SAIL & POSCO sign MoU to form strategic alliance

India's largest steel producer Steel Authority of India Limited and South Korea's largest steel company POSCO have signed a landmark MoU to establish a strategic alliance for aligning and cooperating with each other in a wide range of strategic business and commercial interest areas. Mr G Ojha director personnel of SAIL and Mr Soung-sik Cho senior executive VP & member of board of POSCO signed the MoU in the presence of Mr SK Roongta chairman SAIL in New Delhi.

The MoU states that the alliance partners have agreed to cooperate in the following areas of business
1. Information sharing in the area of corporate strategy planning
2. Exchange of engineers, technicians and other professionals
3. Sharing of know-how and expertise in the areas of development of mines and business practices such as ERP, PI and Six Sigma
4. Joint usage of each other's existing marketing and warehousing network
5. Coordination in procurement of coking coal, nickel and ferroalloys and engagement of transportation vessels.

The alliance partners will establish a joint coordination group within two weeks to monitor, guide and review the implementation process of the MoU, which will be effective and operative for three years initially.

Subject to further discussions, both companies will also cooperate in areas relating to joint R&D projects and any other projects to be mutually agreed upon.

A SAIL release said that “The strategic alliance between the two steel giants is a significant step towards synergizing their strengths while retaining their identities in the rapidly consolidating global steel industry. SAIL and POSCO have been extending support and cooperation to each other in different fields. This alliance will not only reinforce the relationship but also open an era of large scale collaboration on strategic business and commercial alignment.”

NTPC to set up mega hydel project in Arunachal Pradesh

It is reported that National Thermal Power Corporation is planning a big push to its renewable energy foray with a 4,000MW hydel project called Etalin in Arunachal Pradesh. The Etalin project is the result of a conscious attempt by the utility to diversify its fuel base and focus on renewable energy in a big way.

The project, to be set up at an estimated cost of INR 14,069 crore, would entail the construction of sixteen 250MW units. NTPC, which is carrying out necessary survey and investigations work for the project at the site, is looking to complete the detailed project report preparation by June 2009.

To put the proposed Etalin hydro project’s size in perspective, it may be mentioned that the project would only be marginally lower in size that the current installed capacity of all of National Hydroelectric Power Corporation’s 12 stations put together. The size of the project, however, pales in comparison with Three Gorges project in China and Itaipu project in Brazil. The capacities of some of the large hydro projects in the world are as under

Capacity in MW

NTPC is already in the process of implementing 3 hydel projects in the northern region
1. 800MW Koldam project in Himachal Pradesh
2. 600MW Loharinag Pala in Uttarakhand
3. 520MW Tapovan Vishnugad projects in Uttarakhand
Of the 3 hydel projects under construction, the Koldam project would be commissioned in 2008-09 and the Loharinag Pala and Tapovan Vishnugad projects are to be commissioned by 2010.

A NTPC official said that “While we have developed a core competence in execution of thermal projects, NTPC is moving towards becoming an integrated energy utility with a diversified fuel mix. We are also eyeing other emerging areas, including nuclear, wind and geothermal energy.”

Punj Lloyd sells 11% stake to raise INR 814 crores

BS reported that some private equity funds including Warburg Pincus, Blackstone & Avenue Capital and hedge funds DKR Oasis & Kingdom Capital have bought a total of 11% stake in Punj Lloyd for INR 814 crore. As per report, Warburg Pincus has bought 5.5% stake, Avenue Capital has acquired 2.5% to 3%. Blackstone bought somewhere between 0.5% and 1% and Moore Capital bought 1% to 1.5% stake.

Following the placement, Punj Lloyd’s paid up capital has gone up from INR 29 crore.

Mr Ravi Keswani director finance of Punj Lloyd said that it would invest INR 400 crore to buy a strategic 25.1% stake in Pipavav Shipyard and would spend another INR 80 crore for its foray into real estate development and the remaining amount would be spent on its capital expenditure plans.

The Pipavav shipyard complex will give Punj Lloyd access to fabrication facilities for off shore platforms, single buoy moorings and rigs and the facility at Pipavav shipyard can also be used for fabrication of vessels for petrochemicals and refineries.

PIB approves 1,000 MW power plant at Tuticorin

PTI reported that public investment board has given clearance for the 1,000MW coal based thermal power station, to be jointly executed by Neyveli Lignite Corporation and Tamil Nadu Electricity Board at Tuticorin.

Mr S Jayaraman chairman of Neyveli Lignite Corporation said that the project is now awaiting sanction from the union government. He added that “Work is in progress on a 500MW power station and lignite mine at Neyveli and production and power generation will start at the end of 2009.”

Neyveli Lignite Corporation has recorded a sales turnover of INR 2,610.26 crore in 2006-07 as compared to INR 2,502.02 crore in 2005-06. Consequent to the central electricity regulatory commission order on power station for the period during April 2001 to March 2004, INR 502.15 crore has been reduced from the current year sales turnover. While it’s net profit is INR 566.78 crore for 2006-07 as against INR 702.35 crore in 2005-06.

SCI places oil tanker orders on Hyundai

BS reported that Shipping Corporation of India Limited has placed orders for 4 Aframax crude oil tankers and 2 LR-II size product tankers with Korean Hyundai Heavy Industries. The shipbuilding contracts for the vessels were signed on August 10th 2007.

The 4 Aframax and 2 LR-II tankers would be built to global specifications and will deliver during 2010 and 2011. The vessels would be dual classed with American Bureau of Shipping and Indian Registrar of Shipping.

This is the largest ever shipbuilding contract in terms of value, signed by SCI with any shipyard since its inception in 1961. This is part of the 12 vessels for which SCI received approval of the government earlier in August 2007. The other 2 projects in the block are 4 Panamax bulk carriers and 2 x 5,000 10 container vessels. SCI is processing these 2 projects expeditiously and these would also be formalized soon.

With the signing of these contracts, SCI order book position has increased to 18 vessels which include 2 VLCCs, 2 x 4,400 10 container vessels, 6 LR-I and two MR Product tankers and the 6 vessels ordered now.

SCI is also planning to acquire another 56 vessels in various size categories during the 11th Five Plan period. It has already floated global tenders for acquisition of Panamax bulk carriers and Anchor Handling & Tug supply vessels and the contracts for these would be finalized in the near future. Acquisition of these vessels would further enhance SCI dominant position in the Indian shipping industry as well as improve its standing in the international market.

HZL reduces zinc prices by 2.7%

Hindustan Zinc Limited announced that it has cut zinc prices by 2.7% to INR 153,900 (USD 3,735) per tonne with immediate effect.

It has also cut lead prices by 1.9% to INR 137,000 per tonne.

Lanco Infratech concludes corporate restructuring plan

BL reported that power and infrastructure developer Lanco Infratech Limited has concluded a corporate restructuring plan. Following the restructure process, Lanco Infratech has become a holding cum operating company assuming the role of an integrated infrastructure developer with majority investments in various special purpose vehicles. Lanco Infratech Limited operates through 3 divisions like handling power projects, roads and infrastructure and engaged in property development.

Mr G Venkatesh Babu MD of Lanco Infratech said that the restructure process was initiated last year before the initial public offer and has been concluded with the shareholding in different groups getting consolidated including investments in several power projects such as Nagarjuna in Mangalore and Aban in Tamil Nadu. Mr Babu said that “All the investments would now be handled through special purpose vehicles and we are aggressively pursuing other ultra mega power projects and coal bidding process in Chhattisgarh, Uttaranchal and Orissa.”

He added that the reorganization was undertaken to consolidate the power, construction and property development assets of the promoter group and the Lanco group under the company including acquisition of promoters’ and other partners’ assets in various subsidiaries and associates including 25.1% stake in Lanco Kondapalli and 13.3% in Aban Power Company.

HSL vessel order book crosses INR 2,000 crore

Mr Ajit Tewari CMD of Hindustan Shipyard Limited said that it has orders worth INR 2,000 crore on hand for construction of 19 ships and repairing of a submarine. He exhorted the workers and employees to put in their best efforts to deliver these vessels on time during the next 3 to 4 years.

Mr Tewari said that “It is a matter of great joy and pride that during the past 3 years we have made significant strides and our income has risen from INR 127 crore to INR 400 crore. The immediate priority is to deliver the 700 seater passenger vessel required for operation in the Lakshadweep islands by the August 2007 end.”

He added that Hindustan Shipyard Limited had delivered a 30,000 DWT trader series bulkers in May 2007 and 2 more ships of the same class would be delivered during the current financial year.

Gammon and Oragados consortium bags Mummabi container terminal project

Construction major Gammon India Limited announced that that a consortium of Gammon and Oragados SPL has received the letter of intent for the Mumbai Offshore Container Terminal Project.

The estimated project cost is about INR 800 crores in the initial phase of 3 years and another INR 400 crores subsequently, thus aggregating about INR 1200 crores. The Project is on a BOT basis for 30 years, including 3 years of construction & equipping period.

Gammon India has 50% stake in the consortium and balance is held by Oragados SPL.

Videocon forms SPV for East Timor petroleum block

It is reported that consumer electronics manufacturer Videocon Industries has set up a special purpose vehicle called Global Energy Inc as a wholly owned subsidiary, to explore, develop and exploit petroleum block JPDA 06-103 in the Timor Sea between Australia and East Timor.

Global Energy is part of the consortium, which was awarded the JPDA 06-103 production sharing contract by the Timor Sea designated authority. Global Energy's participating interest in the block is 25%. With this, it would facilitate zeroing in on the four well locations for the commitment wells included in the minimum work program. Drilling is anticipated to start in 2008. Videocon's share in the current work program is USD 18.9 million.

JPDA is within the Bonaparte Basin with estimated 23 tumor cytotoxic factor of undiscovered EUR gas reserves. There is a gas field in the JPDA namely Bayu Undan, with 3.4 tumor cytotoxic factor of gas reserves and 400 million barrels of condensate and LPG reserves, which exports dry gas via a 26 inches pipeline to Darwin in North Western Australia. In the block 06-103, leads 103-A and 103-C have been identified with recoverable un risked potential of 260 million barrels of oil.

China considering further curbs on coke export

China, the world's biggest coke producer and exporter, is considering new curbs on overseas shipment of the fuel used to make steel, as part of its efforts to reduce pollution at home.

Mr Hou Shiguo an official from China’s National Development and Reform Commission told China Daily that the government is likely to further up tariffs on coke exports in the second half of this year. He added that Chinese government is also considering cutting coke export quotas for trading firms and raising the qualification for the business. But he did not reveal the details of these new measures.

Mr Hou said that "We should not ship so much coke abroad at the cost of our environment as the sector is highly polluting.”

He added that “Coke producers should watch the market closely and prevent excessive production growth as demand for the material is likely to slow down in the second half because of slackening steel production.”

China has granted two batches of coke export quotas totaling almost 13.3 million tons so far this year. On June 1st 2007, China increased the tariff on coke exports to 15% from 5% in a bid to rein in overseas shipment.

China has a total coking capacity of 360 million tonnes. A new 10 million tonne capacity will be put into operation in the second half of the year. In the first six months of this year, coke production in China grew by 21% YoY to 156.8 million tonnes. According to Customs data, Chinese exports of coke during January to July 2007 jumped up by 20.1% YoY to 9 million tons, boosted by strong demand and prices in the international market,

Mr Huang Jin'gan, president of the China Coking Industry Association forecast that China’s full year production for 2007 will hit 320 million tonnes up from 298 million tonnes in 2006 and exports would reach 15 million tons, up from 14.5 million tons last year.

Hot band prices starting to firm up

SteelBenchmarker reported that the US hot rolled band spot price for August 13th 2007 fell by1.6% to USD 560 per tonne on FOB mill basis for the eighth consecutive time. The World export HRB price rose by 1.3% to USD 557 per tonne FOB port of export after falling eight consecutive times. The Chinese HRB ex works price surged by 4.4% to USD 428 per tonne, the second consecutive rise. And the Western European HRB price stayed flat on dollar basis at USD 663 per tonne, ex works, after falling three consecutive times, but on a euro basis it was up 1.9%.

The 4 benchmark prices for HRB included in the August 13th 2007 report are

1. US
USD 560 per ton (USD 508 per net ton) FOB mill
Down by USD 9 per tonne from USD 569 two weeks ago
Down by USD 70 per ton from the high of USD 630 on April 9th 2007
Down by USD 11 per tonne from the low of USD 571 on January 22nd 2007

2. World Export Price
USD 557 per ton FOB port of export
Up by USD 7 per tonne versus USD 550 two weeks ago
Down by USD 39 per tonne from the recent high of USD 596 on March 26th 2007
Up by USD 58 per tonne from the previous low of USD 499 on December 11th 2006

3. Western Europe
USD 663 per ton (EUR 488) Ex works
Flat on dollar basis as compared to USD 663 two weeks ago
Down by USD 33 per tonne from the recent high of USD 696 on June 11th 2007
Up by USD 107 per tonne from the low of USD 556 on November 27th 2006

4. China
USD 428per ton Ex works
Up USD 18 per ton from USD 410 two weeks ago
Down by USD 29 per ton from the recent high of USD 457 on May 14th 2007
Up by USD 55 per tonne from the low of USD 373 on July 24th 2006

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar, and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

Japan's H1 SS output up by 15.4%YoY

According to Japanese government data released recently, Japan's stainless steel output in January to June 2007 rose by 15.4%YoY to 1,854,749 million tonnes. Japanese industry sources, however, cautioned that the 15.4%YoY production increase may be number magic which could mislead the stainless industry outlook for the second half of this year.

The breakdown of the January to June 2007 stainless steel production by stainless type is
1. Chrome stainless - 679,811 tonnes
2. Chrome molybdenum stainless - 104,883 tonnes
3. Chrome manganese stainless - 63,087 tonnes
4. Chrome nickel stainless - 834,665 tonnes
5. Chrome nickel molybdenum stainless - 172,303 tonnes.

Japanese stainless steel producer, nickel trader and nickel producer sources agreed that the stainless output by Japanese mills has been strong in the first three months of this year. The steady demand came from active commercial building constructions as well as rising demand in machineries accompanying the expansion of the Japanese economy, Demand was domestic market driven and not from exports that have slowed down. Stainless steel exports fell by 5.4%YoY to 662,340 million tonnes in January to June 2007.

The nickel industry source pointed out that the 15.4% increment was a result of comparing the January to June 2007 figures with a period of low growth. In the first half of 2006 Japanese stainless steel mills were just recovering from output cuts in 2005. If you compare the January to June 2007 figures with that of the previous semester July to December 2006 you won't see a major rise.

Sources agreed that stainless steel production after July is likely to fall below 300,000 million tonnes per month due to output cuts implemented by several Japanese stainless steel mills.

CISA refutes US ITC preliminary ruling on Chinese pipes

It is reported that China Iron & Steel Association has denounced that US ITC made preliminary ruling August 10th 2007 on China's light walled rectangular pipe as materially injuring to its industry is groundless.

Mr Zhang Jingang deputy secretary general of CISA said that “US steel industry is in fact making fat profits, while the Chinese government did not make any subsidy and no alleged material injure to its industry at all.” Mr Zhang said that China's export attitude is restrictive rather than subsidizing. He added the US government should envisage steel industry's competition on the global arena.

The US International Trade Commission said a US industry is materially injured or threatened with material injury by reason of imports from China of circular welded carbon quality steel pipe.

Cleveland Cliffs selects Michigan site for iron nugget plant

Cleveland Cliffs Inc announced it along with JV partner Kobe Steel Ltd. intend to construct a commercial scale iron nugget production facility at Cliffs’ Empire Mine site at Palmer in Michigan state of US. Production, projected at 500,000 tons per year, is expected to commence by early 2010.

The project is subject to obtaining environmental permits, execution of final agreements between Cliffs and Kobe, and final approval of each company’s board of directors. Next steps in the process involve facility design and workforce development.

The new facility will use Kobe’s patented ITmk3 iron making technology under a 10 year alliance agreement, to produce high-purity iron nuggets containing more than 96% iron. Using the Kobe process, the iron ore feed would bypass the blast furnace and provide a consistent source of very high quality domestic metallic feed in nugget form. These iron nuggets would be used as a raw material feed for the North American steel industry’s mini mill market, which currently uses electric arc furnaces to melt pig iron or recycled steel products to produce new steel.

Mr Joseph A Carrabba chairman, president & CEO said “This project furthers one of Cliffs’ key strategic objectives to sustain its leadership position in metallics related processes and should open a very promising and growing new market for our Company. The selection of Empire as the location for the initial nugget plant involved an exhaustive process, with permitting considerations playing a major role. Additionally, locating the new facility at Empire will extend Cliffs’ operations there, as the mine’s current pellet equivalent ore reserves and operating plan would exhaust palletizing capacity by 2010.”

Currently, Empire Mine produces iron ore pellets, which contain approximately 65% iron, that are used as a feed in blast furnaces to produce steel.

ArcelorMittal announces receipt of writ of summons

ArcelorMittal announced that it has received a writ of summons on behalf of certain shareholders of Arcelor SA including SRM Global Master Fund Limited Partnership, Trafalgar Catalyst Fund and Trafalgar Entropy Fund to appear before a judge in summary proceedings of the court of Rotterdam August 22nd 2007.

The release added that the claimants are seeking an injunction against the merger of Mittal Steel and ArcelorMittal SA and against actions that would lead to implement a merger with Arcelor SA at a share exchange ratio departing from 11 ArcelorMittal shares for every 7 Arcelor shares.

ArcelorMittal release referred to the press release it has published on June 15th 2007 as a reaction to the allegations by the same parties with respect to the merger process and the proposed merger exchange ratio of 8 ArcelorMittal shares for every 7 Arcelor shares.

The release said “ArcelorMittal believes there are no grounds to these claims.” It added that ArcelorMittal would provide a further update in due course.

US and Canadian steel inventories continue to decline

US based Metals Service Center Institute in its latest Metals Activity Report said that inventories of steel products continued to fall at US and Canadian metals service centers in July, reflecting sluggish summer demand and the uncertain economic environment. But it added that despite the continuing declines, inventories expressed in terms of months of supply on hand have not yet reached the lows seen in other inventory cycles.

Steel inventories at US metals service centers fell to 13.4 million tons at the end of July, 12% lower than the same month a year ago and the lowest level since February 2006. Despite the decline, steel stockpiles remained well above the cyclical low for US steel inventories of 12.5 million tons reached in November 2005. Canadian service center steel inventories dropped to their lowest level since May 2006.

Shipments of steel products from US metals service centers totaled nearly 4.2 million tons, 6.3% lower than volume in July 2006. This marked the 11th consecutive month of year over year US steel shipment declines. At current declining shipping rates, US steel inventories at the end of July were sufficient for 3.2 months of shipments, unchanged from June.

Steel shipments from Canadian service centers were 270,200 tons in July, down 9.6% from a year ago and the 12th consecutive month of year over year shipment declines. Canadian steel inventories of nearly 1.2 million tons, down slightly from June, were 12% lower than in July 2006 and, at current shipping rates, represented a 4.4 month supply.

The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third party econometrics and strategy firm, McCoy, Scott & Co.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers.

CSN plans to produce plates and rails in new plants

BNamericas reported that Brazilian steel maker CSN plans to enter new markets at home with production of heavy plates and rail track. Mr Benjamin Steinbruch president of CSN told analysts and investors in São Paulo that "CSN is in a condition to secure a market share of 20% in segments in which we are not currently participating.”

CSN plans to build two new steel plants in Rio de Janeiro and Minas Gerais states, due to require investment of USD 6 billion. According to earlier reports, the Rio de Janeiro mill is expected to start operations in the second half of 2009, while the Minas Gerais plant is scheduled to start production in the second half of 2010.

Mr Otávio Lazcano CFO of CSN told reporters “Of the total 9 million tonne per year new capacity, 4.5 million tonne will focus on the local market, in products which we do not yet produce such as long steel, heavy plates and rail track. The remaining 4.5 million tonne capacity would be shipped abroad to be processed into added value products.”

Mr Lazcano added that CSN is still in talks with Chinese steel maker Baosteel regarding a minority stake in the new steel mills.

CSN has current crude steel capacity of 5.6 million tonnes per year.

Klöckner & Co announces Q2 and H1 results

Klöckner & Co has posted a successful first half of 2007. A company releases said that “In the first six months of 2007, the Company further improved its operating result. Expansion at the Klöckner & Co Group continued in line with planning with the purchase of eight steel and multi metal distribution companies. At the same time, Group financing was further optimized on the basis of a syndicated holding facility and the successful placement of a convertible bond. Thus all the estimates for the first half-year 2007 were met and the prospects for the full year 2007 are also positive.”

The performance has been as under

In EUR million
Sales in million tonnes

Dr Thomas Ludwig chairman of the Klöckner & Co AG management board said "In the first six months, a sound basis for a successful fiscal year 2007 was established. We are confident to generate in 2007 a result at the high level of the previous year.”

In the first six months of 2007, the Klöckner & Co Group successfully continued its expansion strategy. In total, eight companies with total sales of approximately EUR 500 million have been acquired in Europe and North America so far in 2007. In addition, in June 2007, the majority interest in the highly profitable Swiss company Debrunner Koenig Holding AG was boosted by approximately 18% to roughly 78%.

In Europe, the distribution company Tournier Holding SAS was acquired in France at the beginning of the year. In April 2007, the Dutch stainless steel distributor Teuling Staal B.V. was acquired. In Germany, Klöckner & Co bought up three companies in May 2007: Edelstahlservice Verkaufsgesellschaft GmbH, headquartered in Frankfurt/Main, the steel distribution of Coburg-based Max Carl GmbH & Co KG and Zweygart Fachhandelsgruppe GmbH & Co. KG, Stuttgart. In June, the British company Westok Ltd. was acquired. It specializes in the manufacture and distribution of special steel beams for ceiling, roof and bridge constructions.

In North America, a deal was signed in April 2007 for the acquisition of Primary Steel LLC, including its seven subsidiaries in the US. In addition, as a regional supplement, the distribution company Premier Steel Inc. headquartered in Louisiana was acquired in May.

Republic Engineered and workers reach deal

It is reported that about 2,000 workers at Republic Engineered Products steel plants in three states avoided a strike by reaching a tentative contract agreement, the company and the United Steel Workers union. A five year contract had expired Wednesday at midnight.

Details of the agreement, reached during negotiations in Pittsburgh, were not disclosed, pending a review by workers. But the union said it includes wage increases, an improved profit sharing plan, a continuation of fully paid health care coverage and an added paid holiday.

Mr Jaime Vigil president & CEO of Republic Engineered said that the tentative agreement truly serves the best interests of everyone involved. He said “Our goal was to come to an agreement that is fair to both sides."

Republic Engineered Products, based in Fairlawn, Ohio, about 30 miles south of Cleveland, makes bar steel used primarily in motor vehicles, appliances and machinery. The USW represents company workers at five plants at Canton, Massillon and Lorain in Ohio, Lackawanna in New York and Gary in Indiana.

Chinese iron ore import during H1 of 2007

As per the data from Chinese customs, China imported 187.91 million tonnes of iron ore during January to June 2007 period.
Although the iron ore imports took place from 29 countries, but Australia, India and Brazil accounted for 86% of the total imports.

In million tonnes

(Sourced from Mysteel.net)

SCM raises USD 545 million syndicated loan

Ukrainian Journal reported that Donetsk based System Capital Management, which is 90% owned by Mr Rinat Akhmetov, has raised a four year debut syndicated loan worth USD 545 million through Paribas (Suisse).

The deal involved 17 banks, four of which Bayerische Hypound Vereinbank AG (UniCredit Group), NATIXIS, Raiffeisen Zentralbank Osterreich AG and Standard bank plc, acted as authorized leading organizers of the loan.

SCM said that the loan would be secured by 60% of shares plus one share of Pivnichny and Tsentralny ore mills.

China to close down 10,000 small coalmines by 2007 end

According to Mr Li Yizhong director general of China’s State Administration of Work Safety, China will shut down over 10,000 small coalmines within 2007.

In the second half of 2005, China decided to consolidate and shut down illegal or unsafe coal mines and try to ward off frequent incidents and energy wastes in small coalmines within three years. China planned to close 10,000 small coalmines.

The campaign is divided into two stages
1. The first stage extended from latter half of 2005 to September of 2006 with closure of 5931 small coalmines and elimination of 110 million tonnes of obsolete capacities.
2. The second stage then began when the State Council asked to shut down unqualified mines out of line with related policies in Sep of 2006.

Mr Li stressed that 30,000 tonnes or less coalmines must be closed immediately and over 10,000 small coalmines would be shut down until the end of this year. He added that the closing campaign is expected to come to an end half a year ahead of schedule since it is previously planned to finish in the early half of 2008.

(Sourced from MySteel.net)

Baoshan Iron & Steel orders Steckel mill

Baoshan Iron & Steel Company Limited’s subsidiary Special Steel Branch of China has announced that it has awarded SMS Demag a contract for the supply of a Steckel mill for the rolling of stainless steel and high quality alloys. The mill is scheduled to go on stream in Shanghai at the end of 2009.

Special Steel Branch will use the mill to produce up to 1,300 mm wide steel strips and plates. The mill is rated for the rolling of stainless steel grades and special grades such as high temperature resistant alloys, nickel based and titanium alloys. The mill's capacity will be 282,000 tonnes per year of which 110,000 tonnes will be hot coils.

SMS Demag's supply will include the Steckel mill stand with Steckel furnaces, crop shear and coiler as well as the trimming shears and hot & cold plate levelers for processing of the plates. SMS Demag will also be responsible for the technological models for pass schedule calculation and for the integrated profile and flatness model of the Steckel mill and roughing mill as well as the complete automation system for the two levelers.

Depending on the properties of the material the design of the Steckel furnaces will allow the application of different operating modes for hot strip coiling. This will optimize the Steckel process and minimize loads acting on the rolled stock and mechanical equipment.

MMK seeks USD 1 billion through London IPO – Report

Interfax reported that Magnitogorsk Iron & Steel Works might sell shares to rise as much as USD 1 billion equal to the sum rose in an April initial public offering in London.

Interfax citing unidentified people in banking circles that Magnitogorsk plans to hire an investment bank to advice on a public offering.

Interfax however added that MMK has declined to comment on the report on it plans for share sale.

8 firms express interest to revive Bong Range iron ore deposits in Liberia

APA reported that Delta Mining, Rio, Vedanta Resource and BSC Resource are among the eight mining international mining companies that have expressed interest in operating the Bong Range iron ore deposit 80 kilometer north of Monrovia in Liberia, which was abandoned by the German Bong Mining Company during the civil war.

The program marking the formal unveiling of the expression of interest for the Bong Range iron ore deposit was in Monrovia before the representatives of the ministries of Finance, Labor, the Central Bank and National Investment Commission.

Dr Eugene Shannon lands, mines and energy minister of Liberia lauded the investors and stakeholders for expressing interest in extracting the Bong Range iron ore. He said the lack of job opportunities upcountry force rural dwellers to a mass exodus in coastal cities. He added that “This gives rise to overcrowding in these cities and the only way to curtail this phenomenon is when companies begin operations in several parts of the country.”

As per report, Bong Mining Company has resolved not to reopen the mine due to the massive infrastructural damage inflicted on the company during the 1990 war. Unconscionable fighters and civilians vandalized and destroyed the infrastructures, including workers’ living quarters, schools, hospitals and equipment.

Shenhua may build coal rail link from Mongolia

China Shenhua Energy announced that it might build a rail line to transport coal from Mongolia, if it is able to negotiate a new mining contract with Mongolia.

Mr Huang Qing a spokesman for Shenhua said that "Once we win the coal project in Mongolia we will consider building a rail link to transport the fuel here." But he declined to give a schedule for construction or state the size of the project.

Mr Qing said that Shenhua Energy expects to add 1.86 million kilowatts of power generation capacity in the second half tripling the new capacity added in the first six months of 2007. He added that the coal producer, which wants power generation to lead its future growth, added 600,000 kilowatts of capacity in the first half. The company had a total generation capacity of 11.96 million kilowatts at the end of last year. Shenhua Energy's coal output rose about 15% to 76.6 million tonnes in January to June 2007 and its power generation rose by 56% to 36 million MW.

Coal producers in China are increasing capacity to meet demand from power companies in the world's fastest growing major economy. Since 80% of China’s electricity is generated from burning coal, it is seeking additional sources of coal in Mongolia as well as Indonesia, Australia and Vietnam.

CFMEU challenges Australian coal industry on climate change

ABC news reported that the Construction, Forestry, Mining and Energy Union is challenging Australia's coal companies to take a stronger stance on climate change and ignore the political consequences.

Mr Tony Maher president of CFMEU while addressing a Minerals Council conference on the New South Wales central coast about the issue of global warming said that most companies support the union's positions on ratifying the Kyoto agreement and the need to set clean energy and emissions targets, but they are reluctant to speak out.

He added that "If the industry agrees with me that ratifying Kyoto would not cost one single job, then why do not they stand up and say so. If the industry agrees with me that we need clean energy targets and that the Government has failed to deliver them, then why do not they say so. It might be an election year but they should be prepared to speak up in their own interests."

Citic Pacific buys Pilbara iron ore property

It is reported that Hong Kong based Citic Pacific has bought a pastoral lease in north west Western Australia where it hopes to build an iron ore mine and port. It bought the lease for Mardie Station in the Pilbara from the Thompson family earlier this month. It is understood Citic paid between AUD 15 and AUD 20 million for the lease.

The 224,000 hectares lease is 100 kilometers south of Karratha and covers the proposed port at Cape Preston and the Balmoral iron ore deposit.

As per reports, Citic is planning to build a port, mine, pellet plant and accommodation village, but it is yet to receive the necessary amendments to a state agreement and receive government approval.

The company, however, has retained the station manager to continue running it as a pastoral business.

Pallinghurst withdraws ConsMin shares bid

It is reported that Pallinghurst Resources has withdrawn its on market order to acquire 11.35 million shares in Consolidated Minerals Ltd. Pallinghurst withdrew the offer on Thursday pointing to a softening equity market and a general decline in the shares prices of Australian and global mining companies as the reason.

However, Pallinghurst said its off market takeover of AUD 3.30 per share or AUD 752 million for manganese and nickel miner ConsMin would remain open until its scheduled close on September 1st 2007.

Pallinghurst is in a takeover tussle with iron ore miner Territory Resources Ltd for control of ConsMin. The takeover battle for ConsMin recently included the entrance of a third party, Ukrainian conglomerate Privat Group, which has taken a 13.5% stake in ConsMin.

Territory appoints Mr Allan Quadrio as new MD

Territory Resources Limited has appointed Mr Allan Quadrio former executive of Consolidated Minerals Limited as its new MD. Mr Quadrio will step down from his role as MD of Monarch Gold Mining Co to take up the post at Territory.

Mr Quadrio had resigned from his post at ConsMin in June 2007 due to his links with Mr Michael Kiernan executive chairman of Territory. Mr Quadrio and Mr Kiernan were part of the team that built ConsMin into a mid tier diversified miner.

Territory is battling a consortium led by Mr Brian Gilbertson former CEO of BHP Billiton Limited to takeover ConsMin.

Harsco expands operations in Mexico and Peru

It is reported that 2 contracts worth more than USD 15 in revenue will allow MultiServe a division of Wormleysburg based Harsco Corp to expand its steel operations in Peru and Mexico.

MultiServ will expand its material handling and transport services at three Ternium steel plants in Mexico and at the Gerdau owned Siderperu plant in Peru. Ternium is based in Luxembourg and Gerdau has headquarters in Brazil.

MultiServ is a mill-services company, handling everything from raw materials to recycling at metal manufacturers. Harsco is an industrial products and services company serving companies in the construction, steel production, energy and railway industries.

Siemens to build 500 electric freight locomotives in China

Siemens Transportation Systems announced that it would team up with its Chinese partner CSR Zhuzhou Electric Locomotive CO LTD to build 500 electric freight locomotives for Chinese railway and that a contract for the supply of components and worth over EUR 334 million has just been signed by Siemens and its Chinese partner.

Siemens said that the new locomotive represents the world’s most powerful series production locomotive. It will be designed with an output rating of 9.6 MW equal to the combined performance of 35 trucks and put about 50% more power on the rails than the most powerful locomotives in Central Europe at present. With six axles and weighing up to 150 tones, resulting in an axle load of 25 tonnes this freight locomotive will be able to operate at a top speed of 120 kilometer per hour. The first units are due to enter service at the beginning of 2009.

The project planning for the drive system of the Chinese freight locomotives will be performed in Germany at the Siemens locations in Erlangen and Nuremberg, where the most important traction components will also be manufactured. The complete locomotives are to be built at the partner Zhuzhou Electric’s plant at Zhuzhou in China.

Mr Jorn F Sens executive VP of Siemens Transportation Systems said that “This is the third freight locomotive order we have received from China since 1997, making us the most successful foreign supplier in this sector. Just the other day, only two locomotives, which we had recently delivered, were able to haul a 20,000 tonne train instead of the four units previously required. All this proves that our products can compete successfully in this hotly contested market.”

The Transportation Systems Group of Siemens AG is one of the leading international suppliers to the railway industry. As single source supplier and system integrator, the Group combines in its business segments Automation & Power, Rolling Stock, Turnkey Systems and Integrated Services all the expertise necessary to cover the spectrum from signaling and control systems to traction power supplies, as well as rolling stock for mass transit, regional and main line services.

Garphyttan spring wire plant starts at Suzhou in China

It is reported that Swedish automobile spring wire maker Garphyttan Wire, which is part of Sweden based major automobile part maker Haldex Group, launched new Chinese plant in Suzhou to serve transplants of European and US automakers.

Kobe Steel started the sample shipment of spring wire rod to the plant and will supply the material as early as official approval.