Indian government not to curb iron ore export

Amid repeated demands by Indian steel industry to curb iron ore exports, the government said that India has adequate iron ore reserves, estimated at 25.25 billion tonnes, and there is no move to curb its export.

Dr T Subbarami Reddy minister of state for mines informed Lok Sabha that “As per available information, India has sufficient resources of iron ore, estimated at 25.25 billion tonnes, which continues to increase. Reserves, which are a function of detailed exploration, are estimated at 7.21 billion tonnes.

Dr Reddy also informed that export and import of iron ore figures for the last three years as under

In million tonnes
P is provisional
* indicates April to December 2006

Dr Reddy added that “Export of minerals in India continues to be guided by the EXIM Policy notified by Government. This policy regulates and promotes judicious use of iron ore for domestic purpose and export of surplus quantity. A high level committee under the Chairmanship of Shri Anwarul Hoda, Member Planning Commission, took up export of iron ore as one of the issues, not specifically included in its Terms of Reference, whose resolution was considered crucial for stimulating investment and technology flows into the mining sector. The Government had also considered the issue of restricting iron ore exports in view of domestic demand, taking into account the employment and investment concerns of the mining industry."

SAIL RSP waste heat based power plant registered under CDM

It is reported that Steel Authority of India Limited’s Rourkela Steel Plant has achieved the rare distinction of being the first steel plant of the country to get a Clean Development Mechanism project registered by the International body United Nations Framework Convention on Climatic Change.

The Clean Development Mechanism project taken up by Rourkela Steel Plant based on waste heat recovery based captive power project in integrated Iron & steel plant was registered at United Nations Framework Convention on Climatic Change on July 6th 2007.

This project aims at enhancing the gas recovery from the Basic Oxygen Furnaces of SMS-II and its reuse on captive power generation. Apart from eliminating the BOF gas flaring, implementation of the project has also helped in substantial reduction in use of fossil fuels like boiler coal and furnace oil at CPP-I. It will also help Rourkela Steel Plant earn to the tune of INR 12 crores to INR 15 crores over the next 10 years.

The Clean Development Mechanism project is a part of the Kyoto Protocol that aims at reducing the emission of greenhouse gases all over the world.

TATA Steel Tuticorin titanium project on track

It is reported that TATA Steel said that its INR 2,500 crore integrated titanium dioxide project in Tuticorin district of Tamil Nadu is on track and only a reasonable price would have to be paid to acquire land.

Mr B Muthuraman MD of TATA Steel told reporters that the project is definitely moving ahead and the company is keen on setting up the project with popular support. He said “This project is definitely on and the present Government will tackle the illegal mining and unruly elements. While three quarters of the people supported the project, the company is ready to clear any misgivings in the minds of the others. We are ready in all respects except for the land. The moment the land is ready we can start the project.”

Mr Muthuraman however hinted that TATA Steel also has alternative plans of relocating the project. He said “TATA Steel is a INR 1,00,000 crore company after the acquisition of Corus and this is a INR 2,500 crore project. So please understand that such a company will have alternative plans. It is for the people of Tamil Nadu to decide whether they want the project here or not.”

Mr Muthuraman informed that TATA Steel is willing to pay a reasonable price for the land, with the state government reportedly fixing a price in the range of INR 40,000 to INR 50,000 per acre, far higher than prevailing market prices. He said that TATA Steel has earmarked INR 50 crore for the land out of the total project cost but unreasonable land prices would result in the project becoming unviable.

TATA Steel signed a MoU with the Tamil Nadu Government on June 28 to set up an integrated titanium dioxide manufacturing facility in Tirunelveli district, extending to Tuticorin district. The project envisages mining and mineral separation, besides value addition to synthetic rutile and titanium dioxide or pigment, a key ingredient for the paints industry.

Karnataka HC quashes mining rights to STC in Bellary

BL reported that Karnataka High Court has quashed a notification granting a 30 year lease to the State Trading Corporation to mine iron ore at Kumaraswamy reserve forest in Sandur taluk of Bellary district.

Justice Mr DV Shylendra Kumar, allowing petitions by HG Rangagowda and Salgoankar Mining of Goa, said that the notification deserved to be quashed as it was a colorable exercise of power.

HG Rangagowda and Salgoankar Mining said that they had applied for mining lease at Sandur. But the authorities had turned down their applications and decided to grant lease to State Trading Corporation for mining 524.80 hectares of land in Kumaraswamy forests.

JSL to set up 0.4 million tonne SS plant in Leningrad – Report

Russian news agency Itar Tass reported that Jindal Stainless Limited is at a preliminary stage of USD 60 million investment for construction of a steel mill having an annual capacity of 0.4 million tonnes of stainless steel in Russia's north western Leningrad region.

AS per report, Leningrad's economic development commission has offered potential sites for the proposed plant and also wants construction of the plant to begin in 2008-09.

The report added that Mr Mahendra Agrawal representative of JSL in Russia has expressed JSL’s interest during a meeting with Mr Grigory Davs deputy governor of Leningrad. Mr Davs welcomed the idea saying that how Jindal's project fits well into the investment policy in the region where Ford, Toyota and other auto majors have or are building car plants.

In India, Jindal Stainless plans to set up a 1.6 million tonnes integrated stainless steel plant in Orissa in phases and is also firming its capacity of its Hisar plant to 0.9 million tonnes from 0.6 million tonnes.

BHPB reported to be eying Indian mining deal

Australian media reported that mining giant BHP Billiton is in talks to take up a 25% stake in a USD 615million bauxite mine and alumina refinery in the state of Orissa in India. The deal would be BHP's first project in India. BHP declined to comment on the report.

The report added that Indian bauxite miner Ashapura Minechem recently said that it is in talks with BHPB, Aluminum Corporation of China and Russia's Marcos Group on a deal for all four to be equal partners in the plant designed to produce one million tonnes of alumina a year.

The report also cited Mr Chetan Shah MD of Ashapura Minechem as saying that "We hope to get a bauxite mining lease by September, after which a MoU will be signed with the Orissa state administration for setting up the plant.”

Global mining majors including BHPB and Rio Tinto have been hunting for opportunities to develop projects in Orissa, which is rich in iron ore and bauxite.

IIL plans INR 10,000 crore CAPEX in 5 years

PTI reported that Ispat Industries Limited is planning to invest about INR 10,000 crore within 5 years to ramp up domestic production and is also planning to expand overseas through capacity expansion and backward integration.

The report cited Mr Anil Surekha executive director finance of Ispat Industries Limited as saying that "Ispat Industries and its parent company Global Steel Holdings are working on plans to expand operations both in India and overseas. We would be ramping up production at the Dolvi plant from 3 million tonnes to 3.6 million tonnes per annum and we would be requiring INR 3,000 crore for ramping up by 2011-12.”

He added that Ispat’s domestic expansion plans include building a 1 million tonne per annum coke oven plant and a 4.5 million tonne per annum coke pellet plant likely in Visakhapatnam.

Mr Surekha said that Ispat's proposed 2.8 million tonne plant in Jharkhand would require an investment of about INR 5,750 crore but fructification of the project would depend on availability of iron ore through captive mines, which was indicated to the company by the state government in a MoU.

He added that "Ispat's parent company Global Steel Holdings is exploring the possibility of projects overseas for capacity expansion and backward integration to ensure a perennial source of raw materials and strike business synergy in various parts of the world."

Indian requirement of coal & gas for thermal power plants

Mr Sushilkumar Shinde power minister in a written reply to a question in the Rajya Sabha said that during the terminal year of the 11th Plan 2011-12, the estimated quantity of coal and gas required for the thermal power stations now proposed to be set up during the 11th Plan would be as under:
1. Coal Requirement 262 million tonne
2. Average Gas Requirement 20 million standard cubic meters per day

Coal requirement of the thermal power stations proposed to be set up during the 11th Plan would be met from Coal India Limited, Singreni Coalfields Limited and captive mines of various thermal power plants. And shortfall if any would be met through imported coal.

The requirement of gas for gas based power plants proposed to be set up during the 11th Plan is envisaged to be met through indigenous sources such as ONGC, IOC, PMT JV and import of LNG.

Jharkhand government to revive HEC

Mr Sudhir Mahto deputy CM cum industries minister of Jharkhand while addressing the anniversary function of Shaheed Vishwanath Shahdeo at Ranchi said that the state government would provide a financial assistance of INR 250 crore to Heavy Engineering Corporation and waive off its outstanding dues as well. He said that a decision in this regard has been taken and he has signed the file related to it.

Mr Mahto said that it is everybody's responsibility to keep alive Jharkhand's mother industry. He said that Heavy Engineering Corporation has been asked to prepare a report to seek work order from the Railways. He said “I had dialogues with the Railways permanent work orders to Heavy Engineering Corporation.”

AP political leaders visit Brahmani land and give clean chit

It is reported that a 9 member team comprising of representatives of all political parties in Andhra Pradesh except Telugu Desam inspected the land allotted to Brahmani Steels in Jammalamadugu area and announced that no irregularities were found in the transaction.

Some members made an aerial survey of Brahmani Steels land. The members said “The land is barren and there is no evidence of any plant growth or animals in the area.”

Expressing their satisfaction over the land deal, some members said mining of iron ore in Obulapuram Mining Company is going on at a brisk pace and the steel plant should also be constructed at the same pace.

Mr G Mohan Reddy said 14,000 acres of land was given to Brahmani steels strictly in accordance with the rules and appreciated Chief Minister YS Rajasekhara Reddy for giving permission to the plant. He said that it would give a boost to the economy of Rayalaseema region.

The team comprised of MLAs Mr E Prathap Reddy of Congress, Mr C Vijayarama Rao of TRS, Mr Nomula Narasimhaiah of CPM, Mr C Venkata Reddy of CPI, Mr S Ramulu of Janata Party, MLCs Mr G Rami Reddy, Mr G Mohan Reddy, Mr Sitaramulu and Mr R Padma Raju. The team was accompanied by Obulapuram Mining Company and Brahmani Steels chairman Mr G Janardhan Reddy, Mines and Geology Director Mr VD Rajagopal and other officials.

Vizag Port cargo handling this year up by 20.6% YoY

It is reported that the Visakhapatnam port has handled 22.8 million tonnes cargo till now in the current financial year up by 20.6% YoY as compared with 18.9 million tonnes during the corresponding period 2006-07.

Mr K Ratna Kishore chairman of Visakhaptnam Port Trust on the occasion of the Independence Day said there is a big challenge ahead as the target for the financial year had been fixed at 64.24 million tonnes by the union shipping ministry.

Mr Kishore said that “The phase one deepening of the inner harbor entrance channel and turning circle is nearing completion. Presently, we are handling vessels with 10.7 meters draft and from November 1st 2007 we will be able to handle 11 meters draft vessels. The second phase work will begin immediately.”

He said the proposal of the port to construct two new berths on BOT basis WQ 6 and WQ 10 in the inner harbor had been cleared. The port had taken up projects worth INR 3,000 crore to enhance the capacity keeping in view of the future needs.

Vizag Port handled 56.39 million tonnes in 2006-07 and maintained its first position in the country for the seventh consecutive year.

TDP to continue opposing Obulapuram mine lease

It is reported that Andhra Pradesh’s Telugu Desam Party has rubbished the clean chit given by a multi party team to Obulapuram Mining Company’s iron ore mine and made it clear that the party would continue an uncompromising struggle on the issue till the lease is cancelled and global tenders called.

Mr N. Chandrababu Naidu president of TDP at a press conference said That “All party legislators visit to Obulapuram has been reduced to a farce with no top ranking official on hand to clarify the doubts raised by them. They were taken like a tourist party and despite repeated requests no official document was given to the legislators.”

He said “The Government wants to browbeat the Opposition into silence. We will not budge and will fight it out. The iron ore mine is a public property and we will protect and see that the Government gets the maximum revenue out of it.”

He said that his party has collected all the evidence and is convinced that OMC resorted to looting of iron ore and was shown undue favor by Mr YS Rajasekhara Reddy chief minister of AP. He said “Let the people decide who is right and who is wrong.”

100% FDI permitted in hydro power projects in India

Mr Sushilkumar Shinde the Power Minister in a written reply to a question in the Rajya recently that 100% Foreign Direct Investment has already been permitted on the automatic approval route in respect of projects relating to electricity generation, transmission and distribution including hydro based electricity projects in Sikkim and other parts of the country.

Mr Shinde said that “In addition, fiscal incentives are also available under the mega power policy subject to compliance of certain conditions. Under the mega policy a lower qualifying capacity has been provided for the states of Jammu & Kashmir, Sikkim and the North Eastern States at a minimum 350 MW for hydel power projects and 700 MW for thermal power projects as compared to a minimum of 500 MW for hydel power projects and 1000 MW for thermal power projects in the other parts of the country.”

Malana Power bags two hydro power projects in Himachal

BS reported that Bhilwara Energy’s subsidiary Malana Power Company Limited has bagged two hydropower projects of 340 MW in Himachal Pradesh, which would require an investment of INR 2,200 crore.

These projects have been awarded on build operate own and transfer basis for a period of 40 years. The company will provide free power from the projects to the Himachal government. The 200 MW Bara Banaghal project on the Ravi basin and 140 MW Chango on the river Spiti were bagged on the basis of competitive bidding in which Malana Power Company Ltd had to pay an upfront fee of INR 66 million per MW and INR 45 million per MW.

The total capacity under bidding was 628 MW of which 340 MW has been awarded to Malana Power Company Ltd. There were 14 companies in the fray for these projects, including Reliance Energy, Jaiprakash Hydro, GMR, Moser Baer, Gammon Torrent Consortium and Larsen & Toubro.

Mr Ravi Jhunjhunwala chairman of LNJ Bhilwara Group said “We have set a vision of achieving 1,500 MW capacity by 2012 and development of these projects is a step towards realizing this vision. He added that that Malana Power Company Ltd has already started work on the detailed project report for the two projects and it is expecting to submit the DPR for approval to the Himachal Pradesh government by mid 2008. The projects are likely to be commissioned by the end of 2012.

Now, the total power generation capacity of Malana Power Company Ltd in Himachal Pradesh would go up to 618 Mw and the combined hydro power generation capacity of Bhilwara Energy Ltd across India would cross the 1,000 MW mark.

India gets 15 applications for cement import from Pakistan

It is reported that the Indian government has received 15 applications so far from Pakistan seeking license from Bureau of Indian Standards to export cement to India. The BIS Certification Marks License is mandatory for any cement to be imported into India.

Mr Jairam Ramesh minister of state for commerce said in a written reply in the Lok Sabha that "These applications are at different stages of processing in the Bureau of Indian Standards. The cement to be imported from Pakistan cannot be quantified at this stage and will be open to market forces."

Pakistan's cement manufacturers have evinced interest to export cement to India. India has agreed to expedite the process of importing cement and put on fast track completion of certification formalities. India is facing a shortage of 10 million tonnes of the raw material and Pakistan can bridge this gap given its surplus stocks.

In 2006-07, production of cement by large plants stood at 155.66 million tonnes registering a growth of 9.77% over the previous year. Capacity utilization in the cement industry was 94% during 2006-07, while it was 98% during the first quarter of 2007. As per the Cement Manufacturers' Association the average price of cement has increased from INR 158 per bag in December 2005 to INR 229 per bag in July 2007.

China produces 41.25 million tonnes of crude steel in July 2007

China's iron & steel production kept steady growth in July 2007. It produced 41.25 million tonnes of crude steel up by 14.5% YoY and its daily outputs averaged some 1.331 million tonnes, the lowest level since March 2007. Production of Pig iron witnessed comparatively slow growth in July 2007 as China produced 39.67 million tonnes of pig iron up by 13.2% YoY. Steel product outputs continued to go up quickly. In July 2007, steel product outputs surged to hit some 47.73 million tonnes of steel products up by 23.9% YoY.

Chinese steel makers' crude steel outputs amounted to some 279 million tonnes during January to July 2007 up by 18.5% YoY. Pig iron outputs added up to some 267 million tonnes from January to July up by16.5% YoY. Steel product outputs during January to July 2007 reached some 319 million tones up by 24.3% YoY.

In July 2007, Chinese steel makers made 8.52 million tonnes of rebar, 7.03 million tonnes of wire rod, down by 14,000 tonnes, 4.43 million tons of medium plate, 810,000 tonnes of HR sheet, 1.14 million tonnes of HR thin and wide strip; 5.33 million tonnes of medium and wide steel strip, hitting record high 1.26 million tonnes of CR sheet, 1.47 million tons of HR thin and wide steel strip, 3.17 million tonnes of narrow HR strip, 1.66 million tonnes of seamless steel pipe, 2.02 million tonnes of welded steel pipe. Outputs of railway steel products fell down conspicuously. Section steel outputs inched up. Both construction steel product and CR strip steel outputs remained basically steady. HR strip steel outputs continued to rise with slower pace. Narrow HR strip steel outputs dropped at the same time.

China major metallurgical product output in January to July 2007

In million tonnes

(Sourced from MySteel.net)

Latest global steel prices forecast from MEPS

MEPS reported that globally all steel products price in July declined faster than it had anticipated mainly as a result of decreases in the EU and North American flat products categories. It said “We forecast reasonably stable pricing over the period into early 2008. Predicted increases in the North American market are likely to be offset by reductions in the EU. A significant pick up is foreseen later this year in the North American flat products sector after the current de stocking phase. Prices in the region are unlikely to attract imports to slow the escalation in the medium term. Both flat and long product prices in the EU are forecast to retreat over the next six months from their dizzy heights in 2007. Imports are likely to be an ever present threat. Oversupply in China should keep the lid on prices in Asia through 2007 and into the following year.”

For EU MEPS said that “In EU all product prices fell once again in July 2007. The decline was 2.8% and was faster than we anticipated in our deliberations in June 2007. This was due to a substantial reduction in selling values of bar and rod as demand fell ahead of the seasonal slowdown in construction. Scrap costs have also been steadily falling. We expect reasonably stable pricing conditions in both the flat and long products segments over the next few months. However, in the period to early 2008, a modest price reduction is envisaged. Winter weather will, almost certainly, reduce activity in the building/construction segment pushing selling values in the long products categories downwards. High inventories are likely to lead to weakening prices in the strip mill sector in the same time horizon. An upturn is forecast in the second trimester as supply and demand move nearer into equilibrium.”

For North America MEPS said that “High inventories and weak auto demand contributed to a further reduction in strip mill prices in July. This was the main contributing factor in the 2% reduction in the MEPS all product carbon steel price. Continued weakness in the strip mill sector will, almost certainly, push the all products price lower over the next few months. Overall price improvements are forecast for the final quarter of this year and well into 2008. Oversupply in the flat product segment should give way to a more balanced supply and demand situation. After a seasonal downturn during the last trimester in the long products category we forecast a pick up in activity and pricing through the first half of 2008.”

For Asia MEPS said that “A modest decline in the MEPS all products Asian price occurred in July. This was entirely due to significant decreases in selling values in the strip mill sector in China. Stable conditions prevailed in the flat products categories in the other three countries and in the long products sector. We continue to forecast reasonably steady market conditions across the region for the remainder of the year. A modest upturn is then envisaged in 2008 partly fuelled by higher input costs and a slight recovery in consumption. The main threat to this prediction will come from any further substantial increases in supply to the Chinese market from new capacity installations coming on stream over the review period. New export taxes on cold rolled coated products could also upset the delicate supply and demand balance.”

Evraz Group announces Q2 results for subsidiaries

Evraz Group SA announced that its major Russian operating subsidiaries have filed financial results with the Federal Financial Markets Service of the Russian Federation for the April to June 2007 in accordance with Russian accounting standards. Following is the RAS financial results for major Subsidiaries in April to June 2007

OAO Nizhny Tagil Iron and Steel Plant (NTMK)

In million RUB

OAO West Siberian Iron and Steel Plant (Zapsib)

In million RUB

OAO Kachkanarsky Mining and Processing Integrated Works (KGOK)

In million RUB

OAO Vysokogorsky Mining and Processing Integrated Works (VGOK)

In million RUB

Evraz Group SA is one of Russia’s largest vertically integrated steel and mining businesses. Evraz Group produced 16.1 million tonnes of crude steel in 2006. Evraz Groups principal assets include 3 of the leading steel plants in Russia namely Nizhny Tagil in the Urals region and West Siberian and Novokuznetsk in Siberia as well as Palini Bertoli in Italy, Vitkovice Steel in the Czech Republic, and Evraz Oregon Steel Mills headquartered in the USA.

Canada starts investigations into OCTG from China

It is reported that Canada Border Services Agency announced the initiation of its investigations into the alleged injurious dumping and subsidizing of certain seamless carbon or alloy steel oil and gas well casing, originating in or exported from the People's Republic of China on August 13th 2007.

The Canadian International Trade Tribunal will now begin a preliminary inquiry to determine whether the imports are harming Canadian producers. The Tribunal will issue a decision by October 12th 2007. While the Tribunal is examining the question of injury, the CBSA will investigate whether the imports are being dumped and or subsidized and will make a decision by November 9th 2007. If there is a large increase in harmful imports and the Tribunal decides that retroactive application of anti dumping or countervailing duty is justified, duty could be levied on the goods brought into Canada as of August 13th 2007.

CBSA said that the investigations follow a complaint filed by Tenaris Algoma Tubes Inc of Calgary in Alberta. The company alleges that the dumping and subsidizing of the goods in question are harming Canadian production by causing lost sales, price erosion, price suppression, lost revenues, reduced profitability, lost employment, underutilization of capacity and impairment to make future investments. It added that dumping occurs when goods are sold to importers in Canada at prices that are less than their selling prices in the exporter's domestic market or at unprofitable prices. Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance. The Special Import Measures Act protects Canadian producers from the damaging effects of such unfair trade.

CSN H1 net income surges by 129% YoY

Brazilian steel major Companhia Siderurgica Nacional announced its results for the second quarter of 2007.

The financial performance highlights are as under
1. CSN recorded net income of BRL 1.7 billion in the first half of 2007 up by 129% YoY and has created a new six month record.
2. Net Revenue of BRL 2.97 billion in the April to June 2007 quarter is also a new quarterly record
3. CSN recorded EBITDA of BRL 1.28 billion in April to June 2007 quarter up by 26% QoQ accompanied by an EBITDA margin of 43%
4. In June 2007, the parent company recorded an EBITDA margin of 52.5%, one of the highest in its history.

CSN said that due to the resumption of full production capacity in the Presidente Vargas Steelworks, its crude steel output moved up from 0.4 million tonnes in April to June 2006 to 1.3 million tonnes in April to June 2007 increase of 240% YoY. Its rolled steel production came to 1.3 million tonnes in the April to June 2006 up by 60% YoY and 11% QoQ.

CSN's average slab production cost in 2007, despite the 11% appreciation of the Brazilian Real in the last 12 months, remained at around USD 260 per tonne, once again positioning CSN as one of the most competitive and profitable producers in the global steel industry.

MMK to take 50 plus stake in Turkish steel rolling JV

Russian steel major Magnitogorsk Iron and Steel announced that it would own 50% plus one share in a USD 1.1 billion joint venture with Atakas Group that will build a steel complex in Turkey.

The new company, MMK Atakas Metalurji Sanayi, will produce 2.6 million tonnes per year of hot rolled and cold rolled steel at Istanbul and Iskenderun in Turkey. The project is scheduled to start within three years and will also produce galvanized steel sheet.

Mr Ahmet Tarkan Yildirim board member of the new company said "There's a significant need for flat steel in the domestic Turkish market and our production aims to meet this need."

High spot iron ore price to effect benchmark price negotiations

During recent days, price for spot imported iron ore makes new records frequently with jumping import volume. This is obviously not good news for the iron ore benchmark price negotiation by Chinese steel makers in this year end.

China Iron & Steel Association has decided at a conference on July 13th 2007 that Baosteel Group would participate in 2008 negotiation on behalf of Chinese steel makers. This is the fifth time Chinese steel makers take part in the benchmark price negotiation.

In the 26 negotiations from 1981 to 2007, price declines for 11 years, rises for 14 years and kept flat in 1985. However, iron ore price has gone up for four consecutive years since China officially joined in the negotiation in 2004. Total increment adds up to 165% during 2004-2007.

Mr Zhu Jimin chairman of Shougang Group recently said that iron ore price may keep firm next year with few possibilities of further price surges. According to Mr Zhu there is no contradiction between supply and demand in terms of total quantity. Balanced supply and demand relationship could bless steel industry with enough iron ore resources. Besides, new capacities will be put into operation in the future. As a result iron ore price in next year will remain flat with that in this year. Similar opinion has been expressed before by Mr Li Xiaowei chairman of Valin Group.

However, three iron ore giants expand production scales and merge major new iron ore mines, strengthening their monopoly. Despite some strong consolidation such as ArcelorMittal and TATA Corus, concentration in steel industry still falls behind that in iron ore industry. How to get a reasonable price is a new challenge especially against a backdrop that three iron ore giants continue expanding their monopoly. Given current market situation, global institutions all forecast iron ore benchmark price for 2008 will rise further.

This is especially the case in China. The country's iron ore imports record nearly half of the world's total sea borne trade yet output of 16 steel makers that participate in the negotiation, 188.04 million tonnes accounts for merely 44% of the nation's total output. The majority of China's imported iron ore resources are spot ones rather than contract ones. Rocketing ocean freight rate and speculations in this year in particular drive up spot prices. Latest statistics from customs show that China's iron ore imports reached 33.61 million tons in July 2007 hitting a new record up by 35.9%YoY and up by 6.71 million tonnes or 25%MoM. Imports during January to July amounted to 222 million tonnes up by 19% from that in 2006.

(Sourced from MySteel.net)

South Korean SBQ plate demand to outpace domestic supply

It is reported that almost all the South Korean steel makers are projecting or in the process of adding plate capacities, their combined output will still fail to satisfy the surging demand from the shipbuilders.

The Korea Shipbuilders' Association in its latest report said that South Korean SBQ plate consumption will grow at 12% annual pace in next four years and it would consume 7.52 million tonnes shipbuilding plate in 2007, 11.07 million tonnes in 2010 and 11.93 million tonnes in 2011.

According to Steel & Steel data, POSCO, Dongkuk Steel and Hyundai Steel etc will launch heavy steel plate lines from 2009 and take supply of shipbuilding plate to 8.2 million tonnes by 2011 and in 2007 4.1 million tonnes. However, this will fall behind the demand with some 4 million tonnes to be imported in 2009 and 3.73 million tonnes to import in 2011.

The Korea Shipbuilders' Association said global shipbuilding industry is developing sound, sending increasing orders to its shipbuilders, and making Korea the largest importer of this plate. Yet, it noted the plate should be high quality and it's hard to get suitable goods. The association said "In shipbuilding, South Korea and China are competitors. Volatile price resulting from material plate supply shortage is negative to Korean shipbuilders."

(Sourced from MySteel.net)

SA coal workers end 3 days long strike

It is reported that 3 days long strike at mines owned by Anglo American plc, Exxaro Resources Limited and Petmin Limited has ended.

Mr Reint Dykema spokesman of Solidarity labor union said that it has accepted an offer by mining companies to raise pay by 8% both this year and next and an offer to set up a task team to investigate pay and retention of skills, adding that the second year of the agreement is a 0.5% improvement.

But the companies denied that they had improved their offer. Mr Eric Nwedo a negotiator for the South African chamber of mines, which represents the companies, said that “There is no new offer that the companies have offered to Solidarity or any other union.” He added that the offer was made on August 3rd 2007 after which Solidarity decided to call a strike.

South African labor unions are pushing for wage increases exceeding the inflation rate because of rising fuel and food prices and at the same time, mining companies are trying to rein in costs. South Africa’s annual inflation rate is currently 6.4%.

Chinese foreign trade in 7 months exceeds USD 1.2 trillion

According to customs sources, the Chinese mainland's foreign trade in the first seven months of 2007 reached USD 1.17 trillion up by 24.4% YoY.

In USD billion

The total trade volume included USD 654.4 billion in export up by 28.6% YoY and USD 517.6 billion in import up by 19.5% YoY. The trade surplus was USD 136.8 billion or 77% of the figure for the whole of last year.

Customs sources said that China saw a robust growth of 28.4% in machinery and electrical products exports in the seven months, reaching USD 369 billion and export value of new and high tech products amounted to USD 180.8 billion up by 24.7% YoY.

Samuel Manu Tech acquires Northland Stainless Inc

Samuel Manu Tech Inc announced that it has acquired North America’s leading stainless steel pressure vessels manufacturer Northland Stainless Inc. The transaction is structured as a 100% stock purchase. The purchase price is USD 8.75 million subject to certain adjustments for working capital items. Management expects this acquisition to be accretive to earnings in its first full year of operations. Funding for the acquisition came from Samuel's existing revolving credit facilities.

Wisconsin based Northland was founded in 1973 and employing approximately 80 people. Northland has a long standing reputation in the steel pressure vessel industry and more recently has enjoyed considerable growth in the ethanol market. Annual sales of Northland approximated USD 17 million in the fiscal year 2007.

This strategic acquisition complements Samuel's existing steel pressure vessel operations, including its Silvan Industries division in Marinette, Wisconsin and its steel fabrication division at Abingdon in Virginia. , It is allowing it to expand its high quality product range and to further grow its market share in the pressure vessel industry.

Mr Mark Samuel chairman & CEO of Samuel said that "We are excited to welcome Northland Stainless, their management and employees to our group of companies. We consider them to be a positive addition to our steel pressure vessel group within our growing family of metal processing businesses."

Samuel Manu Tech Inc is a leading North American industrial products and technology company producing a wide range of steel, plastic and related industrial products and services from locations in Canada, the United States and Mexico.

Territory Resources may improve its bid for ConsMin

Mr Michael Kiernan chairman of Territory Resources said that it might improve its bid for Australian miner Consolidated Minerals depending on the bidder's view of future commodity prices. Mr Kiernan said that "We do reserve the right to vary and increase the terms of our bid. It depends on our view of commodity pricing and our feeling on the Australian dollar."

He added that the decision to do so or not to do so would be determined by whether Territory believes manganese and iron ore prices would rise or fall and the likely direction of the Australian dollar. Mr Kiernan said that "If we felt manganese and iron ore were going to come to an end and the dollar was going to go through the ceiling, we had be comfortable with the offer on the table."

Territory has bid AUD 2 and AUD 1 and a half of its shares for each Consolidated Minerals share, topping an earlier bid by Pallinghurst Resources. The board of Consolidated Minerals has recommended that shareholders accept Pallinghurst's proposal.

ArcelorMittal workers in Algeria threaten strike over VR

Thomson Financial reported that workers at ArcelorMittal's Al Hadjar plant in eastern Algeria have threatened to launch an indefinite strike from August 22nd 2007 if current negotiations fail to meet their demands.

Negotiations between the company and unions resumed after a first round of talks last week failed to bring an agreement.

The unions representing workers are opposing a plan to cut 1,200 out of a total of 8,000 jobs at the site by September 2007.

ArcelorMittal has stated that the program involves voluntary redundancies, with a bonus of around EUR 6,000 for each departing worker.

CSC production updates for July 2007

Taiwanese steel major China Steel Corporation has given a production update for the month of July 2007 and for January to July 2007.

Volume in tonnes

Amount in million TWD

July 2007 income includes long term investment income of TWD 800 million.

LGOK H1 revenue up by 54% YoY

Interfax reported that Lebedinsky GOK, a major iron ore producer from the Belgorod region of Russia, which is the leading enterprise of the Gazmetall mining and steel holding's iron ore division, boosted its sales revenue to Russian accounting standards by 54.5% YoY in January to June 2007 to RUB 18.175 billion.

LGOK in a financial statement said that its revenue grew on the back of higher iron ore sales volumes.

LGOK financial highlights for the January to June 2007

(In RUB million)

Unicoil to build a 3 million tonne steel mill in Saudi Arabia

YIEH reported that Saudi Arabian Unicoil plans to build a 3 million tonnes annual flat rolled mill to support the construction and mechanical and oil sectors in Middle East areas.

Once the plan gets approved, it will start the construction in the first half year of 2008 and come into stream in the second half year of 2011.

Unicoil said that 70% of their production would be supplied to UAE and their neighbors, the rest can be offered to Europe and South East Asia.

Collapsed Chinese bridge built without reinforcing steel - Report

It is reported that the bridge which collapsed in China killing at least 36 people broke apart because it had been built without steel reinforcement bars.

Work safety watchdogs were investigating the cause, but the newspaper quoted a rescuer as saying the bridge was mainly built solely of stone and concrete. A rescuer said that "No reinforced steel bars were seen in the collapsed bridge supports.” Pictures in newspapers supported his comments. Sections of the bridge lay flat on the ground, lumps of rock bursting through the concrete. No steel bars were to be seen.

Beijing News said that more than 1500 people were searching for 30 missing people after Monday's disaster on the 320 meters long bridge on the verge of completion across the Tuo River in the southern province of Hunan. But rescuers held out little hope of finding survivors.

Police have detained a construction manager and a project supervisor for questioning.

Talisman to focus on iron ore deposits in Pilbara

Osborne Park based copper gold explorer Talisman Mining Ltd has announced plans to shift focus onto iron ore mining following a report on the prospects of its 200 square kilometer Wonmunna project.

Announcing its move into iron ore as a potential new business driver, Talisman said its decision followed an independent consultancy report on the prospects for the Company's 100% owned and flagship Wonmunna project, to host commercial iron ore deposits. It said that the review found that the project has excellent potential for the definition of large tonnage, high grade iron ore deposits.

The tenement's known and estimated iron ore mineralisation systems lie between surface and the deeper primary copper zone. The project area, which was pegged by Talisman ahead of the current iron ore boom, extends east west over 35 kilometers and is closely surrounded by the high profile West Angelas, Area C, Hope Downs and Yandicoogina iron ore mines. The Wonmunna project is situated in the heartland of the Pilbara iron ore mining industry with excellent attendant infrastructure. The railhead at West Angelas is only 28 kilometers west of the center of the Wonmunna tenement. The Hope Downs rail spur, currently under construction, will pass approximately 10 kilometers to the north of the project.

Mr Steve Elliott MD of Talisman said that " Wonmunna had significant capacity to add substantial value to what was an already outstanding exploration asset. He said "We have just commenced a new 2,000 meter Reverse Circulation copper drilling program on the project area and when that concludes, will immediately reallocate the rig for a similar sized and wide spaced RC iron ore drilling program. Smaller drill programs there last year recorded peak iron ore values in the two different styles of iron ore mineralisation, of 22 meters at 60.8% Fe, indicating excellent potential for locating higher grade zones."

Wonmunna already hosts Talisman's key copper, zinc, gold, silver massive sulphides exploration targets.

Egypt to grant 4 licenses to build steel mills

Trade Arabia reported that Egyptian government would sell four licenses to build steel mills to reduce the country's need for imported steel.

Egyptian ministry of trade and industry in a statement said that the government would sell two licenses for steel billet mills and two licences for DRI steel production mills with a total capacity of 7 million tonnes a year without giving more details.

The ministry added that Egypt, the Arab world's most populous country went from importing 2 million tonnes of steel a year less than 10 years ago to become an exporter of 900,000 tonnes in 2006. According to Egypt’s government data it produced about 4.3 million tonnes of steel in the same year. However as per the International Iron & Steel Institute, Egypt's crude steel output stood at 6 million tonnes in 2006.

Khartsyzsk production of large dia pipes in 7 months up by 18% YoY

Journal Staff Reported that Metinvest holding's Khartsyzsk Pipe Mill from Ukraine has increased production of large diameter pipes by 17.9% YoY in January to July 2007 to 369,900 tonnes including 28,900 tonnes in July 2007 down by 50% YoY.

Khartsyzsk Pipe Mill’s production of large diameter pipes with anti corrosive grew by 27.1% YoY in the seven months to 341,000 tons including 25,900 tonnes in July 2007.

Large diameter pipe production at Khartsyzsk rose by 9.2% in 2006 to 595,700 tonnes.

Leighton eying Middle East boom to fuel its growth plans

Australian engineering and construction major Leighton Holdings Ltd will continue to aggressively target the Middle East for its ambitious growth plans.

Mr Wal King CEO of Leighton told that the Middle East is absolutely booming, with USD 1.4 trillion worth of projects planned in the region, USD 25 billion of which are in Abu Dhabi including museums and a performing arts center.

Mr King said that ''The Gulf is the biggest construction market in the world per capita. We would consider joint ventures and acquisitions and are holing discussions with the largest construction company in the Middle East. It is just staggering the amount of projects in Abu Dhabi.'' He said that Leighton is exploring alliances and acquisitions in the Middle East but did not elaborating.

Mr King also said the high levels of mining were unlikely to decrease and wanted to secure mining deals in India, China and Canada and opportunities for major infrastructure contracts in Australia were expected to continue. Mr King said ''Opportunities out there are big and large. We have a growing population and we have under invested. There are water shortages and traffic jams, which are driving along greater infrastructure opportunities.''

Leighton Holdings Ltd has posted a 65% increase in second half profit as infrastructure and mining contracts swelled its order book to an all time high. Its net income in the six months ended June 30th 2007 rose to AUD 260 million from AUD 158 million a year earlier.

Roberto Rocca Education Program awards 17 fellowships

Tenaris announced that as part of an initiative to honor Tenaris's late Chairman, Mr Roberto Rocca, seventeen students received fellowships to pursue PhDs in Engineering.

This year, seventeen students from Argentina, Brazil, Colombia, Mexico, Romania and Venezuela were awarded fellowships to pursue doctoral degrees in engineering at universities throughout the United States, Europe and Canada. Each fellow receives up to USD 100,000 for two years towards the cost of his or her education. These scholars join the seven students from Argentina, Mexico and Venezuela who were awarded the very first Roberto Rocca Fellowships in 2006.

Mr Dan Krishock director of the Roberto Rocca Education Program explained that the selected scholars shared three important qualities. He said “They have achieved academic and professional excellence, demonstrated great commitment to their countries' economic and industrial development and showed a strong industrial vocation.”

Founded in 2005 to honor the late Chairman of the Techint Group, Mr Roberto Rocca, the Roberto Rocca Education Program is supported by Tenaris, Ternium and Techint. The Roberto Rocca Education Program awards scholarships and fellowships to outstanding undergraduate and graduate students of engineering and the applied sciences in selected countries. The Program was created on the premise that human resources that advance industry and technology are critical to a country's economic success. Yet in too many countries the need for those resources is not being met as fewer young people choose to study engineering and the applied sciences.

Along with the fellowships, the Roberto Rocca Education Program also provides scholarships. These are granted to undergraduate engineering students in Argentina, Brazil, Colombia, China, Italy, Japan, Mexico, Romania and Venezuela. Though each country's program has its own distinct features, in all cases scholarships are awarded exclusively for study at domestic universities. Throughout 2007, almost 700 scholarships will be awarded.

Plan commissioners approve Mittal Steel Burn harbor landfill plan

It is reported that the Advisory Plan Commission approved a special exception for a landfill to be constructed on 75.7 acres at Mittal Steel USA. The landfill will be used for waste produced by the Burns Harbor plant from processing steel and about 1.5 million tons to 1.8 million tons of waste that now is stored on the ground. About 14 million tons of waste will be dumped at the site during the next 25 to 30 years.

The Deerfield Storage Facility will range in depth from 5 feet to 10 feet below existing grade to 5 feet to 10 feet above existing grade. It will be built above the water table and include a series of 12 inch layers of drainage material, native soil and a geo synthetic clay liner, which simulates the properties of natural geological deposits such as clay. Waste material will be covered with additional drainage material to filter storm water.

The Indiana Department of Environmental Management will require that Mittal Steel maintain the cap on the facility and monitor ground water for 30 years after it is filled with waste and covered. The facility still requires a permit from IDEM, which will map out its own conditions in the process. The proposal will be turned over to the Board of Zoning Appeals for final consideration. A public hearing before the zoning board is set for August 28th 2007.

There is no technology available to recycle the material, which contains oil, grease, zinc and lead. The waste is made up of 30% to 40% solids. The liquid portion is mixed with lime, which gives it a clay like consistency that is stackable once dried. Processing improvements are being evaluated to lessen the amount of liquid that must be treated with lime. Mittal Steel hopes to be able to recover iron when that technology becomes available.

Russia to tighten mineral resources rules for foreign firms

Interfax reported that Russia's government is proposing that the current rules on the use of Russian mineral resources by foreign companies be made a bit stricter.

The report cited Mr Yury Trutnev mineral resources minister of Russia as saying that the government is proposing that foreign companies be prohibited from acquiring a controlling stake in the development of all offshore deposits and any onshore deposit containing more than 70 million tones of oil, more than 50 billion cubic meters of gas, more than 50 tonnes of vein gold or more than 500,000 tonnes of copper.

Mr Trutnev said that "A draft law on mineral resources is in effect another legal realm in Russia. Today 56% of direct tax receipts for the budget of the Russian Federation depend on mineral resources. This means it is a matter of general consensus how to change this policy. The government has stated its position. The draft law that we have submitted has received unanimous support. Nevertheless, it is difficult to answer the question as to when the State Duma will give it consideration. This will happen when the state decides that mineral resources should be regulated not by administrative principles as today but by market principles as the law proposes. The matter is under discussion."

Mr Hathaway to retire from Harsco as CEO and chairman

Industrial services conglomerate Harsco Corp announced that Mr Derek C Hathaway chairman & CEO will retire next year and be succeeded by Mr Salvatore D Fazzolari CFO. Mr Fazzolari will take over as CEO on January 1st 2007 and will be elected chairman in April, when Mr Hathaway retires from the board.

Mr Hathaway has held the positions since 1994. He joined Harsco in 1984 after the Camp Hill based company purchased the engineering company that Hathaway had founded in the United Kingdom.

Harsco lists eight principal lines of business worldwide, including services for construction sites, steel mills and railways and manufacturing products from high-pressure gas cylinders to roofing materials. Harsco reported earnings of USD 196.4 million on USD 3.4 billion in revenue for 2006.

Russian nickel exports in H1 of 2007 down 5.2%YoY

According to the latest figures from the Russia’s customs department, Russia’s exports of refined nickel during January to June 2007 are 113,200 tonnes down by 5.2% YoY as compared to 119,200 tonnes in January to June 2006.

Russia’s custom department said that Russian nickel exports have been running consistently below year earlier levels this year although the gap has closed significantly over the course of the second quarter.

It added that exports in June 2007 itself were a low 10,800 tonnes but this is normal and reflects the May and June closure of the port of Dudinka the far northern export port for Norilsk Nickel due to the annual spring flooding.

Worker unions to watch BlueScope plant closure effects

It is reported that Bluescope unions will closely monitor the treatment of workers at the soon to be closed Bluescope’s CRM Service Centre at Port Kembla on the New South Wales south coast. As per report ninety jobs will be lost at the BlueScope Steel plant as it closes down progressively over the next two years.

BlueScope Steel said that it would aim to offer voluntary redundancies and redeployment within the company for those employees affected by the closure. It added that the plant needed to be closed because it is more than 40 years old and it would have been difficult to install new machinery at the site.

Mr Brad Hattenfels from the Australian Manufacturing Workers Union said that “It is a good commitment, but the company has not always treated workers well when closing down facilities. We just hope the company abides by their decision and we don't run down the situation like the tin mill, where the unions had to fight tooth and nail for the company to come up with what we thought was a commonsense approach."

Jinchuan forms JV with Qingi Mining to explore resources

Interfax China reported that China's largest nickel producer Gansu Jinchuan Group recently set up a JV with a Gansu based mining company Qinqi Mining Co Ltd to develop iron ore, copper, tungsten and minor metal resources in China.

Mr Gao a general affairs official of Qinqi Mining said that the joint venture will prospect for iron ore, copper, tungsten, rare earth, niobium and tantalum resources in the 10 mines to which Qinqi holds exploration licenses, covering an area of 300 square kilometers. He added that "Jinchuan is the controlling shareholder in the joint venture and will therefore fully finance the prospecting work."

Mr Gao said that to facilitate mine development Qinqi Mining has strengthened its cooperation with various foreign mining companies in order to take advantage of both their capital and technology.

Qinqi Mining Co Ltd is wholly owned by the Gansu Geology and Mine Survey Bureau, which owns more than 10 exploration licenses both in Gansu Province and other regions in China. Earlier it formed a JV with Rio Tinto in 2002 in order to carry out due diligence assessments on copper deposits in Gansu Province and the Inner Mongolia Autonomous Region. The company also established a JV with Canadian based Pargas Enterprises Ltd in 2004 to develop mineral resources in southern Gansu Province.

Western Canadian Coal announces Q1 results

Western Canadian Coal Corp has posted a net loss of CAD 3.06 million for the April to June 2007 quarter as compared with a net income loss of CAD 2.31 million in April to June 2006 quarter. Its total sales rose to CAD 54.21 million in April to June 2007 quarter up by 80.8% YoY as against CAD 29.98 million in April to June 2006 quarter.

Sales for the April to June 2007 quarter consist of 629,000 tonnes of coal from the Wolverine project, Perry Creek Mine and the Burnt River project and Brule Mine. The primary reason for the increase in total revenues over the comparable period in the prior year is the increase in sales volume due to the commencement of sales from the Perry Creek mine.

Sales in tonnes
Others in ‘000 CAD

Western Canadian Coal said that it expects a production of 2.4 million tonnes from the Perry Creek Mine, out of which about 2.1 million tonnes will be marketed as hard coking coal.