SAIL DSP posts record performance for H1 of 2007-08

Steel Authority of India Limited’s Durgapur Steel Plant has reported an all time best half yearly performance during April to September 2007.

DSP’s production of hot metal during the first half of the current fiscal stood at 1.09 million tonnes, crude steel at 0.97 million tonnes and saleable steel at 0.85 million tonnes, thereby representing a YoY growth of 24.7%, 17.9% and 8.6% respectively as compared to April to September 2006.

According to a press release, a strategic initiative has been taken to produce value added steel for higher realizations. In September 2007, DSP produced 45,707 tonnes of value added steel, surpassing the previous monthly best production of 44,032 tonnes.

DSP has also taken up the task of forging Box N wagon axles in September 2007 on a regular basis at the behest of Indian Railways after a new hammer was commissioned in the axle plant to facilitate the process.

Indian major ports post 14% YoY growth in H1 of 2007-08

India’s major ports during April to September 2007 period recorded a 14%YoY growth in cargo handling at 244 million tonnes as compared to April to September 2006 period but they missed the Shipping Ministry’s target of 252 million tonnes.

According to tentative numbers released by the Indian Ports Association
1. All ports, except Mormugao, handled more cargo in the first half of the current year than in the same period last year
2. Four ports Chennai, New Mangalore, JNPT and Kandla achieved more than the target
3. In a fight for the top spot, Kandla edged Visakhapatnam port by just 78 tonnes. Kandla reported a 29.69% YoY growth in cargo handling in the first six months at 30.691 million tonnes and Visakhapatnam was second with a 16.93% growth at 30.613 million tonnes.

The details are as under

In million tonnes
(Tentative figures released by the Indian Port Association)

TATA Steel and Corus begin synergy in sourcing of raw materials

It is reported that, as part of the integration process, TATA Steel and Corus have started joint sourcing and purchase of materials, including ore, coal and refractories and have also decided to jointly explore new iron ore sources in Africa, Australia and Brazil.

The report cited Mr Philippe Varin CEO of Corus as saying that the integration process is aimed at achieving the USD 450 million synergy and 20 separate groups with representatives from both sides are working on it to identify best practices from both the companies. Mr Varin said that the integration process is currently focused on areas such as manufacturing, purchasing, performance and finances.

Mr Varin pointed out that integration would be a gradual process and he would not be able to set a time frame now.

Mr Varin said that the integration is mostly being done internally but international consultant Accenture has been appointed to look at the performance issues.

TATA Steel is 80% self sufficient in raw materials and one of the main objectives of integration process is to achieve self sufficiency in raw materials for Corus.

SCCL to open 10 new coalmines by 2007-08 end

It is reported that Singareni Collieries Company Limited will be opening 10 new open cast mines during the remaining four months of the current fiscal. SCCL has already opened Srirampur 1 mine earlier this year. Out of the 10 new mines that will be opened up, three will be expansion projects and the balance 7 will be new coalmines.

The new mines that are targeted to be opened are
1. Srirampur 2
2. Koyagundum 2
3. Kunavaram
4. Dorli 1
5. Dorli 2
6. Khairagura
7. Abbapur

The expansion projects are
1. Jalagam Vengal Rao 1
2. Manuguru 2
3. Ramagundam 1

The report cited a SCCL official as saying that “Opening of the new mines will enable the company to increase the per capita productivity further through the introduction of more efficient mining technology and increased mechanization.”

The official added that “While the target output per man shift for 2007-08 was set at 2.26 tonnes, the company has registered an OMS of 2.44 tonnes during the first eight months which is 108% of the targeted level.”

SCCL currently operates 55 mines spread over four districts of Andhra Pradesh and has a workforce of around 78,000. Out of this, 13 are opencast mines and 42 are underground mines. With the addition of 11 new mines during the current year the total number of operational mines will go up to 66.

Orissa an ideal state for investment - TATA Steel

Ranchi Express reported that Mr B Muthuraman MD of TATA Steel, pleased with the progress of its Kalinga Nagar project in Orissa especially with the approach of the state government towards industrial development, has declared Orissa as an ideal destination for investment growth.

The report cited Mr Muthuraman as saying that "Of the 3 states of Jharkhand, Orissa and Chattisgarh, where we have announced Greenfield projects, Orissa a doing very well in terms of industrial development. I see the state develop immensely in the next few years."

TATA Steel is setting up a 6 million tonnes Greenfield project in Orissa.

POSCO praises WB model of industrialization

BS reported that POSCO, which proposes to set up a 12 million tonne a year Greenfield steel plant near Paradip in Orissa at an investment of INR 51,000 crore, has favored the West Bengal pattern of strong state backing for project implementation.

The report cited Mr Chang ho Kwag director of POSCO Research Institute as saying that “The left front government is pushing through various projects in West Bengal. We need to learn from them.”

Mr Kwag added that though the Orissa government has signed memorandum of understanding with 46 steel companies, only 26 small and medium scale projects have started partial production. Most of the mega projects are not making any headway. To expedite project implementation, 1 stop mechanism for mega projects may be put in place by the state government.”

Mr Kwag said that apart from accelerating the development of physical infrastructure in the form of roads, ports and other related infrastructure, the state government need to develop social infrastructure as well. He said “Educating the people about the benefits of the project is very important for materialization of the projects.”

Mr Kwag added that the demand for coking coal was likely to grow at a faster pace from the eastern states as a number of steel majors were setting up their plants in this part of India. Orissa with a long coastline was likely to see a huge surge in coal imports for upcoming units.”

Emirates Techno Castings to set up manufacturing unit in India

It is reported that UAE based steel castings manufacturer Emirates Techno Castings FZE is in the process of evaluating the possibility of setting up of a manufacturing base in India that could potentially entail investment of about INR 200 crore.

Mr Radhakrishna Kasani VP of sales & procurement of Emirates Techno Castings said that “A decision to go ahead with the plant and the final location would be taken very soon and we expect to announce this and begin work on the plant by January 2008. We believe that India is at a point where significant investments are likely in the areas of oil and gas and other related areas where the company has a big market potential. And a manufacturing base will help serve it better.”

Emirates Techno, which has a JV sourcing arrangement with a Coimbatore based company, is evaluating sites in Visakhapatnam and Coimbatore.

Emirates Techno has production capacity of 24,000 tonnes of steel castings and plans to step this up to 36,000 tonnes by 2008. To this, it is planning to add an Indian manufacturing base that would further step up capacity.

Indian casting exports hit by pig iron prices, stronger rupee and freight hikes

It is reported that Indian castings exporters are facing rising prices and supply constraints with regard to supply of their basic raw material foundry grade pig iron.

Mr Rakesh Shah chairman of Engineering Export Promotion Council while talking to newspersons at the sidelines of an interactive session on Post Foreign Trade Policy recently said that for Indian castings manufacturer & exporters, already reeling under pressure of stronger rupee and increased freight rates, the hike in pig iron prices has come as another big blow.

According to Mr RP Sehgal, the region chairman of EEPC and MD of Carnation Industries Ltd, pig iron prices in the last six months have shot up by 16.41% to INR 18,335 per tonne from INR 15,750 per tonne in May.

Mr Sehgal said that approximately 200.000 tons of castings are exported annually, and exporters sourcing from private producers are becoming uncompetitive and losing out in the US, the main export destination for sanitary castings.

SBI Caps to study viability of power distribution venture for DVC

BL reported that Damodar Valley Corporation is planning to appoint SBI caps to study the commercial viability of the proposed JV with private parties for retail power distribution in Dhanbad, Bokaro, Hazaribagh and Giridih in Jharkhand.

An official of Damodar Valley Corporation said that “We have already appointed the Central Electricity Authority for technical evaluation of the projects and are in the process of appointing SBI caps to study the commercial aspect. This is expected to be through in the next few days. Based on the reports submitted by CEA and SBI caps, we will prepare the final notice inviting tenders for joint venture participation from TATA Power, Torrent and CESC.”

The time frame for submission of the report is yet to be firmed up. On possibility of forming more than one JV, sources said that all such details would be finalized after techno economic evaluation of the circles.

As per report, TATA Power, Torrent Power and CESC have already expressed interest to partner Damodar Valley Corporation in the proposed distribution foray.

Opportunities opened up before Damodar Valley Corporation to enter the retail distribution earlier this year when JSEB announced its plan to entrust the responsibility of retail distribution to Damodar Valley Corporation, owing to technical as well as financial constraints. In a bid to bypass the legal constraints, DVC opted for the JV route to enter the business.

ADB and IFC to fund TATA Power's Mundra UMPP - Report

TATA Power is reported to have finalized agreements with a consortium of external lending agencies and institutions to fund the foreign currency denominated debt of the 4,000 MW Mundra ultra mega power project in Kachh district of Gujarat.

As per report, the multilateral agencies, which have agreed to fund the foreign currency part of Mundra UMPP's debt, are the Asian Development Bank and the International Finance Corporation. Other external lending agencies of the project are K-Exim/KEIC and JBIC.

The report mentioned that while the K-EXIM/KEIC and JBIC will open a foreign currency denominated credit line of USD 1 billion to USD 1.5 billion, ADB and IFC will chip in with a total debt of USD 0.7 billion.

The report added that TATA Power is talking to various domestic banks and financial institutes to raise the remaining rupee denominated loan to the tune of USD 1.5 billion to USD 2 billion.

As per report, TATA Power has engaged in SBI caps as the lead arrangers of funds for the proposed project.

Kolkata Port calls for expediting Eastern freight corridor

Exim News recently reported that Kolkata Port Trust has urged the immediate beginning of work on the dedicated rail freight corridor on the eastern sector.

The report cited Dr AK Chanda chairman of the Kolkata Port Trust while addressing a logistics seminar recently as saying that the corridor should be extended to Kolkata Haldia or even to Orissa instead of ending it at Sonenagar.

Dr Chanda also called for the rail freight corridor to be built to handle double stack containers such as on the Western corridor failing which the project would be 40% costlier. He said that the Railways handled 28% of the containerized freight traffic on the West Coast and only 4% on the East Coast. He pointed out that the West coast ports received more importance presumably because they handled more high value items whereas East Coast ports handled more low value high volume traffic.

Sical Logistics bags the "Best Bulk Logistics Provider" award

Sical Logistics Limited recently announced that it was awarded the Best Logistics Provider in Bulk Logistics at the Express, Logistics and Supply Chain Awards, held in Mumbai on September 28th 2007.

The award was presented by Mr Nigel Goode director of the Express Logistics and Supply Chain Conclave and also the director sales of Maersk. The award was received by Mr Sudhir S Rangnekar MD & CEO of Sical.

The awards ceremony was part of the Express, Logistics and Supply Chain Conclave held on 'Leveraging the unique opportunities and challenges in the Indian market' in Mumbai from September 28th to 29th 2007.

The Express, Logistics and Supply Chain awards are annual awards established in 2007 and aim to recognize and showcase leading companies in the logistics, supply chain and manufacturing domains. The participating companies were reviewed by an advisory council consisting of 22 jury members headed by Mr Goode. The research partner for the awards was A C Nielsen. Criteria such as excellence in customer service, range of services, value added offerings and size of network were assessed for each participant.

Mr Sudhir S Rangnekar MD and Group CEO of the Company said, "We are honored to receive the award for the Best Logistics Provider in Bulk Logistics. For more than 52 years, Sical has provided world class services to the Indian bulk logistics sector. Sical continues to be the largest bulk cargo handling service provider in the sub-continent by volume, moving 22 million tonnes of cargo annually. Sical is also one of the leading logistics solutions providers for container and offshore logistics. We remain committed to excellence and will continue to deliver high quality, innovative customer focused solutions."

The bulk logistics division in the Company comprises of port and inland logistics. Port logistics consists of services like port handling, stevedoring, customhouse agency, and shipping. Inland logistics consists of the services of trucking and warehousing. The company has operations across all the major ports of Chennai, Tuticorin, Vishakhapatnam, Nhavasheva/Mumbai, Paradip, Goa, Mangalore and Ennore.

Foundation stone laid for gas based power plant at Hazira

It is reported that Mr Narendra Modi chief minister of Gujarat has recently laid the foundation stone for Gujarat State Energy Generation's 350 MW Phase I combined cycle gas based power plant at village Mora near Hazira in Surat.

The project to be spread over 27 acres of land is expected to be ready within the next 27 months for an estimated project cost of INR 1,050 crore.

The proposed unit will comprise 1 gas turbine, 1 heat recovery steam generator and 1 steam turbine which will take up the total installed capacity of the company from 156.1 MW to 506.1 MW.

For this expansion, GSEG had floated tenders in November 2006. The company evaluated the tenders and issued the letter of intent to Bharat Heavy Electricals Limited.

Fairfield Pressings on expansion mode

It is reported that pressed metal sheet supplier Fairfield Pressings Private Limited has embarked on an expansion plan at its facility at MIDC Ranjangaon in Maharashtra, which was set up in 2001.

Mr VM Jagtap MD of Fairfield Pressing said that “ It has currently an industrial land of 1 hectare with 60% of the land as covered area. Currently, the facility is constructed in about 40,000 square feet with a pre engineering structure with another 10,000 square feet to be built shortly.”

Mr Jagtap said that it has laid out the large bed press line, four 400 tonne British clearing mechanical presses and also 250 tonne, 160 tonne, 150 tonne and 100 tonne mechanical and hydraulic presses. He said it has also procured 800 tonne and 500 tonne mechanical presses from the US and Europe for installing its second press line. He informed that the company has invested INR 2 crore in procuring these presses.

Mr Jagtap said that it is also importing the 1,250 tonne, one 800 tonne and two 500 tonne press from Korea, which would complete the press work in single line flow process and would utilize robotics for automatic material transfer between the line presses.

Mr Jagtap said talks are also on with a few US based companies to provide the latest trends in large bed sheet metal component manufacturing process with robotic welding facility to supply the complete module and have buyback arrangement for their European customers.

He added that “Now it is concentrating more on the automobile segment and not on the white goods. The company is also in talks with TATA Motors car division. It is also supplying complete module for Safari and would be handling the engine components for Sumo, Vectra and the 207 family.”

Moody assigns Baa2 rating to L&T

It is reported that Moody's Investors Service has assigned an issuer rating of Baa2 to Larsen & Toubro Ltd with a stable outlook.

The above rating is not specific to any debt issue.

The issuer rating is one notch above India's sovereign foreign currency rating.

European steel industry preparing AD complaint against Chinese imports

It is reported that the European steel industry is preparing an anti dumping complaint with the EU against Chinese steel imports.

Mr Dieter Ameling head of the German steel industry association Wirtschaftsvereinigung Stahl while referring to EUROFER's attempt to acquire information proving China is exporting steel to Europe at prices below production costs told Reuters that "We need to meticulously prepare the case and by the end of October we should be able to do so.”

He expressed confidence that the European Commission would have to act so long as the data collected by European steel makers supports their case. He said "So far it is very difficult to prove damages have arisen, but the threat of damages suffices.”

Mr Ameling said he expects China to export 10 million tonnes of steel into the EU in 2007, twice as much as last year.

Mr Wolfgang Leese CEO of Salzgitter AG ahead of the annual conference of the International Iron and Steel Institute in Berlin said that “His company is supporting the complaint of European industry association Eurofer as he is sure that in four product categories stainless steel, flat bar steel, wires and heavy plates Chinese suppliers operate with dumping prices on the European market.” He added that Chinese exports to Europe grew four fold over the past two years.

Mr Karl Ulrich Koehler member of ThyssenKrupp AG's management board and head of its steel division said that “He expects a complaint to be decided on six to nine months after being filed. Because of long delivery times of steel products to Europe, the mere announcement of the complaint will have a significant effect on the market.”

Mr Lee of POSCO elected as chairman of IISI

It is reported that Mr Lee Ku-taek CEO of POSCO was elected chairman of the International Iron & Steel Institute at its 41st annual board of directors meeting held Sunday in Germany. Prior to this Mr Lee served as VP of IISI.

Mr John Surma CEO of US Steel and the outgoing chairman of IISI congratulated Mr Lee.

Mr Lee said “I am grateful to be given the opportunity to head the world's top steel organization like IISI. I will strive to establish cooperative ties among member firms and help the industry think of ways to strengthen new areas for steel demand.''

Founded in 1967, IISI members produce around 70% of the world's steel.

CISA terms AD actions over Chinese steel imports as unreasonable

Xinhua cited Mr Zhang Xiaogang chairman of China Iron and Steel Association as saying that the western anger over surging Chinese steel imports is unreasonable and runs against the concept of globalization. Mr Zhang, also president of Anshan Iron and Steel Group Corporation, in an interview with Xinhua told that some western countries have been using double standards when it comes to trade and competition in the steel industry.

Mr Zhang said that the rising steel production in China has been fueled by the rapid economic development in China as well as global economic recovery in recent years. He said “The world's steel production rose by 8.8% last year and China's steel production, even though still ranks the highest in the world, has been growing slower than some countries like India. And China's steel production growth is expected to fall below 10% next year which is largely attributed to the recent national policies to curb the overheating of Chinese steel industry.”

Mr Zhang said that “The rise in Chinese steel exports to Europe is mainly due to the economic growth in the region. And European companies, including the German car producer BMW, have been happy to use Chinese steel products, the quality of which is improving very fast. Meanwhile, Chinese steel did not come to Europe at the cost of local steel producer. Nearly all European steel manufacturers have steadily seen their profits rising in recent years.”

Mr Zhang advised that “In a time of globalization, everything should be done to promote fair trade and competition. Spending time on unnecessary spat is not helping.”

ArcelorMittal investing USD 2 billion in European facilities in 2007

It is reported that ArcelorMittal plans to invest USD 1.3 billion annually in its European flat bar steel production plants until 2012.

Mr Michel Wurth member of the ArcelorMittal’s management board and head of European flat steel production during a press conference in Berlin said that steel maker this year has invested USD 2 billion in its European production, comprising of USD 1.3 billion in its flat production, USD 400 million in its long steel production, USD 200 million in stainless steel and USD 100 million in distribution and services.

He also said that in addition, EUR 200 million is to be invested in the modernization and expansion of its production plants in the German cities of Eisenhuettenstadt and Bremen.

As per report, in Eisenhuettenstadt, a new hot dip galvanizing line will be built with a capacity of 400,000 tons by 2009. The line will be dedicated to automotive products targeting Central and Eastern European markets. In Bremen, one of two blast furnaces will be upgraded, bringing the plant's capacity to 4 million tons of hot metal at the end of 2008.

ArcelorMittal plans to invest USD 35 billion in organic growth until 2012, excluding acquisitions and green field projects.

JFE to expand pipe exports for energy projects

Nikkei reported that Japan's JFE Steel Corp is taking steps to expand overseas sales of steel products used for resource development, transportation and other energy industry purposes. JFE Steel will promote sales of products like seamless pipes, used in natural gas and oil fields and line pipes made from thin steel plate, used on ocean based oil platforms.

As per report the unit of JFE Holdings Inc has set up a special team to develop business in this area and hopes to double exports to 2 million tonnes by fiscal year 2015.

JFE plans to invest a total of JPY 25 billion (USD 215 million) at its Chita Works to boost production capacity by 30% for small seamless pipes, 20% for medium seamless pipes and 10% for steel plate.

Worldwide spending on energy resource development has been invigorated by surging energy demand, especially in emerging economies and JFE Steel anticipates a growing need for high strength steel materials for use in the harsh environments where much of the exploration and production is taking place.

JFE Steel plans to make steel products for the energy field a third main business behind steel sheet for automobiles and plate for ships.

2008 iron ore price talks yet to start – CVRD

Platts reported that, during the official launch of the USD 3.6 billion steel slab plant JV between Baosteel and CVRD, an executive with Brazil's CVRD told Platts that contract negotiations over iron ore prices for 2008 have not yet begun. The executive said that "It is too early to start talking about that right now."

Mr Roger Agnelli president & CEO of CVRD said that global iron ore exporters are already producing at top capacity to supply China with iron. Mr Agnelli noted that CVRD's iron ore shipments to China have nearly quintupled over the last half decade, to 100 million tonnes from around 22 million tonnes five years ago.

However Mr Agnelli declined to address iron ore contract pricing for 2008. Mr Agnelli said that “It is too early."

The 2007 price negotiations between Baosteel and CVRD led to a 9.5%increase that set the pattern for other major steelmakers. China's Baosteel had represented the other Chinese mills in late December last year. The fairly swift settlement between CVRD and Baosteel represented a departure because contract prices for global iron ore pacts had historically been set by the outcome of negotiations between the three major iron miners and the Japanese integrated steel mills.

Thermal coal price to set new record in 2008

Reuters reported that contract prices for thermal coal between Australian producers and Japanese utilities are seen rising by more than 15% in 2008 due to reduced Chinese supplies and Australia's port constraints. Prices for Asian thermal coal may jump to a record high of USD 64 a tonne in the 2008 Japanese fiscal year against 2007 agreed price of USD 55.65. Estimates ranged from USD 59 to USD 70 a tonne.

Analysts said China's continued withdrawal from the export market, Australia's ongoing port and rail constraints as well as sporadic supply disruptions in Indonesia due to wet weather are expected to lead to a supply shortage next year.

Asian demand, which analysts have forecast to grow about 4% in 2008 compared with 3 % 2007 will also underpin the surge in prices. As key producers Indonesia and Australia struggle to match booming demand, analysts said coal supplies would significantly tighten next year. They have forecast supply deficits to range between 10 million and 33 million tonnes, compared with an estimated shortfall of 8 million tonnes to 10 million tonnes in 2007.

Demand from India, which has planned to add many coal fired power plants to fuel its rapid economic expansion, will further strain supplies.

Forecasts for Asia contract price for thermal coal in 2008

In USD

Forecasts for Asia contract price for thermal coal in 2008

In USD

Salzgitter to reach its sales of EUR 13 to 15 billion by 2010

It is reported that Salzgitter AG is expecting to reach its sales target of EUR 13 billion to EUR 15 billion by 2010 as against EUR 10 billion in 2007.

Mr Wolfgang Leese CEO of Salzgitter while Speaking at a press conference in Berlin ahead of the annual conference of the International Iron and Steel Institute stated that more precisely the company's full year pretax profit guidance of significantly higher than EUR 1 billion. He said that its third quarter followed the positive trend seen during the first half of 2007, during which Salzgitter posted pretax profit of EUR 663.6 million.

Mr Leese expects the industry to grow by annually 4% to 5%, in particular if the current development in emerging markets such as China, India and Russia continues. He said “2008 will be another good year for steel. However, that early indicators suggest sharp price increases in raw materials such as iron ore and coal could hit the industry hard next year.”

Mr Leese said Salzgitter could in response increase its prices by EUR 30 per tonne to EUR 50 per tonnes.

Scientists develop ultra strong nano based plastic

According to a study published in Science magazine Scientists have developed a transparent new plastic as strong as steel and as thin as a sheet of paper. The plastic could be used to reduce the energy required to separate gasses in chemical factories, improve micro technology such as microchips or biomedical sensors and even one day produce lighter, stronger armor for soldiers or police and their vehicles.

Mr Nicholas Kotov lead researcher said it is made out of clay and non toxic glue similar to that used in school classrooms, the composite plastic is biodegradable and requires very little energy to produce. He said it's as green as you can imagine and that the material is also quite cheap to produce.

Mr Kotov managed to do it by mimicking the brick and mortar molecular structure found in seashells. His engineering team at the University of Michigan builds a robot, which stacks the nano sheets like bricks in an alternating pattern and uses a glue like polymer to create cooperative hydrogen bonds between the layers that can easily reform in another place if the bond is broken. It takes a few hours to build up the 300 layers needed to make a thin sheet of the plastic as the robot's arm dips in an out of vials of glue and a dispersion of clay nano sheets.

Mr Kotov said "When you have a brick and mortar structure, any cracks are blunted by each interface. We have demonstrated that one can achieve almost ideal transfer of stress between nano sheets and a polymer matrix."

Mr Kotov has already begun developing practical applications for the composite plastic, which could become commercialized within a year or two. He added that "We're still at the exploratory stage but the machine is now being built in our lab to build piece as big as one meter by one meter."

JFE, Mitsui and Erdos SiMn JV to double output

JFE Steel, Mitsui & Co and Erdos Electrical Power & Metallurgical Company announced that their silicomanganese making Chinese JV Inner Mongolia Erdos EJM Manganese Alloys will double the output capacity to annual 150,000 tonnes by end of 2008. The investment value is apparently around USD 15 million.

JFE Steel will purchase around 70,000 tonnes per year of silicomanganese from the JV to stabilize the procurement.

Mitsui & Co supports the JV in sales and raw materials supply while Erdos Electrical Power & Metallurgical expands the integrated operation from coal mine to ferroalloy.

Voestalpine may build a steel plant in Romania - Report

The Austrian daily Der Standard citing unnamed sources close to the company's supervisory board reported that Voestalpine AG could reach a decision on whether to build a major new steel plant in Romania as early as the end of this month.

Der Standard reported that so called “Edelweiss” project remains at a very, very early stage and even the specific type of steel works have not yet been specified.

As per report, the proposed project's first stage, which in itself would likely involve investments of EUR 500 million to EUR 600 million, was apparently discussed at last week's meeting of Voestalpine's supervisory board.

According to the report the ability to transport raw materials cheaply on the Danube River, the proximity to auto production sites and the increasing cost of environmental regulations in Austria are the principal reasons for Voestalpine's interest in building a major steel plant in Romania.

Rebar shortage may hurt 9th Plan projects in Malaysia

According to Master Builders Association Malaysia, ninth Malaysia Plan projects may be disrupted if the government does not act promptly to solve steel bar shortage in the domestic market. It said that if the shortage were not addressed soon, contractors would suffer, as they would have to absorb the additional cost imposed on steel bars.

Mr Patrick Wong president of Master Builders Association Malaysia said that "The 20% hike in the ceiling price of steel bars in April this year clearly did not solve the contractors' problem of having to pay above the government-fixed price for steel."

He said that without consistent steel supply, project delivery would definitely be hampered, he said, adding that more than 2,000 developers and 60,000 contractors would incur losses if the supply situation did not improve. He added that "This unresolved dilemma of steel bars is a stumbling block that must be tackled earnestly if the industry is to move forward."

Mr Patrick said that "The problem is not only prevalent in the central region but also in Melaka, Johor, Penang, Sabah and Sarawak. He said that "As the 9th Malaysia plan goes into higher gear in the first quarter of next year, it is important that the supply of building materials such as steel bars and cement is consistent and prices are stable."

He urged the government to impose an immediate ban on steel bar and billet exports to ensure adequate supply in the domestic market. He added that steel mills should cater to the domestic market as many ninth plan projects are being implemented and would require constant supply. The Domestic Trade and Consumer Affairs Ministry must effectively take action against millers unwilling to supply steel bars and pro actively monitor and control steel bar supply.

High level of pollution reported at Highveld Vanchem plant in SA

It is reported that a swoop by environmental inspectors on Highveld Steel and Vanadium Corporation's Vanchem plant outside Witbank in Mpumalanga in South Africa has uncovered shocking levels of air, ground and water pollution.

Environmental management inspectors, better known as the Green Scorpions, carried out a compliance inspection at the plant at the end of August this year.

Department of Environmental Affairs in a statement said that "A series of non compliances with environmental legislation and permits were revealed. These included excessive emissions of sulphur dioxide, with between 40 tonnes and 60 tonnes of the gaseous compound one of the primary causes of acid rain emitted by the plant every day.”

Scharrig acquires 49.998% stake in Koornfontein coal mine

Schamin recently announced the acquisition of 49.998% of the Koornfontein coalmine in Mpumalanga for ZAR 150 million from Investec Bank and Coronation Capital. The share purchase is subject to inter alia JSE and regulatory approvals and is expected to become unconditional during November 2007.

The remaining 50.002% of equity is owned by a consortium led by Siyanda Resources.

The mine is a large underground operation adjacent to Eskom’s Komati power station and has good infrastructure and accessibility to rail transport. The colliery produces about 4 million tonnes of coal per year of which about 1.5 million tonnes is exported annually under entitlement through Richards Bay Coal Terminal. Additionally coal is supplied directly to Eskom for electricity generation.

In line with the agreement contained in the Merafe Coal joint venture between Merafe Resources and Scharrig, 50% of the purchased stake is being offered to Merafe Resources on a first option basis.

Mr Robin Berry COO of Scharrig Mining said that "We want to optimize our exposure to high quality operations to capitalize on the continued strong demand for coal and mining services. This shareholding will be a valuable addition and synergistic fit to our recently established coal mining ventures. It significantly enhances the potential of our coal resources."

China reports decrease of deaths in coalmine accidents

According to the China's top work safety watchdog, China saw the fatalities of coalmine accidents per million tonnes of coal produced in 2006 drop by 60% from that of 2001. Mr Wang Xianzheng deputy director of the State Administration of Work Safety about 5.07 people were killed on average for every million tonnes of coal mined in 2001 and the figure was reduced to 2.04 in 2006.

China reported a total coal output of more than 2.3 billion tons last year, with 4,746 people killed in mine accidents down by 20.1% YoY from the previous year. In 2001, there were a total of 2,384 coalmine accidents, which killed 6,078 people.

Earlier reports said that a total of 1,066 coalmine accidents took place in the first half of this year, causing 1,792 deaths. The figures were respectively 18.5% and 14.3% lower than those in the same period of last year. Mr Wang said that "The coal mine accidents have kept decreasing since 2002."

In recent years, mining security has remained one of the top concerns of the Chinese government, which has imposed stricter supervision and tougher penalties to restrain illegal operations. Over the last two years, China has closed more than 9,000 small mines and will shut another 1,000 by the end of 2007.

Territory Resources makes first iron ore shipment to China

AAP reported that iron ore miner Territory Resources Limited has made its first shipment from its Frances Creek project through the Port of Darwin, by dispatching 67,500 tonnes of iron ore to China.

Mr Michael Kiernan chairman of Territory said that achieving extra tonnage on the first shipment of ore was testament to team effort and the Northern Territory's proactive investment in resources infrastructure.

Mr Kiernan said that the next shipment of iron ore is on track to depart Darwin at the end of this month and he expects to ship up to another 200,000 tonnes of ore from Darwin Port to China before the end of 2007.

Territory has invested USD 10 million in unloading, storage and conveyor facilities, with capacity to store some 250,000 tonnes of iron ore at the Darwin Port. Mr Kiernan said that "It is our view that the Darwin Port will become a growth port for Australia, being the closest mainland port to China. Without a port and rail, Territory does not have a project."

Taiwan utilities issue long term coal purchase tenders

Reuters reported that two Taiwanese utilities Taiwan Power Co and Ho Ping Power Company have issued coal tenders ranging from 5 years to 10 years, in a move to lock in supplies in an increasingly competitive market. The duration, above the traditional four to six years, highlights growing concerns among buyers that the current supply squeeze in Pacific coal market could continue well into the next decade.

The two companies issued the tenders to buy thermal coal from Australian, Indonesian and Chinese suppliers, producers. The deadline for submitting bids to the Taipower tender is October 16th 2007, while the Ho Ping tender closes in the week of October 8th 2007. As per report, producers offering the most competitive price for the first year will be awarded the tender. Prices for the following years would largely be based on the annual price settlements between Australian producers and Japanese utilities.

Taipower issued a tender ranging from six to ten years, seeking 500,000 tonnes of thermal coal per year beginning in 2008. The tender was for bituminous coal with minimum calorific value of 5,500 kcal per kilogram on a gross as received basis, a maximum of 1.1% ash and not more than 10% sulphur, producers invited to participate in the tender.

Ho Ping Power, partly owned by Hong Kong's CLP Holdings is also in the market seeking long term deliveries for five years, beginning from April 2008 to March 2013. The utility is also seeking 500,000 tonnes of coal a year.

Chinese coke export to different countries in January to August 2007

China coke export to different countries in January to August 2007 totaled 9.823 million tonnes.

China exported coke to 30 countries during January to August 2007. The details are as under

(In tonnes)
(Sourced from MySteel.net)

ThyssenKrupp to expand Danville facility

ThyssenKrupp has announced that it will install a new machining line, creating a major expansion at the company in Danville.

The released said the state of the art equipment represents a USD 40 million investment in Danville and the retention of 129 existing jobs at ThyssenKrupp’s crankshaft division.

The new line will be used to produce a wide range of heavy duty crankshafts used in the United States’ over the road truck market.

Lundin plans zinc mine expansions in Portugal and Sweden

It is reported that Lundin Mining is planning a massive expansion of zinc production in response to what the Vancouver based company perceives as a continuing bull market for the metal.

Mr Karl Axel Waplan president & CEO of Lundin Mining said that Lundin perceives a long and steady increase in global demand for zinc, but does not see a corresponding increase in production.

As a consequence, the company's board of directors has approved spending USD 287 million for a major expansion of the Neves Corvo mine in Portugal and the Zinkgruvan mine in Sweden.

SABIC & Qatar Steel extend finalization of Guelb el Aouj iron ore project

Sphere Investments Limited has announced that it has granted SABIC and Qatar Steel a one month extension to the 31st of October 2007 to finalize the acquisition of a 49.9% interest in the Guelb el Aouj iron ore project in Mauritania as disclosed in Sphere’s ASX announcement dated July 31st 2007. The extension has been granted to allow for a delay in the SABIC Board approval process.

Qatar Steel has advised that its board approval has been given conditional upon SABIC’s involvement in the project.

SABIC advised that they were unable to secure the required board approval by the due date of September 30th 2007 specified in the MoU and requested an extension. The reason given by SABIC for not yet being in a position to secure their board approval was that, based on their financial assumptions for the project, the proposed investment did not meet the 18% return on investment normally applied to their industrial projects.

SABIC confirmed its desire to continue their involvement in the project, and requested additional time to review their financial analysis and key project assumptions, including their long term DR pellet price assumption.

Mr Alexander Burns MD of Sphere’s said “Both SABIC and Qatar Steel have communicated their desire to continue their involvement in the project provided their internal hurdles can be met, and as such we have agreed to provide this short extension to enable SABIC to obtain Board approval.”

Ipsco Steel commissions vacuum degasser at Montpelier

It is reported that Core Furnace Systems has completed a successful start up for the 160 ton, twin tank vacuum degasser it designed and installed at Ipsco Inc's flat rolling mini mill at Montpelier in Inidiana in US.

Ipsco, which produced plate products for various markets, will use the degasser to achieve lower hydrogen contents in its steel following the ladle metallurgy stage. According to Core Furnace the system is also capable of decarburization and sulfur and oxygen reduction.

Core Furnace added that the degasser's main features are a steam generating plant; a hybrid arrangement of steam jet ejectors and liquid ring pumps in line vacuum filtration and vacuum tanks mounted on transfer cars. Core Furnace also supplied the degasser's advanced process control system.

CAS SS output in 2007 seen at 176,000 tonnes

According to Mr Roberto Marzorati deputy chairman of Cogne Acciai, the output of Italian stainless steel products maker Cogne Acciai Speciali will total 176,000 tonnes in 2007 as compared to 174,000 tonnes in 2006.

Mr Marzorati added that the company plans to reduce its production for October 22nd 2007 to December 31st 2007, Mr Marzorati said that the increase of the prices of nickel provoked a decrease in the sales of steel. The financial uncertainty of the US market also caused problems to the steel producers.

Marzoratti said Cogne Acciai turnover rose by 25.6% YoY in 2006 to EUR 536 million and it sees a turnover increase by 38.9% YoY on the year in 2007 to EUR 745 million.

Mr Marzorati added that CAS envisages a major growth in 2008.

Consol Energy cuts yearly guidance after reduced output in Q3

Consol Energy Inc has updated its coal production guidance. It has reported production of 14.5 million tons for the July to September 2007 quarter as compared with the production guidance range of 15.8 million to 17.8 million tonnes given in July 007.

Consol Energy said the production revision for the quarter was due mainly to adverse geological conditions at McElroy Mine and Mine 84, as well as the continued outage at the Buchanan Mine.

Consol Energy presently expects production in the range of 16.5 million and 18.5 million tonnes for its fourth quarter ending December 2007 as compared to the previous guidance of 16.8 million to 18.8 million tonnes. Its full year production is currently expected to be in the range of 65.2 million and 67.2 million tonnes as compared to the prior guidance of 66.9 million to 70.9 million tonnes.

Consol Energy 's fourth quarter and full year production guidance assumes the Buchanan Mine resumes full production on November 15th 2007. It intends to report third quarter 2007 results before the stock market opens on 25 October 2007.

Viable coal deposits discovered in Kenya

It is reported that Kenya’s hopes of becoming a coal producer have received a major boost after exploratory drills in two districts in Eastern Province yielded encouraging results, with it’s cement industry expected to be the first beneficiary.

According to government geologists carrying out studies in the Mui basin in Kitui and Mwingi districts, coal, which is currently imported from South Africa, has been found at a bare depth of almost 11 meters. Mr Joseph Ndollo the lead site geologist told The East African “Preliminary results show that out of the 18 wells so far drilled at different points within the basin, 10 have coal deposits,”

Kenya’s cement industry has faced difficulties satisfying demand both locally and in the region particularly Southern Sudan where a construction boom is under way due to a shortage of clinker and the high costs of importing coal from South Africa. An additional bonus is that the coal has been found at a convenient distance from major deposits of limestone, from which Klinker is made. Players in the cement industry are confident that once Kenya starts producing its own coal, cement consumer prices will be scaled down by more than a third.

Mr Pradeep Paunrana MD of Athi River Mining Company said that the high freight costs of importing coal contributed to more than half of the total production costs of cement. He said “Coal importation costs obviously determine the production costs and the trend in consumer prices. Kenya’s unexploited coal potential could become the driving economic force in a major industrial revolution in the region.”

Shanxi Coal may delay HK IPO

China Knowledge reported that Shanxi Coal Transportation and Sales Co might delay initial plans for its USD 1 billion IPO in Hong Kong, in favor of listing at the domestic market.

According to reports, Shanxi Coal will likely engage CITIC Securities as the underwriter for the issuance of the company's A shares, which is likely to take place in June next year or later. The possible amendments surfaced as Shanxi Coal considers terminating the contract for the issuance of Hong Kong IPO with Bear Steams Co following a decline in its business.

Bear Steams Co announced news that the company will be retrenching 310 employees by combining two mortgage origination businesses, thereby reducing a total of approximately 40% of its headcount since the beginning of the year. Similar lay offs in the industry had been widespread, as business plummeted with growing defaults by borrows.

Shanxi Coal is a subsidiary of the state owned Shanxi Coal Transportation and Sales Group with 92 mines and an annual capacity of 27.86 million tonnes.