastle coal export facilities expansion

New South Wales government has approved expansion for coal export facilities for a third coal loader in the Port of Newcastle as well the expansion of the Kooragang coal terminal. The two approvals allow capacity at Newcastle, the world's largest coal exporting port, to more than double, to 209 million tonnes a year. Newcastle Coal Infrastructure Group, the consortium building the new terminal, said it would deepen the Hunter River to make way for ships and expected the first ship to be loaded in 2009.

Mr Frank Sartor minister for planning gave the go ahead for a new coal export terminal for Newcastle costing AUD 922 million and for the Kooragang Island terminal to be upgraded at a cost of AUD 78 million. Mr Sartor said "Demand for coal continues to grow, largely driven by developing Asian markets.

Environment groups have accused the state government of hypocrisy, saying the expanded coal port will lead to the doubling of greenhouse emissions. Mr Steve Phillips from the environmental group Rising Tide said "We're dismayed that a Government that is obviously seeking to portray itself as leaders on climate change has just gone and approved the doubling of the world's biggest coal port. Just one of these two new projects that the New South Wales Government has just approved, the new coal export terminal in Newcastle Harbour, will be the equivalent of doubling New South Wales greenhouse emissions from all sources."

Palladon extends due diligence date for Shagang Steel

Palladon Ventures Ltd announced that Shagang Steel is nearing completion of their formal due diligence in the proposed purchase of Palladon's JV partner's 50% interest in the Iron Mountain project.

Shagang Steel signed a letter of intent to acquire Luxor Capital Group's 50% interest in the iron concentrates business channel of Palladon's subsidiary Palladon Iron Corp. Shagang has been granted an extension on the period of exclusivity until May 10th 2007, in order to provide Shagang with additional time to complete due diligence reports and to prepare closing contracts.

Mr Donald G Foot Junior president & CEO of Palladon Ventures Ltd said that "Shagang's growth plans for the future require a stable source of iron ore, and the Iron Mountain project is an excellent opportunity for Shagang to secure a constant source of pellet mill feed in coming years."

Palladon Ventures Ltd is a junior resource company focused on building production facilities at the Comstock Mountain Lion iron mine at Iron County in Utah. It also holds gold exploration projects in Nevada, Utah and Argentina.

Cotton & Western and Quantum ink Philippines iron ore JV

Cotton & Western Mining Inc announced that it has executed a formal iron mineral mining 50:50 JV agreement with Quantum International of Houston. Cotton & Western Mining Inc will form a new JV company that will operate under the name of Cotton & Quantum Mineral Ventures Inc. The effective date of the agreement is April 12th 2007 and expires on April 11th 2017 with options for renewals in 10 year intervals.

Under the JV agreement, Quantum will provide 100% of the required project funding needs and Cotton & Western Mining will provide iron minerals from its selected iron mineral deposits located in the Republic of the Philippines. Under the terms and conditions of the JV agreement, Cotton & Western Mining shall be responsible for all mining operations, while Quantum shall be responsible for all funding and finished product contract sales.

Quantum's initial investment into the JV will be USD 3.5 million to open one of Cotton & Western Mining's selected iron mineral deposits and produce up to 100,000 DMT of raw iron ore fines per month for the exclusive market sales of Quantum. Off take sales and delivery contracts are near completion for the new JV that is valued at USD 76 per DMT CIF China Main Ports. The JV Company shall have 6 months from the effective date of agreement to produce the first 100,000 DMT shipments. There after the JV shall expand quickly to 200,000 DMT per month to meet Quantum's expectations of minimum production.

Affiliate companies named in the JV agreement as being intricate to the parties involved include Astrolabe Mining & Development Corporation of Manila for Cotton & Western Mining and Quantum Grupo Comercial Quantum Internacional SA de CV of Mexico for Quantum International.

Quantum International supplies iron Ore and copper raw materials to the respective industrial sectors.

Cotton & Western Mining Inc is a US corporation structured to produce and sell iron ore on a global scale and is currently engaged in several mining activities.

Jiangsu Xihu to commission new SS wire rod line in mid 2007

Stainless steel longs producer Jiangsu Xihu Special Steel is expected to commission a 200,000 tonnes per year drawing quality wire rod line in July or August 2007. Its output will mainly be 5.5mm to 10mm diameter rod in 200, 300 and 400 series stainless.

Jiangsu province based Jiangsu Xihu currently produces 20,000 tonnes per year of rod and bar. Jiangsu Xihu operates a small EAF melt shop, but it also purchases billet. The company intends to expand its melting capacity to match the new rolling throughput, but officials say there is no formal plan at this stage.

Jiangsu Xihu mostly sells in the domestic market but started exporting last year and expects to increase its overseas sales when the new line is commissioned. Currently its main markets are Europe and North America.

Mechel in race for Croatian Zeljezara Split Report

A source in the Russian company Mechel told Interfax that Russia's Mechel Group has applied to buy the Croatian metallurgical plant Zeljezara Split.

The source said that "The Croatian Company specializes in producing fittings which is a core business for Mechel. In Romania we are in first place and in Russia second. The acquisition of a new asset will allow the group to strengthen its position in this segment."

He added that at present 89.3% of the loss making plant is owned by the Croatian government. This stake has already been offered for sale and even found a buyer a consortium of Ukraine's Smart Group and Croatia's Armco but the deal fell through.

The stake is being sold at a symbolic price of HRK 1 but the buyer should also have taken on the company's debts of about USD 80 million, present a five year business plan and also guarantee not to cut jobs.

According to the media report the contenders for Zeljezara Split include Poland's Zlomrex, Commercial Metals Company, Stemcor, Germany's Max Aicher and Italy's Beltrame.

Nisshin Steel starts zinc surcharge price mechanism

Nisshin Steel announced that it has introduced zinc surcharge price system for construction, automobile and appliances application for contract users and export for February order of April shipment.

As per report the galvanizing steel items include galvanizing steel, galvalume, Zn-Al-Mg plated steel and colored galvanized steel for distributors.

It is the first surcharge mechanism covering all galvanized steel items for Japanese steel makers, though Yodogawa Steel Works and JFE Galvanizing & Coating started special zinc extra charge for galvanizing steel for January shipment.

Wesfarmers concludes coking coal price negotiations

Wesfarmers Limited announced that it has concluded annual price negotiations with all major customers for metallurgical coal exports from its Curragh mine in Queenslands Bowen Basin in line with publicly reported settlements by other exporters of similar quality products. It reported weighted average price decline for Curragh metallurgical coal of approximately 13.6%.

Mr Stewart Butel Wesfarmers Coal MD said the company was satisfied with the result of the major customer negotiations, with Curraghs hard coking coal prices maintaining market price relativity. He said that Curragh metallurgical sales volumes for the 2006-07 are expected to be in the previously stated range of 6.2 to 6.5 million tonnes, with first half sales consistent with the upper end of this range.

He added that demand from customers in the second half remains strong. He said Sales will continue to be constrained due to rail infrastructure upgrades that are expected to be completed in July 2007.

Wesfarmers also said that its coking coal prices would decline in 2008 while PCI prices would increase and added that the sales mix is expected to remain unchanged from previous indications.

Voestalpine to finance Boehler-Uddeholm takeover without rights issue

Austrian steel group voestalpine announced that it will finance the takeover of Boehler Uddeholm without a rights issue.

In a statement voestalpine said that Due to promising mid term business prospects and voest's ability to leverage, the board is confident it can carry out the takeover on the basis of a higher debt level.