PM to lay foundation for SAIL BSL expansion project

It is reported that Dr Manmohan Singh PM of India will lay the foundation stone of INR 10,000 crore modernization and expansion plan of SAIL Bokaro Steel Plant on April 18th 2008.

Mr Chandrashekhar Dubey MP of Dhanbad said that "It is a matter of honor that the PM has decided to visit Bokaro city for laying the foundation stone. The new unit would launch BSL on the course of achieving production of 20 million tonnes of steel."

35 firms bid for NMDC mining JV

It is reported that Corporation’s global tender for 50:50 JV for developing facilities in NMDC’s existing or new mineral properties overseas has evoked response from 35 domestic and foreign steel majors to develop facilities in NMDC’s existing or new mineral properties overseas.

Among the 35 companies, 6 are foreign bidders, 12 are from steel sector while 19 are from the mining sector, with the other sectors making up for the rest.

NMDC would now shortlist companies to make a presentation before final selection. This is not the first time that ArcelorMittal has evinced interest in India’s raw material resources. It is also understood to be interested in a JV with CIL for its abandoned mines and unexplored reserves.

NMDC produces around 30 million tonnes of iron ore annually from its Bailadila deposit in Chhattisgarh and Donimalai in Karnataka and has balance reserves that add up to more than 700 million tonnes. It supplies to most domestic steel companies that do not have captive mines such as Essar Steel, Ispat Industries and Rashtriya Ispat Nigam Limited.

CIL BCCL 2007-08 net profit up by 71% YoY

Coal India Limited’s subsidiary Bharat Coking Coal Limited has reported a 71.78% YoY growth in its net profit at INR 85.17 crore for 2007-08 as against INR 49.58 crore achieved in 2006-07. Its raw coal production went up from 24.2 million tonnes in 2006-07 to 25.22 million tonnes in 2007-08, up by 4.2% YoY.

Mr AK Paul CMD of BCCL said that it has achieved the annual plan target and has earned profit for the third consecutive year.

Out of the total coal production, coking coal production in 2007-08 stood at 3.54 million tonnes as compared to 3.27 million tonnes in the previous fiscal. The targeted raw coal production of BCCL for 2007-08 was 25.20 million tonnes while the profit for the same period was projected at INR 83 crore. BCCL's washed coal production was 16.82 million tonnes in 2007-08 as against 16.6 million tonnes in the preceding fiscal while its coal off take stood at 24.05 million tonnes in 2007-08.

It has set a production target of 26.5 million tonnes in 2008-09 and expects to touch 30 million tonnes by 2011-12. Against the production target of 26.5 million tonnes, BCCL plans to place 5 million tonnes under e auction out of which 4 million tonnes will be for spot auction and 1 million tonne for forward e auction. It is aiming at a net profit of INR 304 crore for 2008-09 and INR 543 crore by 2011-12. Coking coal production is set to go up to 4.38 million tonnes in 2008-09 and 5.76 million tonnes by 2011-12.

BCCL has lined up an investment of INR 1,183.95 crore for the 11th Plan Period which includes INR 978.95 crore to be spent on mining activities and the balance INR 205 crore on non-mining activities like washeries and exploration. Out of the INR 978.95 crore on mining, INR 744.95 crore on existing mines INR 60 crore on the ongoing projects and INR 75 crore on new projects.

NTPC 2007-08 net profit up by 3.85% YoY

National Thermal Power Corporation has recorded a 3.85% YoY increase in net profit at INR 7,129.30 crore in the financial year ended March 31st 2008. Sales increased by 13.53% YoY to INR 37,004.6 crore from INR 32,592.2 crore in 2006-07.

Mr AK Singhal director finance of NTPC said that "Higher efficiency and increased power generation resulted in higher sales and profits."

NTPC generated 20,086 crore units of electricity during 2007-08 up by 6.46% YoY. Its coal based power plants recorded a plant load factor of 92.24% when compared with 89.43%. Gas based power plants, however, suffered as the company received 11. 7 million cubic meters per day of gas during the year when its requirement was 17.35 million cubic meters per day for its plants to operate at 90% plant load factor.

Mr T Sankaralingam CMD of NTPC said that "This affected the performance of our gas based power stations." He added that it imported 2.5 million tonnes coal in 2008, which is expected to double to around 5 million tonne in the current fiscal.

Steel Strips Wheels Q4 up by 29.93% YoY

Steel Strips Wheels announced that a good increase in standalone net profit during the Q4 ended March 2008. During the quarter, the profit of the company rose 29.93% YoY to INR 57.30 million from INR 44.10 million in the same quarter last year.

Its net sales for the quarter rose 34.86% YoY to INR 733.10 million, while total income for the quarter climbed by 33.86% to INR 740 million, when compared with the prior year period.

(In INR million)

During the quarter the company reported a fall in operating margin by 325.38 basis points to 18.67% on higher input cost. On the other hand, there has been increase of 16.73% in interest charge to INR 30 million and decline of 14.07% in depreciation charge to INR 34.80 million over previous year period.

Steel Strips Wheels is a producer of automobile wheel rims at Chandigarh. It has worked with Japanese technical consultants for upgrading quality control and reducing wastage. The Japanese contract also calls for training in wheel and die design and technical assistance in procuring equipment. The major clients of company include Maruti, Mahindra & Mahindra and Bajaj Tempo.

TATA Power secures USD 450 million loan for Mundra project

BS reported that TATA Power’s upcoming 4,000 MW ultra mega power project at Mundra in Gujarat made a crucial breakthrough in achieving financial closure, with the International Finance Corporation agreeing to lend USD 450 million with a 20 year tenor.

The USD 4.2 billion project will also be financed by Asian Development Bank to the extent of USD 450 million, Korean export credit agencies with USD 800 million and local banks with USD 1.5 billion.

Mr Prasad R Menon MD of TATA Power said that "We are working on the financial closure and will announce the details soon."

TATA Power executives said that the board meetings of other lenders are set to approve the funding in the coming weeks.

Mundra UMPP is India’s first private sector power project with supercritical technology and is promoted by Gujarat Power. It was awarded to TATA Power by the ministry of power in December 2006 through tariff based competitive bidding. TATA Power had submitted the lowest tariff of INR 2.26 a unit with the first year tariff pegged at INR 1.91 per unit per kWh. The first of the power plant’s 800 MW units is expected to be commissioned in mid 2011 and the other units will be launched at intervals of 4 months each.

TATA Power is India’s largest private sector power company with an operating capacity of 2,355 MW, including 1,838 MW thermal and 457 MW hydro energy.

HPCL puts Vizag expansion on backburner

Mr SV Sahni executive director of Hindustan Petroleum Corporation Limited said that its Visakhapatnam refinery expansion project will not be taken up before 3 years. Mr Sahni said that "First we are going to set up the other units necessary to meet Euro IV requirements. Only after that, the expansion will be taken up. I do not see it happening before 3 years."

Mr Sahni said that "All these projects were stalled due to non availability of land, which has now been resolved after we bought nearly 400 acres from Vizag port. Orders for machinery and other works for these projects have already been placed."

Hindustan Petroleum has been planning to double the capacity of its Vizag refinery to 15 million tonnes since a long time. The expansion was initially to be completed by end of 2010. It now plans to expand capacity by 2015, entailing investment of up to INR 11,000 crore. HPCL will also set up a delayed cocker and mild hydro cracker unit in the refinery at an investment of INR 4500 crore.

TATA Motors to expand its business in Africa

It is reported that TATA Motors would expand its businesses in the African continent, including starting of assembly operations of semi knock down pick up trucks in Senegal and similar activities for buses in Congo.

TATA Motors is also keeping an open mind to explore the possibilities of taking its INR 100,000 car Nano to Africa in the future.

Mr Ravi Kant MD of TATA Motors said that "We have a long history in Africa and our buses and vehicles are plying in the continent for many decades. We want to take part in the development and growth of Africa. One opportunity could be to take part in personal transportation, in which Nano can play a role."

BHEL Ranipet eyes INR 2,000 crore turnover in 2008-09

It is reported that Bharat Heavy Electricals Limited’s Ranipet unit has projected a turnover of INR 2,000 crore during the current financial year 2008-09.

Mr AV Krishnan GM in charge of the boiler auxiliary’s plant of BHEL said that it had been logging 30% growth and was targeting a profit before tax of INR 300 crore in 2008. The Ranipet unit has undertaken an INR 117.42 crore modernizations and expansion, which would be completed by December 2009.

Mr Krishnan said that Ranipet’s operations reported an all time high turnover of INR 1,415.25 crore in the year 2007-08 up by 13% YoY, while profit before tax was at INR 208.14 crore. The order book stood at INR 4,658 crore, which includes orders worth INR 2,939 crore bagged during the year.

Post modernization, BHEL’s installed capacity would increase to 15,000 MW from 10,000 MW now. It currently has about 300 sub contractors.

POSCO to raise steel prices by up to 21%

It is reported that POSCO will raise prices of its major steel products by as much as 21% as part of efforts to offset increased costs for iron ore and other raw materials.

According to POSCO, the price of hot rolled coils will rise by 21% to KRW 700,000 (USD 717) per tonne starting from April 17th 2008. It said that the prices of heavy steel plates, used to make ships and cold rolled coils will climb by 18% to KRW 785,000 per tonne.

POSCO said that "The decision to raise the prices of steel products is inevitable as costs for raw materials such as iron ore and coal have gained sharply. The planned steel price hike, the second of this year, came after prices of iron ore and coal rose sharply since last year.

In February, POSCO agreed to pay 65% more for iron ore that it buys from Brazilian miner Vale. This week it agreed with an Australian supplier to a 205% to 210% coal price hike from the second quarter.

Venezuelans block steel plant after takeover order

Reuters reported that workers have blocked all steel shipments from Venezuela's Ternium Sidor steelmaker a day after a government order to nationalize the company.

Mr Jose Rodriguez union president told Reuters that workers stopped steel leaving the plant to protect the product during the nationalization announced on Wednesday by Mr Hugo Chavez. He added that "It is paralyzed until further notice.”

Mr Rodriguez said that a group of workers had also entered the administrative offices of Ternium Sidor to prevent the company removing important documents.

An official source at Ternium Sidor said about 300 trucks and two ships were affected by the blockade, which it called illegal. The company asked the government to intervene, the official, who asked not to be named because they did not have authority to speak for the record.

Iron ore price negotiations – LKAB and ArcelorMittal settle

LKAB and the world’s largest steel producer ArcelorMittal announced that they have settled the prices of LKAB Blast Furnace Pellets and Kiruna B Fines for the calendar year 2008.

The new prices are 244.54 c/u FOB for Blast Furnace Pellets, an increase of 86.67 % and 163.50 c/u FOB for Kiruna B Fines an increase of 70.31 %.

EU sets deadline for ArcelorMittal buy stake in Gonvarri Brasil

Thomson Financial reported that the European Commission deadline for its inquiry into steel group ArcelorMittal's proposed acquisition of a 50% stake in Gonvarri Brasil, forming a steel service centre joint venture is set for May 15.

The transaction is being reviewed under the EU's simplified merger review procedure for cases which the commission believes do not pose competition concerns.

No financial details were disclosed.

ArcelorMittal already holds a significant stake in the Gonvarri group, which services automotive, industry and distribution customers and has been a major supplier for several years. The two groups already own a common facility in Senica, Slovakia, which started operations in 2007.

Merrill Lynch cuts PCI pricing outlook

Bloomberg reported that Macarthur Coal, supplier of 35% of global export demand for pulverized coal used in steel mills, fell the most in three weeks in Sydney trading after Merrill Lynch cut its rating, saying prices have peaked.

Analysts led by Mr Mike Harrowell in an April 9 report said that “Merrill cut its rating on Macarthur to neutral from buy.” He said that Macarthur shares have risen 34% this year on expectations for record contract prices after floods in Queensland State in Australia, the producer of more than two thirds of the world's traded coking coal, cut supply.

Mr Harrowell said that "We expect the recent strength in Macarthur Coal's share price, reflecting upward revisions in the market's Japanese financial year 2008 coking coal price sentiment, will dissipate.”

Merrill said that talks between steel mills and producers for pulverized coal are continuing. Prices may settle at USD 200 a tonne for the year beginning April 1st 2008, Mr Harrowell said that the price may then fall to USD 125 in the long term.

Votorantim increases offer for Milpo

Brazilian conglomerate Votorantim said that it will raise its offer by 16% to increase its stake in Peruvian miner Milpo in a bid to control the local company.

Votorantim said it will pay up to USD 490 million or USD.33 a share, up from its first offer of USD 422 million or USD 2.87 a share. If the offer is successful, Votorantim would own 51% of Milpo’s circulating shares, giving it effective control of the company.

Mr Flavio Donatelli head of finance and administration in a statement said that "Fitch Ratings lifting of Peru to investment grade and the re evaluation of the sol against the dollar were among the key factors considered when deciding to make a new offer.”

Votorantim, the world’s third largest zinc producer, already owns 24.88% of Milpo’s shares in circulation. It previously said it has a letter of credit from JPMorgan to cover the purchase offer for 26.12% of shares in the market.

Last week, Milpo sent a letter to Peru’s securities regulator saying Votorantim’s takeover offer undervalued its share price and urged its shareholders to evaluate its plans and performance before deciding to participate in the public offer.

Votorantim has mining and metals operations throughout Latin America and, like other companies, is working to consolidate its holdings in the sector, helped by high global prices for metals.

MEPS forecast for North American carbon steel prices

UK based MEPS said that “In the flat products sector, proposals for further substantial hikes have been made by North American producers. A large proportion of these advances are likely to be successful this month.”

MEPS said that “Reduced availability as a result of low imports and higher export opportunities should help push through price rises. Scrap values have also moved up over the last four weeks. This is expected to give additional weight to mills' requests for increases in transaction figures. Further strengthening in the scrap market is expected in April with prices remaining firm in the short term. Consequently, transaction values for all flat products are forecast to climb to the middle of this year.”

MEPS said that “Low consumption from end-users, as a result of the weakening economy, is expected to have a negative impact on steel prices during the second half of 2008. Record high figures over the summer are likely to cause import volumes to increase once again. Significant falls are, therefore, forecast for the final few months of the year for strip mill products. Hot rolled plate values are likely to hold up better due to strong demand, particularly from the energy and agricultural sectors. A modest improvement in the average flat products price is likely early in 2009.”

MEPS added that “In the short term, long products prices are expected to follow scrap higher. However, import volumes, expected to arrive shortly, should help to alleviate the pressure on supply for some categories. Reasonable levels of inventory are likely to result in reduced buying from distributors as values reach their peak. As a result, May is predicted to be the pinnacle of the current cycle, with the MEPS North American long products price topping USD 810 per tonne. Economic concerns should prevent wire rod figures from moving up further, despite the predicted rise in scrap costs this month.”

MEPS further added that “Transaction figures for all long products are forecast to move downwards in the second half of the year. Current prices are likely to attract further imports, alleviating tight supply. Demand on the mills is expected to slow towards the end of the year with a considerable drop in end-user consumption predicted for 2008. A pickup in selling values is then anticipated for the first quarter of 2009 as distributors look to rebuild inventories after the winter lull.”

South Korean iron ore import raises in 2007

It is reported that South Korea imported about 46.18 million tonnes of iron ore in 2007 up by nearly 5.2% YoY.

Most of iron ore imported was from Australia with 31.18 million tonnes which was 67.5% of total import volume.

(Sourced from YIEH.com)

ArcelorMittal plans to invest in Indonesia

Xinhua cited Mr Muhammad Luft board chairman of Indonesian Investment Coordinating as saying that ArcelorMittal has some plans to invest in Indonesian steel sector.

Mr Susilo Bambang Yudhoyono President of Indonesian hailed the plan and asked the company to meet environmental aspects during a meeting with Mr LN Mittal CEO of ArcelorMittal.

Mr Fahmi Idris Indonesian minister for industry said that "ArcelorMittal wants to develop steel industry in Indonesia. It sees Krakatau Steel Inc as a partner.”

He said that the company offered three options to the Indonesian government, including development of mining industry, establishment of a strategic partner with two Indonesian companies including Aneka Tambang Inc and Krakatau Steel Inc.

LKAB begins test mining of magnetite in Svappavaara

It is reported that via its subsidiary Minelco, LKAB, has been granted a permit by the County Administrative Board of Norrbotten for test mining of 50,000 tonnes of iron ore in the Gruvberget iron ore deposit, near Svappavaara.

LKAB began to investigate the possibility of opening a new iron ore mine in Svappavaara in the autumn of 2007, since the prospects for satisfying the growing demand by mining greater volumes in the existing mines in the Orefields were limited.

The concept that LKAB and subsidiary Minelco are now investigating is mining that is directly tied to booming demand in the minerals market. This implies production as long as ore prices and demand for the products that can be produced remain high. The intention is to make Gruvberget an open pit mine with a maximum annual production of 2 million tonnes of magnetite products. Formerly, LKAB operated an open-pit mine in Svappavaara that was closed and flooded during the downturn in 1983.

Test mining will involve immediate extraction of 50,000 tonnes of iron ore for subsequent laboratory testing and pilot-scale trials at LKAB’s research facility in Malmberget. During the autumn, full-scale testing will continue at the concentrating plant in Svappavaara. All testing is expected to be completed by the end of the year.

According to estimates performed earlier, the known mineral assets, in the form of magnetite and hematite, amount to at least 27 million tonnes. The geology, shape and position of the mineralization indicate that it continues at depth and to the north. The planned test program will raise the level of knowledge with respect to the entire mineralization, after which its extent can be more accurately determined.

Mr Per Erik Lindvall vice president of LKAB’s Minerals Division and President of Minelco said that “By initiating test mining, we are taking a very big step towards the start of a mining operation at Gruvberget. Our studies have already indicated that the iron ore is of very high quality. Now, we will gain a better knowledge of the properties of the ore and of which products can be produced. In addition to increasing production capacity, we will secure the continued supply of iron ore while strengthening the company’s position as a stable, long term partner for our customers.”

Mr Per Erik Lindvall said that “An environmental impact assessment and technical description will be submitted to the environmental protection authorities as soon as possible. The faster the authorities are able to review and deliberate on these documents, the better it will be for the project. Only when we have been given a decision by the environmental protection authorities can we take the decision to proceed with mining on a commercial basis. If all goes according to plan, commercial mining can begin in early 2009.”

Scrap prices in US surge in last week

The price of bundled scrap for US car for April hikes by USD 155 per long tone to USD 454.5 per long ton, driving the price of industrial scrap to go up.

Meanwhile, the price of H1 scrap on average in Pittsburgh, Chicago and Philadelphia has been up by USD 148 per long ton to USD 499.17 per long ton since April 7.

In eastern coast of US, the average price of H1 scrap in New York, Boston and Huston was USD 475.83 per long ton, increasing by USD 163.30 per long ton form last week. On the other hand, the average price of H1 scrap in Los Angeles, San Francisco and Seattle was USD 192.67 per long ton hiking by USD 76.67 per long ton from a week ago.

(Sourced from YIEH.com)

Recession reports – IMF predicts slow growth

In its latest forecast, the International Monetary Fund said that world economic will slow to 3.7% in 2008 and 2009, 1.25% lower than growth in 2007.

The downturn will be led by the US, which the IMF believes will go into a mild recession this year while growth in the UK will slow to 1.6% in 2008 and 2009.

It expects the US economy to grow by just 0.5% during 2008 and 0.6% in 2009 and to contract in the H1 of 2008. It is predicting growth in the eurozone of 1.4% in 2008 and 1.2% in 2009, with Europe’s largest economy, Germany, growing just 1% in 2009.

South Korea ferroalloy output in 2007 up by 19.5% YoY

According to statistics, South Korea's ferroalloy output totaled 319,152 tonnes in 2007 up by 19.5% YoY as compared to 266,974 tonnes in 2006.

In addition, ferroalloy sales were 315,559 tonnes in 2007 up by 15.4% YoY as compared to 273,369 tonnes in 2006.

Among them, domestic market accounted for 235,616 tonnes up by 24.4% YoY and export market accounted for 79,943 tonnes down by 4.3% YoY.

(Sourced from YIEH.com)

ThyssenKrupp sells Nobiskrug shipyard to Eagle River Capital

ThyssenKrupp AG’s technologies unit agreed to sell shipyard Nobiskrug to Eagle River Capital Ltd for an undisclosed sum.

According to a statement by ThyssenKrupp, the buyer based in Guernsey is part of a conglomerate focusing on ship components, engineering services and facility management. The sale is effective retroactively from October 1st 2007

Nobiskrug has 400 employees and posted sales of EUR 81 million in the year to end September 2007.

The sale is part of a restructuring at ThyssenKrupp Marine Systems, which the German steel maker plans to regroup in two separate entities, a military and a civil sector.

Petro Canada to setup steel fabrication shop at site

It is reported that Canadian oil and gas company Petro Canada plans to set up its own steel fabrication plant at the CAD 19 billion Fort Hills oilsands site to combat cost and transportation problems.

Mr Neil Camarta vice president of Petro Canada during the Cold Climate Construction Conference said that steel modules for oilsands projects are currently built elsewhere, mostly in Edmonton and are sized to be transported by road.

Mr Camarta said that modules made in 100 tonne sizes to fit on trucks use twice as much high priced steel as the 1,000 tonne units Petro Canada will build on site, a big deal when you need oil prices between CAD 60 and CAD 70 US a barrel to get a return on synthetic crude.

He said that "If we were on tidal water, we could bring the modules in on barges, but they are built to go on highways. We would rather bring in foreign workers and build them on site."

He also acknowledged the plan will affect Edmonton steel fabricators, but we have to reinvent how we do things.

ConvaTech provides maintenance work to BHPB iron ore link

It is reported that ConvaTech was commissioned to conduct an audit on the conveyor systems currently in operation at the BHP Billiton Iron Ore Mt Whaleback Processing Plant.

Within the scope of work, ConvaTech brief was to engage a team of personnel with relevant technical expertise to undertake a visual inspection, review on site work processes and maintenance methodology, reporting and recommending improvements for the conveyor systems.

ConvaTech spent two weeks on site inspecting all 41 conveyors. From this detailed inspection, ConvaTech formally presented its findings and recommendations for improvement.

BHP Billiton Iron Ore were suitably impressed with the proactive approach taken by ConvaTech and the recommendations that were forwarded.

Subsequently, ConvaTech was awarded an order in July to provide on site management, mechanical and rubber maintenance services including facets of condition monitoring and component supply.

ConvaTech now has a permanent presence on the Mt Whaleback site, with 9 full time employees having been assigned to deliver the required services.

Czech miner NWR plans to float 25% to 33% of stock

Reuters reported that Czech hard coal miner New World Resources plans to offer existing and new shares through an initial public offering in London, Prague and Warsaw. NWR in a statement said that it intended to float 25 to 33% of its shares and that a substantial part of the offering, to be completed in the second quarter, would be in existing stock.

Mr Marek Jelinek CFO of NWR said that "The market will determine the size of the offering and the valuation implied by the offering. The exact split between new and existing shares will be decided at the moment of allocation. I can tell you that a substantial portion will be a sale of existing shares."

One analyst said that an approximate valuation of the entire company of CZK 60 to CZK 70 billion (USD 3.78 billion), based on peer valuation using the price/earnings ratio.

NWR mines coking and steam coal in the eastern Czech Republic and is developing projects in Poland. Co owned by Czech financier Zdenek Bakala, NWR picked Morgan Stanley, Goldman Sachs and JP Morgan Cazenove as joint global co ordinators and bookrunners. Citigroup is joint lead manager and Barclays is co lead manager.

Cosco claims immunity from steel price hikes

Reuters reported that Cosco Corp Ltd said that rising steel prices will not negatively impact its margins after its shares fell more than 15% on market talk that it may face more order cancellations.

Mr Ji Hai Sheng president of Cosco told Reuters that only one of its core businesses was affected by steel prices and that it formed a small part of the company's total turnover. He said that "Steel prices going up or down will not affect us adding that he expected no further cancellations after losing a USD 202 million rig order.

US expects oil to average USD 101 a barrel in 2008

The US Energy Department said that it expects oil to average USD 101 a barrel in 2008, a big upward revision from its January forecast.

The US benchmark West Texas Intermediate for crude oil prices traded on the New York Mercantile Exchange, which averaged USD 72.32 per barrel in 2007, are projected to average USD 101 per barrel in 2008 and USD 92.50 per barrel in 2009.

The Energy Information Administration had predicted USD 87 barrel oil in January for 2008. The US Energy Information Administration unit of the Department of Energy expects American drivers, truckers and airlines to use less fuel this year as the economy slows. That could take some pressure off prices for gasoline and other fuels, and keep the price of gasoline under a US average of USD 4 a gallon.

The Energy Information Administration said that the projected higher costs for crude oil will contribute to higher petroleum product prices. Motor gasoline prices are projected to average USD 3.36 per gallon in 2008, up 55 cents from last year. Diesel prices are projected to show even larger increases in 2008, averaging USD 3.62 per gallon or 74 cents above the 2007 average price. The monthly average gasoline price is projected to peak at about USD 3.60 per gallon this spring, while monthly diesel prices are expected to average about USD 3.90 per gallon in March and April.

US consumption of liquid fuels and other petroleum is expected to decline in 2008 by about 85,000 barrels per day as a result of the economic slowdown and high petroleum prices. After accounting for increased ethanol use, US petroleum consumption is projected to fall by 210,000 barrels per day in 2008. While a year ago, breaching the USD 100 a barrel threshold was not inconceivable, it is surprising that the USD 100 plus price has become the norm with so much ease.

Antofagasta eyes copper output surge

Reuters reported that Antofagasta plc expected to produce 460,000 tonne per year of copper through 2009, and then output would jump 40% after its Esperanza mine comes on line in 2010.

Mr Marcelo Awad CEO of Antofagasta during a CRU/CESCO copper conference in Santiago said that "In coming years we will maintain similar production levels and then add output from Esperanza at the end of 2010, which should mean a rise of about 40% in copper production for the group.”

Mr Awad said his company had raised estimates for investments needed to put Esperanza into production to USD 1.5 billion and the company was working on a short list of potential minority partners. He added that his company’s Reko Diq copper and gold project in Pakistan, a joint venture with Canada’s Barrick Gold, would likely come into production in late 2012, after investments of about USD 1.5 billion.

Awad said market fundamentals remained strong and that commodity prices would stay firm until well into 2009. Esperanza will be one of Chile’s first major Greenfield or built from scratch projects in years. The mine is expected to be ready for operation in the fourth quarter of 2010 and will add annual production of 195,000 tonnes of copper, 229,000oz of gold and 1.556Moz of silver to Chile’s mining roster.

London listed Antofagasta, a Chilean miner, produced 428,000 tonnes of the red metal in 2007 and output is seen improving this year amid higher ore grades at its Los Pelambres mine in central Chile.

Contract for Riyadh's border fence could be awarded in 2 months

MEED reported that the main construction contract for Saudi Arabia's northern border fence project could be awarded in the next 2 months.

The contractor said that the award, which was due to have been awarded by the first quarter of 2008, has been delayed while the client, the ministry of the interior, continues to negotiate with bidders.

A smaller contract covering civil and electro mechanical works on the fence is expected imminently. Two consortiums are in final negotiations with the ministry. They are the local El Seif Engineering & Contracting with the US' DRS Technologies and the local Rashed al Rashed & Sons Group with European Aeronautic Defense & Space Company.

In November 2007, 14 groups submitted bids for the estimated SAR 4 billion contract to build a fence along the kingdom's border with Iraq. The 900 kilometer long security fence will have two lines of razor wire, with a second fence several kilometers behind it. There will be thermal imaging equipment and ground surveillance radar between the two fences.

India keen on IPI project – Iran

Mr Gholam Hossein Nozari Iranian oil minister said that India is keen to partner the proposed multi billion Iran Pakistan India gas pipeline project and has promised to resist all external pressures on the issue.

Mr Nozari said that "Indian officials have voiced interest in the project and stated that no external power can influence them."

Meanwhile, Iran has sent a letter to Pakistan asserting that the export of gas to India through the pipeline is of paramount importance for the country.

Oman calls for bids for Nimr gas network

MEED reported that Oman Gas Company has tendered two packages on its USD 150 million to USD 200 million gas network expansion linking the southern Nimr field with the port city of Salalah.

Pre qualified companies include
1. Fernas Construction Company – Turkey
2. Saipem – Italy
3. Larsen & Toubro – India
4. Punj Lloyd – India
5. Consolidated Contractors International Company – Greek
6. Gulf Petrochemical Services & Trading – Oman
7. Galfar Engineering – Oman
8. Al Hassan Engineering – Oman

Pre qualified companies have until May 26th 2008 to bid for the two engineering, procurement and construction packages. One deal covers the construction of a 150 kilometer long pipeline between Nimr and Salalah. The other covers the upgrade of the control system at pressure reduction stations in Salalah.

The gas will be used as feedstock for the Salalah methanol plant and the Salalah independent power project.

Mohammad al Mojil to float on Tadawul for USD 560 million

MEED reported that construction group Mohammad al Mojil will float on Saudi Arabia's Tadawul with a market capitalization of SAR 2.1 billion on May 3rd 2008 after a book building exercise.

A maximum of 70% of al Mojil's shares will be allocated to institutional investors, with the remainder being available to retail investors.

Mohammad al Mojil is a construction services company based in the Eastern Province of Saudi Arabia. Its main customers are energy and petrochemicals companies, including Saudi Aramco and Saudi Basic Industries Corporation.

It generated net profits of SAR 549 million in 2007 up by 164% YoY from 2006. Revenues were SAR 2 billion in 2007 up by 119% YoY.

China Q1 steel exports down by 19.3% YoY

It is reported that China's exports of steel and iron products down by 19.3% YoY in tonnage in the first quarter but was up by 7.6% in value. The report did not give absolute figures.

Mr Huang Guohua an official with the General Administration of Customs was quoted as telling a forum in Shanghai that the country's index for prices of steel product exports reached 135 in March up by 35% YoY.

China is expected to export 48 million tonnes of steel products and 1.5 million tonnes of semis in 2008.

Steel price in March 2008 up by 9.37% MoM - NDRC

It is reported that Chinese steel prices continued increasing in March with the comprehensive average standing at CNY 5572 per tonne up by 9.37% from February or 36.10% YoY based on statistics offered by price monitoring center of the National Development & Reform Commission. The monitoring covers 30 major provinces and regions across China.

Transaction price of construction steel averaged CNY 5022 per tonne up by 8.57% from February or 50.28% YoY of this, rebar 12mm, Q235 and rebar 28mm, Q 235 averaged CNY 5120 per tonne and CNY 5061 per tonne respectively, common wire rod 6.5mm Q 235 and 8mm Q 235 were CNY 4963 per tonne and CNY 4964 per tonne.

Transaction price of sheet plate averaged CNY 6116 per tonne up by 9.06% from February or 25.65% YoY. HR plate 10mm Q 235 and medium plate 40mm Q 235 stood at CNY 5701 per tonne and CNY 5882 per tonne; HR sheet 1.5mm Q 235A and HR sheet 2mm Q 235 averaged CNY 5894 per tonne and CNY 5770 per tonne respectively; CR sheet 1.0mm Q 195 to 235 and CR sheet 1.2mm Q 195 to 235 were CNY 6377 per tonne and CNY 6409 per tonne; galvanized sheet 0.75mm averaged CNY 6655 per tonne, stainless sheet 1.2mm*1000mm*2000 was traded at CNY 31929 per tonne on average.

Pipe tube transaction price averaged CNY 6181 per tonne in March up by 7.89% from February or 26.16% YoY. In specific, galvanized pipe 25mm, Q235BF averaged CNY 6122 per tonne; seamless pipe 108mm*4.5mm, 20# was CNY 6351 per tonne.

Transaction price of sections averaged CNY 5072 per tonne up by 11.15% from February or 50.04% YoY. Of this, round steel 16mm Q 235 and angle 50mm*50mm Q 235 stood at CNY 5091 per tonne and CNY 5043 per tonne up by 8.79% and 12.45% MoM respectively or 50.08% and 51.59% YoY. I-beam 25mm Q 235 and channel steel 10mm Q 235 averaged CNY 5082 per tonne and CNY 5031 per tonne respectively.

Prediction is the steel prices would move further up in future, bolstered by wide range launch of construction projects this period, sustained cost rise as a result of iron ore, scrap and coke price hikes and the internationally substantial uptrend in steel price, which is shaped by raw materials markup, strong demand and dollar's depreciation etc.

(Sourced from MySteel.net)

China may increase coking coal imports

China Coking Industry Association has forecasted that China's coking coal imports may increase further this year as price for high quality coking coal price keeps rising since last year owing to short domestic supply.

Statistics show China produced 2.536 billion tonnes of coke last year, up by 6.9% YoY as compared with a year earlier. But in the meanwhile high quality coking coal price rose as a result of short supply. Coking coal exports recorded 2.54 million tonnes down by 41.7% YoY; imports registered 6.22 million tonnes up by 33.48%.

Aggregate purchase cost reached CNY 837.58 per tonne in December 2008 up by 23.14% YoY. The cost even broke CNY 1000 per tonne for some buyers in Shanxi and Guangdong. Price surpassed USD 120 per tonne USD 130 per tonne for coking coal from Canada, New Zealand, Australia and so on.

Once international price is fixed, domestic coking coal market might go on rising. According to CCIA, coke producers can gain limited profits despite high coke price.

CCIA believes coking coal imports will increase further while exports go on falling. Export price for coke will move upward amid overall stability on account of raised export tariff and coking coal price advances.

Anshan Steel announces May prices

It is reported that Liaoning based Anshan Steel adjusts EXW prices for May productions, on the basis of its April prices.

I. HR Products up by CNY 100 per tonne for common carbon structural steel, checkered plate, quality carbon structural steel, low-alloy structural steel, bridge steel, structural steel for automobile, shipbuilding steel and corrosion-proof structural steel up by CNY 350 per tonne for IF3 low carbon steel up by CNY 200 per tonne for other low carbon steel and CR structural steel;

II. Products of CR Mill:
a) CR Products up by CNY 150 per tonne for common carbon structural steel, glassed steel and steel for elevators
b) Structural steel price up by CNY 100 per tonne
c) Low carbon drawing steel price up by CNY 50 per tonne
d) CR products with thickness of less than 0.5mm up by CNY 100 per tonne
e) Full hard price up by CNY 300 per tonne
f) GI price up by CNY 50 per tonne for products for deep drawing;
g) Other products price up by CNY 100 per tonne
h) More for products with thickness of 2.0mm or more up by CNY 50 per tonne
I) PPGI price up by CNY 150 per tonne

III. Medium Plate price up by CNY 100 per tonne
a) Low alloy steel, bridge steel, shipbuilding steel, structural steel for automobiles and boiler and vessel steel price up by CNY 150 per tonne b) Boiler and vessel steel 12Cr1MoVg, 15CrMog, 12Cr1MoV, 15CrMo, 12Cr1MoVR and 15CrMoR price up by CNY 800 per tonne
c) ACR950 price up by CNY 500 per ton

IV. Wire Rod price up by CNY 100 per tonne

V. Seamless Products price up by CNY 500 per tonne

VI. Other price unchanged.

(Sourced from MySteel.net)

Hebei to close small steel mills for Beijing Olympics

Interfax China reported that Hebei Development and Reform Commission is set to suspend production at a total of 42 polluting enterprises in the province, in preparation for the 2008 Beijing Olympic and Paralympic Games.

The report added that the move will also close a number of enterprises, including small scale steel mills in an effort to reduce pollution in the surrounding areas of the capital city, in response to concerns over Beijing's air quality.

The 42 enterprises are scattered throughout seven cities around Beijing, namely the cities of Shijiazhuang, Chengde, Zhangjiakou, Qinhuangdao, Tangshan, Langfang and Baoding.

XingSteel secures bearing WRC license

According to the State Administration of Quality Supervision that XingSteel has gained the bearing steel production license, and the variety is high chromium carbon bearing steel wire rods in 5.5mm to 16mm diameter.

Since the quality steel production line has been put into production in August 2007, XingSteel increased efforts to exploit new products, and successfully exploited SWRS82B, XGLX72A, SCM440, 25MnV, 20CrMo etc products, at the same time, the company also vigorously developed bearing steel etc high end products.

As per reports, the quality of the bearing steel has improved and is stable now and the feedback from market users is good.

Baosteel trial produces new construction steel for Expo

It is reported that recently, Baosteel has completed the trial production of BLY160 new construction steel which is used in Shanghai Expo.

The physical property of this product meets the design objective, and is about to enter the new product certification phase. This product fills the blank of domestic construction seismic-resisted metal damper steel.

Compared with the traditional construction steel, BLY160 steel can significantly enhance the frame stiffness and carrying capacity through adding steel sleeve. In view of the good seismic-resisted performance, at present, Japan has 250 buildings using this construction steel, and the domestic market is all long monopolized by other countries.

In order to let the first permanent building "Expo Center" project use homegrown new construction steel, Baosteel takes key project as the platform, launched the development of BLY160 steel two years ago. The successful development of BLY160 not only breaks through the monopoly, but also further promotes Baosteel’s high performance construction steel’s market exploitation and engineering application.

Baotou Steel gets new opportunity for steel rail export

According to International Trade Co under Baotou Iron & Steel Co, which lies in Inner Mongolia, on April9th 2008 the company has already obtained steel rail export contracts from Brazil, South Korea, Argentina and Malaysia with a total volume of 98,313 tonnes by now, 83,000 tonnes are under orders from Malaysia.

Baotou Steel exported 73,000 tonnes of steel rails in 2007. It is predicted that steel rail export volume may be over 126,000 tonnes in this year.

In recent years, Baotou Steel launched steel-making technology transformation, realized continuous casting process to produce heavy steel rail, and established the world’s most advanced omnipotence rolling mill high speed rail production line. In early 2008, “Baotou Steel high speed steel rail’s production technology innovation and application” project gained State Technology’s second class award.

The upgrade of Baotou Steel rail’s equipment and production technology has laid solid foundation for Baotou Steel rail products to go out of the country.

Qinggang to build first class steel production base in China

It is reported that Qingdao Iron & Steel Co, which lies in province Shandong, is now accelerating to change the developing and strategic mode and making great efforts to build first class high quality steel production base in China.

Qingdao Iron & Steel Co steel output in Q1 in 2008 was over 800,000 tonnes for the first time and the proportion of high efficiency steel products was as high as 73.82%, which made a new history record.

In Q1 in this year, Qinggang totally produced over 1.2million tonnes of sintered ore, 846,000 tonnes of pig iron, 838,000 tonnes of crude steel and 815,000 tonnes of steel products. Sales income, tax and profit all reached a peak in history.

Chinese mills frown on spiking input cost as export dwindles

According to data released by National Development & Reform Commission a string of tightening policies have already reined in China's steel export effectively so far, with the shipment volume slides 17.2% YoY to 7.25 million tonnes during January to February with the import dips 0.9% YoY to 2.67 million tonnes.

Mr Liu Yinan vice director of CCCMC at a recent steel conference in Shanghai said that "China's steel export has already fallen back in the first two months of this year and we believe the steel shipment won't bounce back in the remainder of this year."

Meanwhile, China's steel output continues to expand, albeit at a slower rate. In the first two month of this year, China's crude steel output totals 79.45 million tonnes, but the growth pace drops 16.7% YoY finished steel output adds up to 89.05 million tonnes with the expansion down 13.1% from the year before.

Mr Yang Siming general manager of Nanjing Iron & Steel Group said that leading Chinese mills have reported high output growth rate in the first quarter while the smaller mills have been forced to slash production since escalating raw materials prices have squeezed out their profit margin considerably. However, these mini mills would resume output expansion again once the global demand keeps robust growth.

Mr Yang said "Nanjing Steel Group estimates the purchase cost of raw materials would add by CNY 7.2 billion this year, equivalent to a cost rise of CNY 125 per tonne for finished steel products. I believe the steel price hike is set to persist since the mills have no other options."

Mr He Kangyongt director of WISCO's International Trading revealed that the steel export would stabilize at some 1 million tonnes this year, in line with the volume in last three years, since the company always keeps its annual steel export at 10% to 13% of its total steel capacity.

He also pointed out that Beijing might impose a steel exporter qualification system in the future, however, it remains unclear when the new regulation would be unveiled. However, it's common belief among most steel exporters that the policy should help maintain the percentage of total steel output at 10%.

He added that "We are quite optimistic about China's domestic steel demand since nearly 200m people in China would move to the cities in years ahead."

(Sourced from MySteel.net)

Laiwu cuts pig iron purchase price

It is reported that Shandong's Laiwu Steel has pulled down purchase price for pig iron by CNY 40 per tonne with latest price standing at CNY 4450 per tonne. The steelmaker had lowered price from CNY 4550 per tonne to CNY 4490 per tonne. Total decrement amounts to CNY 100 per tonne.

As one of China's top ten steelmakers, Laiwu Steel usually leads domestic companions in pig iron purchase price. Price increase since the second half of last year was mostly propelled by Laiwu Steel. It once raised price by CNY 200 per tonne to CNY 4550 per tonne on March 11th setting a new record in domestic steel industry.

Due to increasing prices for raw materials, EXW price for pig iron is stepping towards cost line and there is little space for price downswings. Besides, in spite of sufficient stocks in Laiwu Steel, most other steelmakers see their stocks lingering at the warning line and have to absorb resources at the soonest. Moreover, scant supply in pig iron market still continues. The latest price cut is likely to influence current pig iron market in Shandong. However, it will not affect notably.

Steelmaking pig iron market in Shandong undulates modestly on account of Laiwu Steel' move. The market is expected to mainly go upward amid overall stability after temporary fluctuations.

(Sourced from MySteel.net)

China Coal Energy 2007 net profit up by 90.35% YoY

It is reported that China Coal Energy Co Ltd’s, the country's second largest coal producer, 2007 net profit up by 90.35% YoY to CNY 5.17 billion under Chinese accounting standards, due to higher coal prices and increased output.

In its annual report filed with the Shanghai Stock Exchange, China Coal Energy Co Ltd said 2007 operating revenue rose 29.9% YoY to CNY 36.82 billion supported by growth in three main segments, coal production, coal chemicals and coal mining equipment. Output was 90.52 million tonnes of raw coal in 2007 up by 14.5% YoY of which raw coal it produced on its own amounted to 83.27 million tons up by 25.2% YoY.

Sales of commercial coal last year stood at 85.16 million tonne with internally produced coal accounting for 69.32 million tonnes up by 21.3% YoY. The average price of thermal coal in the domestic market was CNY 339 per tonne up from 298 a year earlier, while the average export price rose to CNY 479 per tonne from 394. Meanwhile, the average domestic price of coking coal in domestic market in 2007 was CNY 668 per tonne up from 564 in 2006. The average export price fell to CNY 775 per tonne from 847 a year earlier.

Operating revenue from coal production stood at CNY 27.33 billion up by 24.1% YoY. Sales costs for commercial coal produced within the group also rose 23.9% to CNY 12.149 billion with unit sales costs falling CNY 4.35 to CNY 175.26 per tonne.

China Coal Energy also produced 3.37 million tonnes of coke last year up by 42.8% YoY. Sales of coke rose 65.5% YoY to 3.64 million tonnes of which, sales of coke produced within the group rose 72.1% YoY to 2.84 million tonnes.

The average coke price was CNY 1,143 per tonne up by CNY 216 from a year earlier. The domestic price rose by CNY 236 per tonne to CNY 1,043 per tonne and the export price rose by CNY 274 to CNY 1,520. Operating revenue from coke operations rose 114% YoY to CNY 4.47 billion, while operating costs rose 105.7% YoY CNY 3.612 billion mainly due to rising raw material prices.

China Coal Energy said operating revenue from coal mining equipment segment rose 29.4% YoY to CNY 3.595 billion in 2007. Earning per share stood at CNY 0.44 up from CNY 0.34 a year earlier.

Siemens to deliver key components for the longest power transmission link in the world

Siemens Energy together with local partners is to deliver a few of the key components for the longest power transmission link in the world. The order worth for Siemens is about EUR 160 million.

Siemens is to deliver components for the future 2.000 kilometers long power transmission link from the Xiangjiaba hydro electric power plant in south western China to Shanghai on the east coast of the country. The order has been placed by the State Grid Corporation of China. Completion is scheduled for 2011.

Dr Udo Niehage CEO of the Power Transmission Division in the Siemens Energy Sector said that “With our technology, we will enable our customer to transport large amounts of energy in an environmentally friendly manner with low loss. Moreover, as an expert and reliable technology partner we are also helping them to build up sustainable energy systems.”

The Siemens Energy Sector is the world’s leading supplier of a complete spectrum of products, services and solutions for the generation, transmission and distribution of power and for the extraction, conversion and transport of oil and gas.

Construction steel price increases in Chengdu

It is reported that construction steel price increases slightly by CNY20 to CNY 50 per tonne in Chengdu and transactions are active in the market as well.

Sichuan Dagang firstly increased rebar price up by CNY 80 to CNY 130 per tonne in the end of March and Pansteel Chengdu Branch and Shuigang raised wire and rebar prices up by CNY 50 per tonne. As a result, traders have gradually raised distribution prices and cut down deliveries. Now the distribution price of Φ22-25mm HRB335 rebar from Shuigang, Dagang, Weigang and Pansteel Chengdu Branch is CNY 5,220 per tonne. The supply of Φ16-18mm HRB335 rebar is short and the price is CNY 5,250 per tonne, while the price in Kungang is CNY 5,190 per tonne. Prices of Φ12mm and Φ14mm HRB335 rebar from Dagang, Weigang and Pansteel Chengdu Branch are both CNY 5,500 per tonne.

As for wire, the price of high speed wire in Kungang is CNY 5,220 per tonne, while the price of plain wire in Pansteel Chengdu Branch and Shuigang is CNY 5,200 per tonne. The price of high speed wire in Weigang is CNY 5,250 per tonne. The inventory of construction steel in Chengdu is 135,000 tonnes down by 7,000 tonnes than it in last weekend, including 20,000 tonnes of wire and 115,000 tonnes of rebar.

Due to sustaining increase of raw materials prices, steelworks have to continue to raise EXW prices. Pansteel Chengdu Branch, Shuigang and Weigang raised wire and rebar prices up by CNY 50 per tonne on April 7th. Desheng Steel raised prices of II grade rebar and wire up by CNY 30 per tonne in the market in Chengdu. Due to tight supply at present, it is believed that construction steel price would remain rising trend in Chengdu.

China Coal eying overseas expansion

It is reported that China Coal Energy, the country's No 2 coal producer, is exploring investments in Australia and Indonesia while it doubles spending to ramp up production and feed the world's largest coal market.

Mr Jing Tianliang chairman of listed China Coal and president of its parent China National Coal Group Corp said "We are always seeking investment opportunities abroad actively and cautiously. We are doing feasibility studies. Asked where, he said "Australia, Indonesia and some other countries."

China Coal, the country's largest coal producer after Shenhua Energy also expects to export about as much of the hydrocarbon this year as it did in 2007, or 18.9 million tonnes. Mr Jing said "We hope to keep exports at last year's level. We are still negotiating on export prices. But I don't think they will be lower than the benchmark Australian prices to Japan."

Mr Jing added without elaborating the company targets 25% of its domestic coal sales volume on spot market this year up from 18% last year, even as its contract prices for thermal coal jumped nearly 12% in 2008.

The firm has been ramping up output at a rapid clip, planning to raise annual production capacity by 15 million tonnes a year until 2010 to power roaring economic expansion.

Mechel commissions heating furnace at Targoviste

Mechel announced that the walking beam heating furnace of the medium section mill at its Mechel Targoviste Romanian subsidiary has been commissioned following its reconstruction at the facility.

Investments in the new project totaled about USD 5.8 million. The equipment was supplied by Techint of Italy, one of the world’s premier manufacturers of such equipment. Most of the construction and installation work was performed by Mechel Targoviste’s specialists.

The furnace modernization will significantly increase the billets’ range. Continuously cast billets have been expanded to a maximum sector of 150 180 mm section, compared with the previous maximum of 140 140 mm. The new equipment will reduce utilization of the obsolete blooming technology, and the subsidiary will start using, to the maximum extent possible, the billets manufactured at the continuous casting machine commissioned in March 2007 after its reconstruction. The modernized furnace will heat billets more evenly, thus improving the quality of the manufactured products. The new equipment will lead to more efficient consumption of natural gas and electric power as well as refractories. Raw material consumption per tonne of the finished products will also reduce significantly as well as volume of human labor will decrease due to the full automation of the furnace. Installation of the new equipment will reduce production repair and maintenance costs.

All recent equipment that was installed and reconstructed, complies with the highest European standards in terms of quality and operation reliability. Mechel Targoviste plant is gradually turning into one of the leading steel manufacturing enterprises in Eastern Europe.

The furnace reconstruction was performed in line with Mechel Targoviste’s production capacities modernization program planned for 2007 to 2011. The walking beam furnace is designed to heat billets before feeding them to the rolling mill, which manufactures finished products. The subsidiary manufactures carbon and low alloy steel rolled products as well as forged and calibrated products for machine building, automotive, hardware, bearing, and pipe producing industries.

TMK’s IPSCO loan has seven underwriters – Report

Reuters cited banking source as saying that the USD 1.3 billion bridge loan backing Russia's largest steel pipe maker TMK's acquisition of IPSCO's US pipe operations is being underwritten by seven banks.

Aother banker said, among the seven banks are ABN AMRO, Bank of Tokyo-Mitsubishi UFJ, Barclays, ING and SMBC. One other lender has joined the deal with a clearly defined take and hold commitment.

Syndication is expected to launch next week.

Ukraine government to ban gas fired power generation

Ms Premier Tymoshenko PM of Ukraine while speaking at a press conference said that one of the privatization conditions for GenCos will be the full transfer of capacities to coal fired technologies, including low grade coal.

This condition concerns two companies that currently have gas fired capacities, Centrenergo and another company where the Supreme Court has reestablished a 76% stake for the state Dniproenergo.

The other two conditions aired so far have been the compulsory upgrade of production equipment and measures to assure compatibility of output with requirements of the pan-European UCTE grid system.

Anglo Asian gets further loan for Gedabek project

Thomson Financial reported that the International Bank of Azerbaijan has agreed to provide a further USD 20 million term loan to Anglo Asian Mining Plc for its Gedabek project in West Azerbaijan adding it is confident of funding the construction of the Gedabek project. This is in addition to the existing USD 5 million credit facility previously announced.

Anglo Asian Mining anticipates it will require additional funding of USD 5 million to USD 15 million, above the IBA term loan and the existing cash balance of USD 5 million, to complete construction and to cover costs of further exploration at both Gedabek and new targets it has identified.

With a sharp rise in steel prices, Anglo Asian Mining said the project cost remains under revision but added the total capital cost, including working capital and contingencies is unlikely to exceed USD 40 million.

LUKoil's US GAAP net income in 2007 up by 27% YoY

RIA Novosti reported that Russia's largest independent crude producer LUKoil US GAAP net consolidated income up by 27.1% YoY in 2007 to USD 9.51 billion.

LUKoil said "The increase in net income was due to favorable market conditions, the high refinery margin, an increase in refinery throughput and hydrocarbon production as well as due to effective cost control."

LUKoil said at the same time, net income growth was held back by the appreciation of the ruble against the dollar, the increase in transportation tariffs and the higher tax burden.

LUKoil sales grew 20.8% YoY to USD 82.24 billion and earnings before interest, taxes, depreciation and amortization climbed 25.1% in the reporting period to USD 15.388 billion.

Gazprom offered stake in gold deposit in Russia's Far East

RIA Novosti reported that natural gas giant Gazprom's banking arm Gazpombank will gain control of a gold deposit in Russia's Far East after buying a 51% stake in its owner from Canada's Fortress Minerals Corp.

The Canadian company agreed recently to purchase the remaining 49% interest in the Svetloye gold project in Russia's Khabarovsk Territory from Freeport-McMoran Exploration Corp. and offered Gazprombank a purchase option, valid until December 31st 2008 for a 51% stake. Fortress also announced a new strategic partnership with Gazprombank.

Fortress said that it had agreed with Gazprombank to jointly pursue additional gold project acquisitions in Russia, capitalizing on the respective strengths of Fortress' mining expertise and Gazprombank's extensive relationships in Russia.

Fortress Minerals Corp. is a subsidiary of Lundin Group, and its shares are listed on the Toronto Stock Exchange. The company's market value currently stands at around USD 120 million. Its major asset is the license for the Svetoloye gold field. The company also holds geological exploration licenses in Mongolia and Nicaragua.