Indian export tax on steel becomes official

Indian government’s finance ministry’s revenue department vide notification No 66/2008-CUSTOMS dated May 10th 2008 under sub section (1) of section 25 of the Customs Act of 1962 (52 of 1962), said that the central government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column 3 of the table and falling under Heading No of the Second Schedule to the Customs Tariff Act of 1975 (51 of 1975), specified in the corresponding entry in column 2 of the table, when exported out of India, from so much of the duty of customs livable thereon under the said Second Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column 4 of the table

Anti POSCO faction takes oath to fight against project

IANS reported that at least 100 people took oath in a village temple in Orissa to fight against the proposed steel plant in their region to be set up by POSCO. The people, mostly from Dhinkia, took oath at a temple of Hindu goddess Ma Sarala at Jhankad village in the coastal district of Jagatsinghpur.

Mr Chitta Swain deputy general secretary of the POSCO Pratirodh Sangram Samiti told IANS that “They took oath that they will remain in the forefront of the anti POSCO agitation and shall sacrifice their life, if required, to prevent the proposed project, They took the oath by touching the holy offerings of the deity after the priests of the temple performed rituals.”

Raw material global cartel pushing steel prices up– Dr Irani

Mr JJ Irani director of TATA Sons last week said that steel prices are going up due to unprecedented rise in input prices as a strong international cartel of raw material suppliers is causing high input prices.

Mr Irani, in an exclusive interview with CNBC-TV18 said that "I think we are all talking about increases in steel prices but the first thing that we should look at is what goes behind and why are the steel prices increasing.”

Dr Irani9 said that “It is true that everyone is talking of steel because there are so many buyers of steel. But steel price are going up because the inputs into the steel making industry are going up. Not many people buy iron ore or coking coal. So they are not talking about that. But there have been unprecedented increases in these commodity prices and that is why the cost of steel making has gone up and that is the reason of why the steel price has gone up internationally. What has been agreed with the Prime Minister, of course the steel companies will adhere to that."

He added that "It all depends on the cost of raw materials and the cost of raw materials was put up towards the end of 2007 and there is a lag effect and that lag effect is now coming into force, and it is not just in India. Internationally also, steel prices have gone to unprecedented levels. Because there is a very strong cartel between the suppliers of raw material both coal and iron ore internationally, and our suppliers have tagged on to their prices. Somebody must look into why has the cost of digging out the raw material gone up, to substantiate such an increase in the cost of raw material, which in turn is putting up the cost of making steel."

Mr Irani further said that "I think the government must be realistic. They must look into the cost build up. It’s very easy to see why the cost of making steel has gone up and if the government feels that steel has to be conserved for the country and I think it should be, then of course steps has to be taken to make it cheaper and the cost of what goes into making steel should be made less. Then the steel makers will be very happy to keep steel in this country and supply it according to the requirements of our customers here locally."

SPSL in talks for INR 700 crore private equity deal

Livemint reported that Shree Precoated Steels Limited is planning to sell 10% to 15% of its stake to a private equity fund to raise about INR 700 crore and is talking with potential investors including ICICI Venture Limited for the purpose.

SPSL’s promoters currently own 62% of its stake. Foreign institutional investors own 12%, with Citigroup Global Markets Mauritius Private Limited holding 1.18%, Merrill Lynch Capital Markets Espana SA 1.9%, and Passport Capital Llc. 4.9%. The company has a market capitalization of around INR 2,317 crore on the Bombay Stock Exchange.

SPSL is the latest to join the band of firms tapping into private equity after funds dried up in equity markets. Private equity firms, too, are keen to grab the opportunity in India’s capital intensive realty business.

BHEL takes over BHPV

It is reported that Bharat Heavy Electricals Limited took over Bharat Heavy Plate & Vessels Limited.

The authority letter relating to the takeover was handed over by Dr Satyanarayana Dash secretary of the union department of heavy industry to Mr K Ravi Kumar CMD of BHEL.

Mr Ravi Kumar said BHPV would be developed as a dedicated centre for industrial boilers, INR 236 crore would be spent on the unit during the next 3 years and its turnover would touch the INR 1,000 crore mark in next 5 years.

Forgings industry out in cold over price issue

According to Association of Indian Forging Industry, the assurances by steel mills that they will hold prices at March 31st 2008, levels for three months have left the forgings industry still out in the cold.

In a statement released here, the AIFI has asked for clarity over which price line the steel mills intend to hold since steel mills are asking them to pay the increase of INR 7,500 to INR 8,500 per tonne which came into effect from April 1st 2008.

The AIFI said that despite the announcement by steel mills that they will slash prices by INR 4,000 per tonne and hold the price line at March 31st 2008 levels for 3 months till June 2008, forgings units have not received the quality of steel they require from April 1st 2008. This is in spite of forgings units paying an additional INR 5,000 per tonne for forgings quality steel.

It said that "The forgings industry is apprehensive regarding any price reduction actually happening since it is unlikely that the benefit of reduction in import duties etc will be passed on to end users of steel, because this has been our experience in the past."

The AIFI has reiterated its earlier suggestions that could bring some relief. These include a ban on iron ore exports from India or at least a substantial increase in the export duty on iron ore and making available this ore to Indian steel producers at a lower rate, re introduction of customs duty on export of items of steel which the finance ministry has proposed to remove and revise upwards or impose customs duties on cheap imports of auto components from China.

Indian car sales in April surges ahead of likely price hikes

Reuters reported that India's domestic car sales rose at the fastest pace in October 2007 to April 2008 period, while bike sales notched up their first annual rise in a year, as customers advanced purchases expecting the rising cost of steel to push up prices.
According to data released by Society of Indian Automobile Manufacturers, passenger car sales rose an annual 17.2% YoY to 98,740 units in April 2008. Motorcycle sales, which had declined nearly 12% in the year to March 2008 as high financing costs weighed after a series of interest rate increases, rose by 8.3% YoY in April to 501,592 units. Sales of commercial vehicles like trucks and buses stood at 33,271 units in April 2008, up by 7.6% YoY from 30,914.

Mr Sugato Sen director at SIAM said that "If the costumers wait, in the next 2 to 3 months, prices will go up. To avoid that, they are buying now. They have now resigned to the fact that interest rates are not going to go down in the near future."

Meanwhile, India's top car maker Maruti Suzuki India Limited and bike maker TVS Motor Co Limited have said that they will raise prices.

High input costs hit cement producers

It is reported that, while cement producers are under pressure from the government to cut prices, they are hit by a sharp rise in the raw material costs and their profit margins have remained minimal or without growth.

An ASSOCHAM study recording these findings points out a big rise of 42% in raw material costs, much higher than the growth in the profit margins of cement companies in the last quarter of 2007-08.

Mr Venugopal Dhoot president of ASSOCHAM said that "Power and fuel cost, which constitute 60% of the total operating expenditure of cement companies, have increased by 24% in the fourth quarter of 2008. This is on account of the 10% rise in coal prices."

Leading firms, including Grasim Industries, Ambuja Cement and ACC registered minimal or no growth in their net profits. Ambuja Cement reported a drop of 42% in its net profit, while ACC showed no growth and Grasim Industries’ bottom line was restricted to 9%.

CCEA clears INR 8,000 crore FDI for Essar Power

It is reported that Indian government has approved a proposal by Essar Power Limited to infuse up to INR 8,000 crore as foreign equity in the company while permitting it to operate as the holding company. This decision, taken by the Cabinet Committee on Economic Affairs, would enable EPL to undertake various downstream projects, including power and coal mining.

Mr P Chidambaram union finance minister, after the CCEA meeting, said that "The approval will allow the Essar Power to invest in the permitted downstream activities, including investment in power sector and coal mining for captive consumption for power projects."

The proposal has already been cleared by the Foreign Investment Promotion Board. Since the investment inflows have exceeded INR 600 crore, as per Press Note 7 (1999 series), the proposal needed to be cleared by CCEA. In another decision, the CCEA approved a proposal by real estate major Rakindo Developers to set up a subsidiary with foreign direct investment up to USD 250 million.

Essar Global Limited is the holding company of EPHL and also holds diverse investments in India and other countries. At present, Essar Power Limited is the operating company of the Essar Group in the power sector. It owns and operates a 515 MW power plant at Hazira in Gujarat.

Essar Power has lined up plans to invest over INR 20,000 crore in the power sector in the next couple of years, although EPH would provide funds only for the equity stake. It also plans to increase its installed capacity to 6,000 MW by 2012, which includes power plants of 1,200 MW each in Madhya Pradesh, Gujarat and Jharkhand.

BHEL plans JVs with APGenco and TN power board

It is reported that Bharat Heavy Electricals Limited is all set to finalize separate JVs with Andhra Pradesh Power Generation Company and Tamil Nadu Electricity Board, close on the heels of its first JV company, NTPC BHEL Power Projects.

As a first step, BHEL will sign a MoU with the APGenco for supplying equipment for a 125 MW plant, which is expected to come up at Vijaywada in Andhra Pradesh. According to a senior BHEL official, the firm will supply the equipment within 36 months. The plant will be based on the integrated gasification combined cycle technology, which uses synthetic gas produced in a captive gasification unit to power a turbine generator in the plant, thus producing low cost power.

BHEL will float the JV with the Tamil Nadu State Electricity Board for the execution of a 1,600 MW supercritical thermal power project in Tamil Nadu estimated to come up at an investment of INR 8,500 crore. The MoU for the JV was signed in October 2007. The BHEL official said that "We will supply two boilers of 660 MW capacity each for NTPC's Barh stage II power project. The engineering work has already begun and the supply is expected to begin in a year's time." He added that BHEL will invest around INR 10,000 crore to expand manufacturing facilities at Trichi to meet the increased demand.

Similar ventures may also be finalized with Uttar Pradesh, Orissa, Gujarat and Maharashtra. Meanwhile, BHEL has also bagged its maiden orders for super critical boilers from NTPC.

1,000 MW power project in J&K soon – Mr Shinde

It is reported that the power starved Jammu & Kashmir would get a 1,000 MW thermal power project shortly to cater to the demand of power during the winter months when electricity generation goes very low in the state.

Mr Sushil Kumar Shinde union power minister said that J&K would shortly get a thermal power project of 1,000 MW capacity. He added that with the operation of this project, J&K would not be facing power crisis during the winters, when water level goes very low in the snow fed rivers here, badly affecting the electricity generation.

Mr Shinde, however, remained non committal on handing over the 390 MW Dul Hasti power project over Chenab, which was commissioned by Prime Minister Dr Manmohan Singh recently in Kishtwar. He disclosed that a MoU between the power ministry and the state government on construction of 3 more power projects over Chenab in Kishtwar district of Jammu region will be signed within the next week. The projects include 1,020 MW Pakal Dul, Kiru and Karwa.

The Sewa II hydel power project of 120 MW capacity is being constructed over the Sewa river in Kathua. The project will be completed by June 2009. Rotors covering of 3 turbines of 40 MW each at this project were commissioned by Mr Shinde. The project is being constructed by the National Hydroelectric Power Corporation and will cost INR 665 crore.

A top NHPC officer disclosed that with the completion of the Sewa project phase II, J&K will get 12.5% free power out of it. He added that NHPC would be spending INR 3 crore for carrying out development works around the project site for raising economic condition of people of this area besides improving the surrounding environment. Funds would also be spent on road connectivity and constructing a hospital.

Land acquisition norms eased for NHPC Koti in Uttarakhand

It is reported that, in a bid to speed up the National Hydroelectric Power Corporation's 1,000 MW Kotli Bhel Hydel project, the Uttarakhand government has decided to simplify the clause that makes the land acquisition process cumbersome.

A notification to this effect has already been issued by the state government that relates to two villages of Kotla and Pargana Bharsaun in Pauri district, where the NHPC is acquiring land for the second phase of the project. An investment of over INR 5,000 to INR 8,000 crore is proposed in the project, which will be built on the river Ganga in three phases of 320 MW, 195 MW and 530 MW.

Nearly 55 villages are coming under the submergence area of the Kotli Bhel project. The NHPC is facing problems in the acquisition of land in these areas, coming under Tehri and Pauri districts due to various factors. Some social activists had also opposed the project on the rehabilitation and other grounds.

The NHPC was finding the process of land acquisition cumbersome in the light of certain clauses. Similar notifications are also being issued for other villages that come under the submergence area of the project.

Meanwhile, the government is also seeking forest clearance for the project. The officials said that environmental clearance has already been taken in this regard.

Videocon plans multi product park & power plant in AP

A consortium lead by Videocon Industries Limited has come up with a proposal to set up a multi product industrial park and a 1,320 MW thermal power plant in the West Godavari district of Andhra Pradesh.

Apart from Videocon, the other two promoters of the special purpose vehicle Yeswanth Industrial Infrastructure Projects Private Limited are Mr Ramesh Babu Potluri CMD of SMS Pharmaceuticals Limited and Mr T Srinivasa Rao chairman of WhiteField Paper Mills Limited.

Mr Venugopal N Dhoot CMD of Videocon Industries, after a meeting with Dr Y Reddy chief minister of Andhra Pradesh, said that "We have sought 5,000 acres in Perupalem village of West Godavari District and the total investment envisaged is INR 7,600 crore." He added that the CM has invited Videocon to set up a semi conductor unit in the proposed Fabcity on the outskirts of Hyderabad.

GMDC plans entry into cement, power, SEZ and port sectors

It is reported that Gujarat Mineral Development Corporation is planning to leverage its coal control capabilities into a four way business foray into cement, power, SEZ and port in Gujarat. It plans to supply coal to a cement maker in one district and to a power plant in another, both in separate JVs.

As per report, the cement maker would acquire equity in the power plant and also jointly develop a mineral based SEZ and a port with GMDC. Thus, GMDC would have a captive coal customer each in a cement plant as well as a power plant; the power plant would have a captive customer in cement plant and the cement maker would have a captive power plant.

GMDC is setting up a cement plant in JV with Jaiprakash Associates in Kutch district of Gujarat. GMDC and Jaiprakash, which had signed a shareholders’ agreement for setting up a 2.4 million tonnes per annum capacity cement plant in Kutch in January 2007, have now scaled it up to 6 million tonnes per annum. In the first phase, the JV would invest nearly INR 700 crore in the cement project. They have also identified the site for the proposed cement plant near Lakhpat. The plant would be set up in a 500 hectare area, close to village Sinapur.

To power this cement plant, GMDC would have another JV with the Gokul Group to set up a lignite based power plant in Surat district. To facilitate power supply to this cement plant, GMDC has signed a MoU with the Gokul Group to form Gujarat Gokul Power Limited. It would set up a 135 MW lignite based power plant at Tadkeshwar in Surat district. This area has lignite deposits to the tune of 35 million tonnes with a lifespan of 35 years. The power plant would need 1 million tonnes of lignite a year. GMDC would have 26% equity in this power company with a right to buy 75% power and allocate it to the cement project in Kutch.

With this captive power plant and the cement plant, GMDC is leveraging its coal control capacity to turn it into components of infrastructure development, such as power, cement and port.

Fitch assigns 'AAA(ind)' rating to TATA Steel's debenture issue

Fitch Ratings has assigned a national rating of 'AAA(ind)' to TATA Steel Limited's proposed non convertible debenture issuance of up to INR 20 billion.

Fitch has also affirmed the national issuer rating of TSL at 'AAA(ind)' and its commercial paper or short term debt rating aggregating INR 9.75 at 'F1+(ind)'. The outlook on the ratings is stable.

Fitch said that the proceeds of the NCD issuance would be used to prepay some of the indebtedness in TATA Steel UK Limited through the subordinated loan route. It added that this would provide TATA Steel UK Limited with greater flexibility for meeting its higher working capital requirements on account of the prevailing increase in iron ore and coal prices.

BlueScope forecasts surge in profit in second half of 2008

Australia's largest steelmaker BlueScope Steel Ltd announced that its second half profit may increase by 83% because continued demand is driving global price gains.

It said that unaudited underlying profit for the six months ended June 30th may rise to AUD 474 million from AUD 259 million in January to June 2007.

Mr Paul O'Malley MD of BlueScope said that “He expects a good start' to next year's full year profit assuming prices hold their gains. The expected earnings improvement is largely due to continued strong demand and higher global steel prices.”

He added that “Unaudited underlying profit for the third quarter is AUD 169 million and it is expected to be around AUD 305 million in the fourth quarter.”

Brazil steelmakers working at full capacity- CSN

Dow Jones reported Brazilian steel producers are working at close to capacity and the companies need to react to the new pace of growth in the local economy.

Mr Benjamin Steinbruch CEO of CSN during a conference call said that "Brazil is not used to growth, but I am optimistic about the steel market.” He said that the second quarter could be the strongest in CSN's history as the company has all the raw materials bought at old prices, while it will be selling at new, higher iron ore and steel prices.

CSN, in March 2008 raised its hot rolled steel price by 13.5% and was due to raise it by another 8.5% in May. However, Mr Steinbruch said that the price would now rise 15% on May 14, due to a major jump in coal prices. Meanwhile, iron ore delivery contracts were raised by 65% in April. It added that there may be further steel price hikes in July or August 2008.

He also said that CSN is selling a stake in mining company Namisa in order to clear CSN's debts. However, the company is only cleaning the slate ahead of a new wave of investments in the near future.

Mr Steinbruch said that CSN has been approached by a number of steel firms in China and the Middle East to form a joint venture for the creation of a pellet plant in those regions and we are assessing offers and doing the numbers.

Vallourec wants to remain independent

French daily La Tribune reported that French steel tube maker Vallourec wishes to remain independent after financier Mr Vincent Bollore acquired a small stake, prompting speculation he could seek to raise his holding.

Mr Pierre Verluca CEO of Vallourec told French daily La Tribune in an interview that Mr Bollore had built a 2% holding, after previously selling his entire stake and called his move a sign of trust in our strategy."

He told that "I confirm that Vallourec has the technical, financial and human means and the will to continue to develop itself on its own.”

Labor unions side with Mr Zhevago in battle for Kremikovtzi

Bulgarian news agency BTA reported that steel maker Vorskla Steel of Mr Konstantin Zhevago, one of the bidders for Bulgaria's biggest steel mill Kremikovtzi, has signed an agreement with the steelworks' labor unions on May 10th 2008.

The paper quoted the chairman of the Metalurzi Labor Union, part of the Podkrepa labour union bloc, Mr Lyudmil Pavlov as saying that the deal sees Vorskla Steel guarantee the funding that would Kremikovtzi operational, its workers paid and a chunk of the profit invested in the steel mill's modernization.

The agreement is the first time the labor unions picked a side in the race between two rival bidders looking to buy the 71% majority stake held by Indian businessman Mr ramod Mittal.

Mr Zhevago also has the support of the Metalitsi labor union, a member of Bulgaria's other influential labor bloc CITUB, investor.bg reported on the same day.

Ukrainian billionaire Mr Zhevago, who controls London listed iron ore mining producer Ferrexpo, is facing stiff competition from ArcelorMittal.

Ann Joo eying substantial savings from new BF

Bernama reported that steel products manufacturer Ann Joo Resources Bhd's latest technology in iron making using the blast furnace plant to manufacture higher grade steel products will help it save electricity costs by 40% which average MYR 100 million annually.

Mr Datuk Lim Hong Thye executive director of Ann Joo Resources said that the new technology using the blast furnace plant which would help it reap substantial savings in electricity costs would also enable it raise output and be competitive.

He said that the group which borrowed MYR 500 million to part finance its MYR 600 million for the blast furnace expansion, would use China's hot metal technology and boost steel output by an additional 500,000 tonnes.

He added that "With this new plant, the group will be using more iron ore to replace scrap metal as the feedstock to produce higher grade steel products. With the blast furnace plant, we are now slowly moving to higher grade steel, ie engineering steel, where the industry outlook for such steel is believed to be good at least for the next two years.”

Mr Lim Hong said that the move would also help improve steel purity for Ann Joo, which is conventionally a supplier of steel products for the construction industry.

Billet prices cross USD 1000 per tonne

It is reported that a tender of Billets from Ukraine on the weekend has been awarded a USD 1003 per tonne on FOB ST Black sea basis

Nippon Steel and other 4 steelmakers in Japan to cut more costs - Nikkei Says

The Nikkei English News citing industry officials reported that Nippon Steel Corp and four other Japanese steelmakers will more than double cost cuts this fiscal year amid a surge in raw materials prices.

The report said that Japan's top five steelmakers aim to cut costs by a combined JPY 210 billion (USD 2 billion) as compared with the JPY 87 billion they saved in the fiscal year ended March 31st 2008.

The report added that Nippon Steel will aim for a reduction of JPY 100 billion, almost three times the level it achieved a year earlier, by increasing the use of lower grade and less expensive materials. Sumitomo Metal Industries Ltd and Nisshin Steel Co will seek to improve efficiency by cutting marketing and other expenses.

The Nikkei said that surging iron ore and coking coal prices will significantly squeeze profits at steel companies this year. Nippon Steel last month predicted a 41% decline in profit for this year.

American rebar price set to up again

It is predicted that American steel mills’ rebar price for June shipment will be increased due to the rebound in scrap price in May 2008.

However, manufacturers are worried about the increased price will greatly reduce their profit margin. At present, the traders’ spot price of rebar is around USD 1,080 per tonne an increase of USD 66 per tonne compared to last week.

Due to foreign steel mill prices continuing to increase, the American imported rebar price will be the same as the domestic price, following the strong trend of increasing prices.

(Sourced from YEIH.com)

Pig iron prices nearing USD 800 per tonne

It is reported that a Turkish buyer has offered USD 785 per tonne CFR FO for Ukrainian origin pig iron last week end but the proposal was rejected because price considered not in line with expectations of seller.

Recession reports - Japanese output falls at fastest pace in five years

Japan last week announced that its factory output fell at the fastest pace in five years in March amid falling US bound exports. Japanese factory output fell by a bigger than expected 3.1% in March from the previous month, more than reversing a rise of 1.6% in February, the Ministry of Economy, Trade and Industry said.

It was the biggest fall since January 2003 and much worse than the 0.7% decline expected by markets, providing a clear indication that the world’s second-largest economy is losing steam.

Mr Hiroshi Shiraishi of Lehman Brothers said “Industrial production may contract again in the second quarter but we are not expecting a sustained or sharp downturn.”

He added that “If the global economy escapes a severe downturn then Japan should avoid a severe recession, because it is in much better shape than it was during past period of economic difficulties.”

Japan’s corporate sector has been a key driver of the recovery in Japan after a decade long slump as strong export growth gave companies the cash to invest heavily in new production facilities. But with exports to the shaky US economy now declining and a stronger yen hitting export revenues, executives are becoming more cautious about the earnings outlook.

Analyst boosts US Steel profit outlook

Dow Jones reported that an analyst hiked up his profit expectations for United States Steel Corp citing a report in two trade publications that the company had imposed a USD 250 per ton charge on some of its North American contract customers.

Mr Michael Willemse CIBC World Markets analyst, calling the charge major news, raised his earnings expectation for the company to the USD 16.30 a share, the highest among analysts covering the company.

A US Steel spokesman declined to comment, saying the company only discusses pricing with its customers. But Mr Willemse estimated that US Steel is currently charging its contract customers about USD 550 per ton for steel, meaning a USD 250 per ton market adjustment charge would raise prices by 45%.

He added that the higher prices could add USD 3 to US Steel's earnings per share per quarter, based on an estimation that about 9 million tons of steel are potentially subject to the higher prices.

Reports citing US Steel's higher contract prices appeared yesterday in the steel trade publications American Metal Market and Steel Business Briefing.

Law regulating iron and steel sector ignites expectations

Reed Business Information Ltd reported that Mr Hugo Chávez president of Venezuela is waiting for the Supreme Tribunal of Justice to endorse a law regulating iron and steel industries at Guayana in south Venezuela.

The legal instrument recently issued by the Venezuelan government has to be endorsed by Supreme Tribunal of Justice for enactment and publication in the official gazette. It said that the legislation is intended to organize the iron and steel sector and give way to the takeover of Sidor along with its workers.

According to sector's representatives, the enactment of this law has caused confusion and expectation in the iron and steel sector in Venezuela. Uncertainty emerges as in the past the Venezuelan state has moved to seize control of a majority stake in the oil and electricity sectors.

Interseroh AG Q1 turnover up by 21% YoY

The service and raw materials trading group Interseroh based in Cologne has once again increased its turnover and profit in the first quarter of 2008 as compared to the same period last year. The consolidated group turnover rose in the first quarter of 2008 was 20.59%YoY to EUR 527 million as compared to EUR 437 million.

The turnover in the steel and metals recycling segment climbed from EUR 305.9 million to EUR 405.1 million. The services segment contributed EUR 69.4 million to the turnover. The turnover in the business segment for raw materials trading increased from EUR 46.4 million to EUR 61 million. An amount of EUR 8.5 million was consolidated between the segments. The EBT increased from EUR 16.6 million in the first quarter of 2007 to EUR 17.3 million this year, while the EBIT grew from EUR 17.8 million to Euros 19.5 million.

On the one hand, higher prices for steel and metal scrap compared to the same period last year contributed to the strong boost in turnover in the steel and metals recycling segment. On the other hand, the group was able to increase sales quantities due to the purchases of new locations completed in the business year 2007.

Mr Meyers receives steel industry recognition award for leadership

Mr Keith E Busse chairman of American Iron and Steel Institute recognized Mr Michael N Meyers of United States Steel Corporation for his outstanding leadership as chairman of AISI’s Construction Market Committee. The award presentation was made during a ceremony held at AISI’s 116th General Meeting.

Mr Meyers is GM service centers, electrical, agricultural & industrial equipment in United States Steel Corporation’s flat roll products commercial organization. Mr Meyers began his career with United States Steel Corporation in 1974 as a commercial trainee in the company’s Kansas City sales office. Over the years, he advanced through increasingly responsible positions in U.S Steel's sales and marketing organizations. He earned bachelor's degrees in business and economics from Lehigh University in 1974.

Mr Robert J Wills PE AISI’s vice president of construction market development said that “Mr Mike’s leadership has been critical over the years in developing and implementing the strategic business plan for the Construction Market program. He played an important role in developing and launching the Steel Framing Alliance, but his leadership through the Construction Market Committee has positively influenced all segments of the steel industry. We appreciate the enduring contributions that Mike has made to our industry and to the establishment of a strong residential and commercial steel framing presence in the marketplace.”

AISI’s Construction Market program is supported through the investment of the following member companies:
1. AK Steel Corporation
2. ArcelorMittal
3. ArcelorMittal Dofasco
4. IPSCO Inc.
5. Nucor Corporation
6. Severstal North America Inc.
7. Steelscape, Inc.
8. United States Steel Corporation
9. USS-POSCO Industries

Scrap suppliers cashing in on high demand

bizjournals.com reported that scrap metal suppliers are riding a wave of record price increases, caused by higher worldwide demand for steel and the devalued dollar.

Mr Keith Rosen vice president of finance for Atlantic Scrap & Processing in Kernersville said that "We are at levels we have never seen before in the history of this business.” He said that the price that shredding companies receive for ferrous scrap has doubled since November 30th 2007, from USD 250 per gross ton to USD 505, according to current American Metal Market figures. Prices for other metals, including copper and aluminum, also have risen sharply.

Mr Junaid Ahmed manager of Triad Auto Salvage in Winston Salem, said the price he receives per hundred pounds for crushed cars has gone up about 100% in the past year, from USD 5 to USD 6 to USD 10 to USD 12 per hundred pounds.

He said that Triad Auto Salvage crushes about 100 vehicles purchased from auto auctions each month and sells them to shredding companies, including Atlantic Scrap. Each week, the company sends three or four loads of cars, weighing anywhere from 37,000 to 40,000 pounds, to the shredder.

Mr Ahmed said that the higher proceeds for the crushed cars are allowing the auto salvage yard to add several storage buildings where it can house additional auto parts.

According to industry figures, for years, US companies have relied on domestic and international steel producers to fill demand. With the dollar's decline, US companies are importing 60% to 70% less steel and foreign companies are seeking to buy more at the more favorable exchange rates.

Vestas to build wind turbine factory in Colorado

Vestas Wind Systems announced that it intent to build the world's largest wind turbine tower factory in Colorado. The announcement came though its first quarter financial report, posted on its Web site.

Vestas’s company officials, however would not discuss whether the plant will join its current facility in Windsor in the Great Western Industrial Park.

Mr Craig Cox executive director of Interwest Energy Alliance in Denver, which represents Vestas along with other wind companies, said that Vestas remains tight lipped about the actual location of the plant. He said they are possibly waiting until the annual wind conference next month in Houston to add the final location to its announcement.

Cox said Gov Bill Ritter's leadership in the push for more renewable energy in the state continues to make Colorado the leader in wind power. He said that "It shows that they must be pleased with the plant and the reception they've gotten in Windsor.”

UK Summit Steel expands

It is reported that UK Summit Steel has moved into new, bigger and more convenient premises just outside Maidstone in Kent. The move was necessitated by the massive expansion in Summit's equipment stock over the last 12 months, reflecting a healthy growth in the working schedule.

The new warehouse and offices will consolidate all the equipment stock including James Thomas trussing, ground support systems, Lodestar Motors and Summit's own SmarTmast small footprint PA towers in one location.

The warehouse will have easier access for more trucks up to five at a time and geographically, Coxheath is well located for major motorways and road routes.

Yangming Marine to expand its fleet from 96 to 125 ships

It is reported that Taiwan's Yangming Marine Transport Corp is planning to expand its fleet from the current 96 vessels to at least 125 by the year 2012.

Yangming in a statement said that “We have placed orders to build new ships and have signed lease contracts in order to expand and improve service, including launching new Far East-Europe/US routes.”

The statement added that Yangming has placed orders with Taiwan's China Shipbuilding Corp to build 17 ships, mostly container vessels. Of these, 10 will be container ships, from 4,250 to 82,000 TEUs and will be delivered in 2008 and the rest delivered before 2012.

Yangming has also signed 5 to 10 year contracts to lease container ships from foreign ship owners.

Yangming one of the world's top container shipping lines, currently has 96 vessels, 87 container ships and 9 bulk carriers.

Steel plant in Whitley starts again

The Journal Gazette reported that a defunct steel plant in Columbia City is back up and running after a group of investors bought its assets.

The report said that Fort Wayne based EMA Acquisition LLC bought the assets of the former Eagle Metal Abrasives plant in Columbia City at an asset auction in November. EMA Acquisition named the plant Indiana Metal Products LLC.

Mr Ken Kinsley president of Indiana Metal Products said that Eagle Metal Abrasives, which started production in September 2006, operated for only a few months before going out of business.

He added that “On March 18, the new company began producing steel shot, tiny pellets used by foundries and shipyards during metal production. Indiana Metal Products has nine employees and expects to add six more by the end of June.”

New capacity boosts pipe output of Rich Asia Steel

It is reported that Thailands Rich Asia Steel Plc, a structural steel pipe manufacturer expects its increase in production capacity should boost sales by THB 3 billion a year.

As per report Rich Asia has installed new machines, which can increase its capacity from 125,000 tonnes to 215,000 tonnes a year. It said that the new capacity should earn THB 3 billion this year from the additional capacity.

EC backs Kyoto CO2 trading reform

Reuters reported that the European Commission is standing by a call to overhaul UN led carbon trading rules to make it more difficult for developing nations to earn offset credits from cutting greenhouse gas emissions.

At present, rich countries can meet their own carbon emissions limits under the Kyoto Protocol by investing in clean energy projects in the developing world.

Mr Peter Zapfel a senior official in the EU executive body's environment department on the sidelines of a carbon markets conference in Germany said that the scheme called the Clean Development Mechanism needs reform after 2012, when the first round of Kyoto expires. He said that "You have the CDM in one corner, which is voluntary per project with credits for everything you reduce. And then in the other corner, you have the EU carbon market, which has several sectors under one arrangement, they're all mandatorily covered and they actually have to reduce emissions and respect the cap before they can have free allowances."

Mr Zapfel said that the reforms should include a sectoral approach to emissions reductions, setting varied quotas by industrial sector and polluters should first have to make cuts against a minimum standard before they're awarded free credits for further reductions.

Mr Yvo de Boer head of the UN's climate change secretariat, agreed that the CDM framework could be improved, but said that it must be done gradually, with the aim of maintaining balance between business and environmental interests. He said that "There may be a temptation to burn the CDM rulebook and get rid of all the perceived bureaucracy but it's important to remember the CDM's importance and credibility.”

According to a World Bank report published at the conference, the CDM market was worth some USD 13 billion in 2007.

New Zealand scrap metal industry under threat

New Zealand Herald reported that New Zealand's billion dollar scrap metal industry will lose out if Green MP Nandor Tanczos' Waste Minimisation Bill goes ahead. The bill, which is due for its second reading on May 21, calls for a levy on every metric ton of waste sent for disposal. It is intended to deter wasteful behavior and to provide funding for new waste minimization initiatives.

But Mr Trevor Munro president of the Scrap Metal Recycling Association said that increased costs for dumping waste will fall back on those who have always recycled it for profit. He said that "While there will inevitably be an increase in post consumer scrap for our industry, this will be counteracted with the increase of waste that must be disposed of and due to the increase in costs for this, and the effect will be detrimental to our industry."

He said that the bill would see scrap metal dealers in New Zealand become less competitive than their foreign counterparts. He added that "New Zealand already has the highest landfill costs in Australasia without the waste levies and unfortunately in order to recycle metals we must handle non recyclable wastes."

Mr Munro said that the new collection and recycling methods have also raised the amount of scrap received. But there has been a decline in post industrial scrap due to the closure of large manufacturing plants such as Fisher & Paykel.

Scrap metal is the 17th largest export earner for New Zealand. Around 500,000 tonnes of ferrous and 50,000 tonnes of non ferrous scrap metal is generated each year.

Hadeed production in Q1 surges by 38% YoY

Arab steel reported that production of the Saudi Iron and Steel Company during the first quarter of 2008 amounted to 1.342 million tonnes of long and flat products up by 38.2% YoY as against 0.971 million tonnes during the first quarter of 2007.

The volume of its sales during the first quarter of this year amounted to 1.381 million tonnes up by 24.5% YoY as against 1.027 million tonnes in the January to March 2007 quarter.

Its sales to the domestic market accounted for 93% of its total sales during the first quarter of long products while the sales of hot rolled products account for 50% of the total production which amounted to 524,392 tonnes during the first quarter of 2008, that is, up by 294% YoY.

Hadeed during this year increased the quantities of its production of cold rolled, galvanized and coated products because a major part of these products has been channeled to the domestic market, while the remaining quantities have been exported.

Praxair wants to enter UAE

Reuters reported that the largest industrial gases supplier in US, Praxair, is looking to expand its integrated business model into the UAE, which along with some other Gulf countries, has seen its economy grow rapidly on the back of windfall oil revenues.

Mr James Sawyer CFO of Praxair declined to say when the foray into the Middle East would occur, but said the company is more interested in supplying a range of industries, rather than setting up one plant that caters to the needs of a single refinery. Mr Sawyer said that "When we operate an integrated business, we can get a very high return on capital. If you just go over and build a single plant for a single customer, you can not get as high a return on capital," Sawyer said.

In the United States and elsewhere, Praxair runs a packaged gas business selling gases in cylinders. It also has a merchant gas business that supplies it via tankers and an on-site business that usually sets up adjacent to a customer's manufacturing facility. It supplies a range of industries from energy to health care, and the gases it produces are used in applications such as metal fabrication, beverage carbonation and petroleum refining.

Pakistan to get USD 148 million gas transit fee from India

The Dawn reported that Pakistan hopes to soon conclude an agreement with India on the transit fee for transmission of natural gas from Iran to India through a gas pipeline running through its territory.

As per report, Pakistan expects India to agree on 40 cents per million British thermal unit transit fee for the Iran Pakistan India gas pipeline, generating around USD 148 million per annum from India.

Mr Khawaja Asif Pakistan’s petroleum minister said that ''Progress has been made on the gas transit fee issue between India and Pakistan and the two countries would soon sign the gas transit agreement.'' He added that the two countries have completed 5 to 6 communicative exchanges during recent days and all matters regarding the gas transit fee agreement would be settled within the next few days.

The Iran Pakistan India gas pipeline project plan got a shot in the arm when the Iranian president made a brief stop over in Delhi last week on his way to Sri Lanka.

Update on cement sector in Egypt

Egypt has long been a major source of natural resources like limestone and natural gas, among others that make up the key components of a thriving cement industry. Buoyed by low cost skilled labor, close proximity to high demand European markets and an emerging local economy, Egypt sits alone atop the regional cement production and export business.

Cement production in 2007 reached an estimated 38.5 million tonnes per annum in Egypt, while local consumption peaked at 34.5 million tonnes per annum in the same year, leaving the industry scrambling to meet local as well as overseas demand.

Egypt has 11 privately owned cement companies and one state owned producer namely National Cement Company. Several of the private companies are large multinationals, like Italcementi, Helwan and Tourah. Another major player is Lafarge, Alexandria Cement and Egyptian Cement. Italcementi and its subsidiaries produce some 11.4 million tonnes per annum of cement, while Lafarge accounts for 13.5 million tonnes per annum in output.

A construction boom, led by a number of high end resort and residential projects, has fueled local demand. In an attempt to curb the exponential increase in domestic prices, the government imposed export tariffs of EGP 65 per tonne on all cement shipped out of the country. When many exporters decided to take the tariff hit and continue sending their cement abroad, the export duty was raised again to the tune of EGP 80 per tonne.

The industry is poised to grow exponentially over the next four to five years. Last year alone, 14 new cement licenses were issued, worth some USD 3.3 billion, analysts expect that it will take at least three years to bring the new plants online. Existing industries are also planning expansions, with a predicted increase in total capacity of about 5 million tons in 2009.

The rewards of increased production, however, will be offset by the elimination of energy subsidies over the coming years. Cement producers and other industries will pay steadily higher natural gas and electricity prices; by 2010, the nation’s 40 largest energy consumers will pay market price; all industrial consumers will follow suit in 2013.

(Sourced from Business Today)

IPI & TAPI to change the economics of South Asia

Today’s Zaman reported that there are two important natural gas pipeline projects which, if realized, might change the politics and economics of South Asia. The first is the Iran Pakistan India and the second is the Turkmenistan Afghanistan Pakistan India project.

First proposed by Iran in 1994, the IPI has been bedeviled by delays, US opposition and most recently because of disagreements between India and Pakistan over transit fees and security concerns.
Work on the approximately 2,775 kilometer long pipeline will begin in 2009 and will be completed by December 2012.

It is expected to supply 60 million cubic meters a day from Iran's South Pars field to be shared equally by Pakistan and India. The route of the pipeline has been altered at the insistence of India for security reasons. It will enter Pakistan near Gwadar and move along the highway to join the transmission system near Nawabshah.

The original TAPI project started in 1995, when an inaugural memorandum of understanding between Turkmenistan and Pakistan for a pipeline project was signed. In 1996 the Central Asia Gas Pipeline Limited consortium for construction of a pipeline, led by American company Unocal was formed. On October 27th 1997, CentGas was incorporated in formal signing ceremonies in Ashgabat, by several international energy companies along with the government of Turkmenistan. In January 1998, the Taliban, selecting CentGas over a Brazilian competitor, signed an agreement that allowed the proposed project to proceed. In June 1998, Russian Gazprom withdrew from the project followed by Unocal on December 8th 1998, after which the project was shelved and forgotten for three years.

The 1,680 kilometer TAPI pipeline will run from the giant Turkmen Dauletabad gas field to Afghanistan. From there it will be constructed alongside the highway running from Herat to Kandahar, and then via Quetta and Multan in Pakistan. The final destination of the pipeline will be the Indian town of Fazilka, near the border between Pakistan and India. The pipeline will be 1,420mm in diameter with a working pressure of 100 atmospheres and a capacity of 33 billion cubic meters of gas annually. The cost of this long infrastructure is estimated at USD 6 to USD 7.5 billion.

Oman undertaking expansion project at Port of Shinas

It is reported that Oman is undertaking a massive expansion of the country's port facilities as part of a larger program aimed at boosting its transport infrastructure to support trade and tourism. On April 27th 2008, the Omani government invited bids from engineering consultants for a feasibility study on the planned development of the Port of Shinas in the Batinah region.

Though preliminary work has already been carried out at Shinas, with a dredging project in 2002 deepening the harbor's basin to 4 meters, existing infrastructure precluded the loading and unloading of larger ships, thus limiting the port's usefulness. The contract for the provision of consultancy services, which is being overseen by the ministry of transport & communication, is ultimately linked to the design and construction of a new port, with the aim of developing Shinas as a trade gateway for the north of the country, as well as serving to encourage investment in the region.

Envisaged at Shinas is the development of warehousing facilities and either a free trade zone or a special trade zone to help stimulate industry in the region. Having a direct shipping outlet in the area will assist the copper mines of Shinas and nearby Hatta, which between them have an estimated 4 million to 6 million tonnes of extractable ore with 2% copper content. As one of the few Gulf States with extensive mineral resources other than oil and gas, Oman has also seen the need to build ports for the specific needs of the industries in various areas.

In this regard, there are plans for the port of Shinas to serve as a terminal for high speed ferries running to Khasab, the Omani enclave on the Musandam Peninsula. The port will also be linked by a new coastal highway running from the Port of Barka further down the Batinah coast, through the industrial Port of Sohar and on to the border with the United Arab Emirates. The Port of Barka has been earmarked for development into a logistics hub, with facilities large enough to handle container shipping and customs services.

Pak cities need USD 10 billion for infrastructure – WB

World Bank has estimated that Pakistan’s cities require USD 5 billion to USD 10 billion for improving water, sanitation and solid waste management facilities in order to meet its future challenges.

Mr Mihaly Kopanyi senior infrastructure specialist at World Bank said that "The World Bank is ready to provide financing on the basis of demand, but the private sector will have to be involved to improve municipal services in major urban centers." He added that the WB was working along with Pakistani authorities to devise an institutional mechanism to improve infrastructure in five major urban centers of Punjab including Lahore, Gujranwala, Multan, Rawalpindi and Faisalabad.

On the basis of his research done in a few districts of Punjab, the WB official said no reliable data is available to analyze the situation that exists on the ground related to provision of water, sanitation and solid management.

Mr Ijaz Ahmed Khan CEO of IPDF said that Pakistan requires USD 100 billion for meeting infrastructure related challenges in the future. elaborating on the USD 100 billion need, he said that Pakistan requires USD 22 billion for multipurpose water reservoirs, throw forward of infrastructure projects which are USD 20 billion, maintenance backlog USD 10 billion, other energy projects USD 18 billion, transport and communication USD 16 billion, urban mass transit USD 4 billion, municipal services USD 2.5 billion and health and education USD 4 to USD 5 billion.

Mr Ghafoor Mirza advisor at ministry of finance said that "The Government of Pakistan realizes the need to fill gaps between the demand and supply of infrastructure in a manner that leverages private resources as far as possible and yields optimum benefits for every rupee that the government spends,”, in his opening remarks at the inaugural session of the workshop.

Mr Mirza said that the government of Pakistan has established IPDF under the umbrella of the ministry of finance, in order to develop a comprehensive public private partnership program for generating growth and closing gaps between the supply and demand of the infrastructure requirements of Pakistan.

ADB releases USD 214 million to Pakistan for reconstruction

The Asian Development Bank has released USD 214 million to the government of Pakistan under the Earthquake Displaced People Livelihood Restoration Program. The ADB said the amount is the second tranche of a USD 400 million loan aimed at helping Pakistan meet the rebuilding cost of about 585,000 rural houses damaged or destroyed in the earthquake.

Mr Peter Fedon country director of ADB in Pakistan said that "The funds being provided to the Earthquake Displaced People Livelihood Restoration Program will help expedite disbursement of housing compensation to the earthquake affected families and will enable people to complete reconstruction of their damaged and destroyed houses during summer."

He added that "We are committed to supporting the government’s efforts in meeting the reconstruction challenge all the way through, building on the strong momentum in the reconstruction process and we will continue to assist Earthquake Displaced People Livelihood Restoration Program until the job is done."

The ADB pledged USD 1 billion for reconstruction and rehabilitation, mainly in the housing, power, health, education, transport and social protection sector. To date, ADB has committed about USD 820 million in loans and grants and leveraged another USD 100 million in the form of bilateral grant funds from its co financing partners Australia, Belgium, the European Union, Finland and Norway.

Mr Shaukat Shafi senior ADB project implementation officer said that rebuilding of over half a million destroyed or badly damaged rural houses was a phenomenal challenge, however, the decision by the government to provide a PKR 150,000 housing grant to each affected family has been a major successful initiative. He added that "The decision to let people take charge and build their own houses has been extremely useful in terms of assisting people in rebuilding their houses based on their own needs and time frame and using seismically compliant designs approved by ERRA."

Pakistani cement sales in 10 months up by 24% YoY

Pakistan’s cement sales during the July 2007 to April 2008 depicted an increase of 24% YoY to stand at 24.5 million tonnes due to growing local demand and increasing cement shortage in the region leading to higher exports.

According to the cement dispatches report prepared by JS Capital Research, export sales have shown a commendable increase of 142% while local dispatches saw a rise of 8% during the period. Similarly, a 23% YoY growth was witnessed in April 2008, mainly driven by a 157% surge in exports and 1% increase in local cement sales.

Cement exports are expected to remain buoyant as significant cement shortage exists in regional countries like India and the UAE, while South Africa is looking to import cement in order to meet its demand and to check rising cement prices. Local cement sales are also likely to pick up due to private sector projects and infrastructure development.

On the contrary, on a month on month, total cement sales have shown a decline of 16% MoM in April 2008. Exports have decreased by 11% MoM and local sales have shown a dip of 17% MoM. This considerable decline in cement dispatches during April 2008 is attributed to the seasonal slow down in construction activities during the harvesting season. Labor force as well as transportation is not available in the harvesting period that causes construction activities to decline, negatively impacting the cement demand.

Chinese HRC prices inching towards USD 1000 FOB levels

It is reported that the hot rolled steel coil prices will continue to move up on in China and the increase is expected to maintain for at least four weeks.

On Shanghai market, commercial HRC in 4.75mm to 11.5mm thickness in 1500mm width was being offered at CNY 5650 per tonne to CNY 5680 per tonne and in 1800mm width material at CNY 5900 per tonne, whereas low alloyed 7.5mm thick HRC goes at CNY 5750 per tonne while 11.5mm thick HRC has jumped to CNY 6000 per tonne.

Export prices are also bullish at moment. Prevailing offers for commercial thick gauge hot rolled steel coil are at USD 930 per tonne to 950 per tonne FOB and some even have jumped to USD 960 per tonne to USD 980 per tonne on FOB basis. There is strong likelihood that quotations are going to reach about USD 1000 per tonne FOB if domestic price rise to CNY 6000 per tonne.

Despite high export offers, transaction prices only see small increases. Most SS400 or Q235 HRC exports are being concluded at around USD 900 per tonne on FOB basis for shipments to South Korea, Japan and South East Asia. While delivery to the EU normally requires higher price. Italy is said to be the hot destination in Europe for Chinese HRC exports. A North West China based steel makers told Mysteel that it has just concluded 15000 tonnes to 20000tonnes S275JR HRC exports to Italy at USD 920 per tonne to USD 930 per tonne on FOB for July shipment.

Trading sources say that there have been fewer shipments to South East Asia following dramatic imports. Some traders are transferring the former signed HRC to other areas by quoting FOB South East Asian ports. It is noticeable that whether South Korea and the EU would continue to purchase Chinese HRC at updated prices. If transactions start to decrease sharply since May, the upward trend of HRC export price probably would pause in the near future.

(Sourced from MySteel.net)

CITIC Pacific to double special steel output

Hong Kong based conglomerate CITIC Pacific aims to double its production capacity of steel through acquisitions and refined technologies. At the company's annual general meeting yesterday, management of CITIC Pacific said that the company will strive to maintain its leading position as the mainland's largest special steel manufacturer.

To bolster the capacity of its existing special steel projects, CITIC Pacific announced that it has set up a separate company to consolidate the management of the three special steel factories currently under the group.

Mr Larry Yung Chi-kin chairman of CITIC said that "The new organization will oversee the management of our special steel factories in Jiangyin, Huangshi and Shijiazhuang.”

The Beijing-backed company took in HK$2.2 billion in profits from its special steel business last year.

Mr Peter Lee Chunghing deputy MD of CITIC Pacific said that the current combined capacity of the three special steel factories is 7 million tonnes a year. He said that "In the long term, we hope to increase that number to 15 million tonnes a year.

He said that the group will increase its output by utilizing better technologies. However, to further expand the group's market share, Mr Lee said CITIC Pacific might consider acquisitions.

Chinese plates export prices remain firm

Steel plate export market is still quite strong in China and prices are expected to keep at a high level this month. The strong demand and high cost are bolstering the upward trend and it is not going to alter in the short term.

Chinese domestic plate price is always edging up steadily, though by small range. On Shanghai market, 16mm plate by Yingkou Steel is being quoted at CNY 6430 per tonne as compared with CNY 6200 per tonne for similar products by tier two producers. Low alloyed 40mm plate was at CNY 6950 per tonne.

Export quotation for commercial plate by tier two steel maker was at about USD 1130 per tonne to USD 1150 per tonne on FOB basis up by USD 30 per tonne to USD 40 per tonne than late April. By comparison, that by tier one steel producer is around USD 1180 per tonne to USD 1220 per tonne on FOB basis.

Though transaction is not ideal, steel makers are still confident that prices would continue to go up. Currently, ship plate and high end plates account for most part of steel exports from China due to much higher profits.

Ship plate by tier two steel makers are being offered at USD 1180 per tonne to USD 1250 per tonne on FOB basis while that by tier one producer is at USD 1280 per tonne to USD 1320 per tonne on FOB basis. A Jiangsu based major steel maker told Mysteel that it has concluded 50,000 tonnes ship plate exports to South Korea at USD 1250 per tonne on FOB basis as base price for 12mm to 40mm thickness in 2000mm to 4800mm width for July shipment. Tianjin Steel indicated that it is quoting ship plate at USD 1180 per tonne to USD 1190 per tonne on FOB basis for July shipment.

(Sourced from MySteel.net)

Lianyungang completed domestic trading platform

It is reported that Lianyungang Zhong Chu steel market, built by Lianyungang Zhong Yuan Investment Company was formally opened, which indicated that Lianyungang International Steel City, the direct trading center which was the largest in northern China and the first one in domestic market, formally located in Banqiao industrial park.

The steel city is about 250 acres with the expected investment of CNY 1.5 billion, which is the first ”five-in-one” platform for direct trading, that is the platform of finance, business, trade, processing and life. When finished, it will be able to provide services for settled enterprise like loan guarantees and capital operation, the e-commerce and trade communication of major steel corporate headquarters, steel products supply and marketing business transactions, the processing and distribution of products by settled steel enterprises, as well as food, clothing, housing, transportation, entertainment, and other kinds of services.

It is said that the project will be started in August, which will be divided into three stages and it is expected to be finished in 2012, when it will be the important base for domestic steel trade.

The presently opened platform of the first stage has already got the registration of 27 steel companies including BHP Billiton, all of which have settled in Zhong Chu steel market with the total registration capital reaching CNY 180 million. The planning and construction of this project will form a high end steel base, which combines e-commerce, finance, processing, distribution, warehousing and logistics into one.

Jinan Steel successfully produced RH ultra low carbon steel

It is reported that Jinan Iron and Steel Company‘s third steel making plant successfully produced RH ultra low carbon steel and has produced total of more than 10,000 tonnes.

As per report Jinan Iron and Steel Company has laid a foundation for Jigang to optimize the products structure and enter into ultra low carbon steel market.

Shougang Supply and Nantong Jiangdong become strategic partners

It is reported that on May 4th 2008, Shougang Supply Company and Jiangsu Province Nantong Jiangdong Carbon signed strategic cooperation agreement which is about ultra-high-power electrode resources. Shougang LF furnace ultra-high-power electrode needs have stable resources and prices ensure, it is the third strategic cooperative agreement signing with the materials suppliers for Shougang after signing with petroleum China and petrochemical China.

Nantong Jiangdong Carbon Company is China’s important carbon product manufacturing enterprise, mainly produce ultra-high-power electrodes, special graphite products, carbon materials manufacturing, sales and related products in research and development, nearly produces 50,000 tons products every year. It is also the main supplier for Baosteel, Anshan Steel, Hansteel, Hanggang etc.

The signing of this agreement on one hand can stabilize the resources and prices, ensure the normal production of Qiangang, Shouqin, Shougang’s second steel-making plant Lf furnace, on the other hand expressed the in-depth cooperation between the two sides.

NYK orders for 2 ultra large iron ore carriers from Dalian COSCO

SeaTradeAsia reported that Nippon Yusen Kaisha has ordered two ultra large 300,000 DWT iron ore carrier new buildings for delivery in 2013 from Dalian COSCO Shipbuilding Industry.

NYK's ore carrier backlogs have grown to 14 units, comprising six each of 300 type and 250 types and two 230 types.

Since NYK already has five existing ore carriers and two such ships converted from single hull VLCCs, the operator will have the world's largest ore carrier fleet with more than 20 ships, including the 14 ships remaining on order.

China plans electricity line from Qinghai to Lhasa

China is preparing to build an electricity transmission line from Qinghai to the Tibetan capital of Lhasa, running in the same direction of the world's highest railway that links the two places.

The line starts from Golmund in Qinghai province and ends at Lhasa. The Qinghai-Tibet electricity route is a 500 KV power transmission line, with the first phase project target of transmitting 6.5 billion kwh annually.

The 1,100 kilometer long line, billed as the world's first electricity transmission line above the 5,000 meter altitude, is to be completed in 2010.

Three Gorges project reduces greenhouse gas emission

Xinhua reported that Three Gorges Project, the world's biggest hydroelectric plant, has helped China reduce emitting 200 million tonnes of carbon dioxide as of Friday.

According to the China Three Gorges Project Corporation, the power plant has generated 223 billion kwh of electricity since its first generating units began operation in 2003, also avoiding the emission of 2.29 million tonnes of sulphur dioxide, as coal fired power plants would have burned about 90 million tonnes of coal to produce the same amount of electricity.

It added that improved navigation capacity along the dam area also contributed to reduction in energy consumption and greenhouse gas emission.

The Three Gorges, which consist of the Qutang, Wuxia and Xiling gorges, extends for about 200 kilometers on the upper and middle reaches of the Yangtze River, the longest in China. They are a popular tourist destination, known for their natural beauty and historical and cultural relics.

China launched the Three Gorges Project, a multifunction water control facility, in 1993, with a budget of USD 22.5 billion. According to the original plan, the project requires the construction of key facilities, including a gigantic dam, a five tier lock, a ship lift and 26 turbo generators. It has involved the relocation of at least 1.2 million residents. The 26 turbo generators 14 on the northern bank and 12 on the southern bank have a designed annual capacity of 84.7 billion kwh of electricity. To date, workers have completed installation of 22 generators on both banks of the Yangtze.

Interpipe pipes output in Q1 up by 12% YoY

Interpipe, a leading producer of steel pipes and railway wheels has announced results for the first quarter of 2008. According to preliminary results, Interpipe has recorded 12% YoY growth in pipe production volumes up to 328,000 tonnes in the first three months of 2008 against 292,000 tonne sin January to March 2007.

In first quarter of 2008, railway wheels production volumes decreased by 21% YoY to 46,000 tonne due to a major overhaul of Interpipe's railway wheels shop, which lasted for 25 days.

Mr Fadi Hraibi director for product and resource management at Interpipe said that "In the first 3 months of 2008 Interpipe significantly increased sales on the CIS, North American, Middle East and North African markets.”

He said that “The growth in production volumes is explained by the mastering of API PSL2 pipe production at Interpipe NMPP and the launch of its continuous manufacturing regime. The opening of a sales office and warehouse in the United Arab Emirates also contributed greatly to Q1 success".

Interpipe is a global producer of steel pipes and wheels, one of the fastest growing producers in Eastern and Central Europe. With annual turnover in excess of USD 1.4 billion, Interpipe produces 2% of the world's seamless pipes and 12.8% of railway wheels.

ArcelorMittal Kriviy Rih crude steel production dips in 4 months

Interfax reported that Ukraine's biggest steel producer ArcelorMittal Kriviy Rih reduced roll production tentatively 2.6% YoY to 2.335 million tonnes in January to April 2008.

Arcelor Mittal Kryviy Rih told Interfax that production of crude steel fell by 5.6% to 2.614 million tones, pig iron by 5.5% YoY to 2.333 million tons and sinter by 7.2% YoY to 3.787 million tonnes in the quarter.

Construction of steel mill at OMK Vyksa nearing completion

It is reported that construction of a steelmaking and rolling facility is proceeding to completion in the Vyksa District of Russia.

As per report pipe manufacturers from the OMK’s Vyksa Steel Works put great hopes on the new production the facility commissioning will enable to provide pipe welding shops of Vyksa Steel Works and Almetyevsk Pipe Plant with high quality hot rolled coiled stock for manufacture of small and medium diameter pipes.

Vyksa Steel Works will be the first in Russia to manufacture hot rolled coils from thin slabs caster technology. The capacity of facility’s first stage will be 1.2 million tonnes of coils per year.

Mr Konstantin Pityul of Vyksa Steel said that "The project is complicated and unique in terms of its implementation period and the technologies used. In former times, construction of such facilities in our country took up to five years, it has been constructed less than for three years. I think it'll be right to say that the facility has already been constructed. At present time, they are carrying out cold tests of the equipment at the plant's workshops."

The international team engaged includes the general contractor Turkish Endustri, the supplier of equipment Danieli, dozens of Russian companies and of course, OMK specialists.

Vitkovice delivers plates for new underground station in Prague

It is reported that Strizkov station in Prosek will be inaugurated on the extended line C of the Prague Underground, as it is the first of three to complete the new line.

Evraz Vitkovice Steel delivered a total of 1 000 tonnes of plates for this construction.

The station is considered one of the most interesting construction of and has gained many awards during its construction. The building of the extension of line C in Prague from Ladvi station to Letnany station began in 2004. The line has three stations and the total stretch of 4.6 kilometers runs solely in tunnels. The station is unconventional and very interesting due to its hanging glass construction in the shape of a whale, which despite its size appears light and airy. The construction is about 228 meter long. On the side of the station there are platforms, as well as various bridges, rope suspensions, fountains and pools. Above ground there is also a parking lot with 200 parking spaces.

The investor of the whole project is Dopravní podnik hlavního města Prahy AS and submitter Inženýring dopravních staveb AS and the contractor is Sdružení metro IV C2.

Russian aluminum export to non CIS market grows by 15%

Russia exported 1.03 million tonnes of aluminum to the non CIS region in the first quarter of 2008. Export of aluminum in the first quarter went up by 15% YoY as compared with that of first quarter of 2007.

On the other hand, the sum of the aluminum export rose by 21.3% YoY to USD 2.05 billion as compared to that of the same period of time last year.

Gazprom shares surge by 6% after Mr Medvedev inauguration

Itar-Tass reported that following inauguration of President Mr Dmitry Medvedev on last week end, market quotations of the Russian gas giant Gazprom went up 6% at Moscow exchange markets.

Analysts say this growth has a direct link to Mr Medvedev's accession to the presidential office, as he for many years was chairman of the Gazprom board of directors.

The current value of Gazrpom's assets stands at RUB 8.28 trillion rubles or USD 347.6 billion. Its capitalization has now outstripped the leaders of global industries like China Mobile and General electric.

RusAl sees Glencore as Russneft partner

The Moscow Times reported that Mr Oleg Deripaska wanted to form a partnership with Glencore International, the world's largest commodity trader to run Russneft.

Mr Deripaska requested approval from the Federal Anti Monopoly Service to buy Russneft last year through his holding company, Basic Element. He said that permission from the service could take several more months.

As per report, Mr Deripaska wants to use the oil company as the basis for a petrochemical venture with an unidentified foreign partner.

Glencore based in Switzerland, is seeking separate anti monopoly approval to buy shares in production subsidiaries of Russneft.

Surgutneftegaz 2007 revenue up as production declined

Bloomberg reported that Russia’s Surgutneftegaz increased its net revenue in 2007 by 15%, earning RUB 88.6 billion (USD 3.8 billion) according to Russian accounting standards.

The figure was released after a Surgutneftegaz shareholders meeting last week. It also reported that its capital investment in oil production grew by one third as it was struggling to prevent a major drop in output. It amounted to RIB 86 billion or almost as much as its profit last year.

Surgutneftegaz and analyst said it produced 64.5 million tonnes in 2007, registering a decline of 1.6%.

Market scenario for chrome in China

Cr series alloys markets have been running on a high track since the year beginning and ferrochrome price has presented overwhelming upswings in the January to April 2008 period, spurred by both robust demand and increased cost.

Ferrochrome markets accelerated the uptrend in March 2008 as supplies of ferrochrome and chrome ore concentrate from South Africa dropped sharply, breaking the balanced supply and demand relationship. The supply short for high carbon ferrochrome swelled rapidly and drove up prices at home and abroad.

High carbon ferrochrome price continued the uptrend in April 2008. Producers and traders raise prices notably in view of high prices offered by stainless steel makers in early April 2008. Domestic price rose to CNY 16,250 per tonne in the month end with record high monthly growth of CNY 3,000 per tonne. Rocketing price can be attributed to robust demand from downstream industries.

As for market operations in May 2008, most analysts believe that ferrochrome market will face some adjustments. Downstream users can not recognize current price hikes owing to uncertain stainless steel market. Besides, small hydropower stations will indicate low costs in Southwest China during the high water period and will hinder swift price increase of ferroalloy products or even trigger some market adjustments.

(Sourced from MySteel.net)

Hans Kohler to supply SS equipments for Swiss railway tunnel

HS Frech Hoch AG of Switzerland announced that it supplies 136 containers, made from Outokumpu stainless steel, for a Swiss railway tunnel to house electromechanical equipment under demanding environmental conditions.

The 34.6 kilometer tunnel connecting Frutigen and Raron in Switzerland through an Alpine peak was officially opened for regular traffic in December 2007, enabling high speed train travel through the Swiss Alps. In 2008, trains will travel at speeds up to 200 kilometers per hour through the tunnel, designed eventually to speed up to 250 kilometers per hour. This dual tube, single track tunnel is operated with the help of 101 transverse tunnels connecting the tubes. These connections house the tunnel’s electro mechanical infrastructure, as well as serving a safety function fitted with stainless steel fire safety doors. The electro mechanical equipment is built into 136 stainless steel containers. This concept has cut down the electrical installation time by two years.

The containers have been designed to operate under extraordinary conditions inside the tunnel a constant temperature of approximately 35°C and atmospheric humidity of up to 80%. The rock conditions place further demands on the construction materials chloride containing water seeps through the rock with droplets falling onto the containers.

The tunnel designers wanted assurance from container makers of a long maintenance free service life, requesting a 10 year guarantee for the stainless material, with a lengthy list of conditions to be fulfilled. One of the bidders for the contract was FHS Frech Hoch AG, a Swiss specialist in containers for transport, who relied on their long-time supplier, stainless steel distributor Hans Kohler AG of Switzerland. Hans Kohler again relied on their long term supplier Outokumpu. Outokumpu’s R&D arm was able to provide all the required extensive paperwork, as the only stainless producer within the bidding period. Outokumpu’s stainless configuration for the containers, defined by the Group R&D specialists, was Outokumpu’s proprietary super austenitic grade 254 SMO® for the roof, and austenitic 1.4404 (ASTM 316L) and 1.4301 (304) for the outer and inner wall structures respectively. The chain of supply foolproof, the contract went to the three companies.

Again via Hans Kohler, Outokumpu has also supplied stainless steel for the fire safety doors of the transverse tunnels: both 1.4404 and super austenitic 904L.

Mr Martin Vögeli marketing and sales manager for Hans Kohler said that “This important project was challenging in every respect. It proved that we’re working with the right stainless producer as concerns technical service, reliability and quality. It was a pleasure to work with the competent and reliable customer FHS Frech Hoch.”

Hans Kohler AG is a major stainless steel distributor, supplying the broadest range of products in Switzerland. Cooperation with Outokumpu group companies goes back decades. Switzerland, a country best known for its peaks, also peaks in stainless steel consumption per capita the country is second only to Japan and ahead of the EU average by 22%.

Teubacex Q1 net profit up by 12.5% YoY

Thomson Finacial reported that Tubacex SA expects record earnings in 2008 due to a very positive outlook and after a 12.5% YoY rise in net profit to EUR 13.89 million in the first quarter from a year earlier. Its revenues rose by 3.3% YoY to EUR 178.10 million in the first quarter, while EBITDA was up by 4.5% YoY at EUR 27.55 million.

Tubacex in a statement said that its first quarter results reflect the strong demand in the global seamless stainless steel tube business driven by current and expected investment in the oil and petrochemical industries.

Chinese chrome ore imports during January to March 2008

China imported 541,000 tonnes of chrome ore concentrate in March 2008, generally the same as that in March 2007 and up by 3.6% MoM. Total chrome ore imports in the January to March 2008 quarter amounted to 1.66 million tonnes up by 15.7% YoY.

Despite jumping imports, domestic chrome ore price still climbed. This implies tight supply and rising price in international market as well as swelling demand and deteriorating scant supply in China.

Statistics from customs show South Africa provided 196,500 tonnes in March 2008, acting as the largest provider. Turkey and Oman followed by 79,000 tonnes and 70,000 tonnes respectively. As prices for traditional resources, mainly from India, Turkey, Iran and Pakistan, perched at a high level, many domestic producers turned to resources from Oman despite the low grades.

Chrome ore imports from different countries in March 2008

In million tonnes

(Sourced from MySteel.net)

Sandvik acquires UK medical technology company Eurocut

It is reported that Sandvik has acquired UK based Eurocut Ltd, which manufactures medical instruments and implants for the orthopedic sector The acquisition further strengthens Sandvik’s position in the rapidly expanding medical technology segment.

Its annual sales amount to about SEK 60 million and the company has 60 employees. Operations are based in Sheffield, in the UK.

Mr Peter Gossas president of Sandvik Materials Technology said that “The acquisition is in line with our long term ambition to be a strategic partner within the area and a complete supplier to globally leading medical technology companies. The addition of Eurocut Ltd broadens our product program, expands our capacity and strengthens our expertise within machining and production of medical instruments and implants.”

Chinese groups eye stake in FMG - Report

The Australian newspaper reported that 3 Chinese companies, Sinosteel, Chinalco and Baosteel are vying for a stake in Australian iron ore group Fortescue Metals Group Ltd.

In an un sourced report, the paper said that US fund Harbinger Capital Partners, a long term Fortescue investor with a 16% stake, is looking to reduce its holding to cash in on Fortescue's strong share price gains.

As per report, any sale to a Chinese group would probably only be for half of Harbinger's stake, given the Australian government's concerns about the level of foreign investment in the sector.

Venezuela to take majority stake in Guasare Coal

Reuters reported that Venezuela will take a majority stake in coal miner Guasare Coal.

Mr Hugo Chavez president of Venezuela during his weekly Sunday broadcast said that "I have approved the acquisition of a majority stake in Carbones del Guasare.”

He did not say by how much the state would boost its holdings in the company.

Mr Chavez also said the state plans to take complete control of Carbones de la Guajira, buying out the 64% stake in the company held by a mining consortium called Carbomar and that the buyout will be done over 18 months for no more than USD 21 million. He said that "We are going to recover all of the company.”

Guasare Coal International, a JV between Venezuela's state owned Carbozulia, US based Peabody and Anglo American Plc, operates the Paso Diablo coal mine in Venezuela's western Zulia state. Carbozulia has a 49% stake in Guasare, while Anglo American and Peabody each have 25.5%. Carbones del Zulia has operated the Mina del Norte mine in Zulia state since 1995.

Aquila to start iron ore export by 2012

AAP reported that Aquila Resources can deliver a 25 million tonnes per annum iron ore operation at its West Pilbara project in Western Australia at a capital cost of AUD 4.12 billion. Aquila's first shipments are scheduled for 2012.

Aquila said that its pre feasibility study for the first stage of the project looked at port options, infrastructure at proposed mine areas and development of mine to port transport corridors. The study confirms the viability of 160 kilometer of new railway to a new open access, deep water port facility at Cape Preston, south of Dampier.

A definitive feasibility study is due to be completed in the second quarter of 2009 and construction of the first stage could start in early 2010.

About AUD 1.79 billion of Aquila's estimated capital expenditure will be incurred on the railway, ore wharf and channel. It said that the project was capable of producing 30 million tonne per annum in its first stage with a marginal increase in capital expenditure.

Mr Tony Poli executive chairman of Aquila said that he is encouraged by a recent Australasian Resources announcement that the developer of Cape Preston port, Mr Clive Palmer's Mineralogy, is prepared to consider a development proposal from Australasian to construct a deep water port, based on Mineralogy's existing government approvals.

ICV to hire bankers to hunt for coal reserves abroad

ET reported that International Coal Ventures has decided to empanel three to four merchant bankers to identify coal reserves in foreign countries.

As per report few merchant bankers made their presentations to the ICVL board. Bankers in the fray include JP Morgan, HSBC Securities, Citi Bank, Societe Generale and Kotak Securities. A final selection will be done in the next 10 days.

CIL sources close to the development said that “Three or four of the bankers will be empanelled. They will scout for coal blocks in other countries, do due diligence, explore legal and financial angles on ICVL’s behalf and do their bit for the company to acquire these blocks. They will also be responsible for valuation of the blocks and prepare the proposal for takeover. However, if ICVL gets information on the available blocks, it will hand over the task to these merchant bankers for taking necessary action.” The source added that “There will be prefixed terms laid out by ICVL for dealing with foreign parties.”

ICVL is a special purpose vehicle floated by SAIL, NTPC, RINL, NMDC and CIL to acquire coal blocks overseas. It was floated to pursue an aggressive mergers and acquisition strategy for coal blocks. SAIL and CIL contributed INR 1,000 crore each to ICVL’s equity while RINL, NMDC and NTPC chipped in with INR 500 crore respectively. Based on the INR 3,500 crore equity component, the company will be able to mobilize nearly INR 6,500 crore of debt.

Strike stops production at Skorpion Zinc in Namibia

Reuters reported that a strike over pay has stopped production at Namibia's biggest zinc producer Skorpion Zinc since Saturday.

The majority of workers earlier this week voted for a strike after turning down an offer of a 10% wage increase. The Mineworkers Union of Namibia, the largest union in the country, is demanding a 14% increase.

Mr Usi Hoebeb a company spokesman told Reuters that "As far as I know, there was no production yesterday.”

Union officials are in discussions with Skorpion and not immediately available for comment.

The mine, owned by mining giant Anglo American produces special high grade zinc for Asian, European and North American markets. The company produces 12,500 tonnes of zinc per month and about 10% of its production is exported to South Africa.

Chinese coal giants deny price agreement with Japanese utilities

China's two largest coal companies, Shenhua Group and China National Coal Group Corp both said that China and Japan had only reached consensus in coal price negotiation and export price was still to be fixed in further discussion. Export price for Japan is a benchmark for prices for other regions, including South Korea and Taiwan.

Currently only four miners in China Shenhua Group, China National Coal Group Corp, China Minmetals Group and Shanxi Coal Import & Export Group Corporation, can export coal. The former two participate in the long term contract negotiation. The two giants disclosed that their representatives had come back from Japan.

Mr Huang Qing board secretary of Shenhua Group said that "The negotiation has not ended by May 5th 2008 but both sides are eager for an agreement. Our representatives have returned. But if the price has not been fixed, we can go on the negotiation, either in China or Japan adding that the consensus was still confidential.”

According to some earlier reports, coal miners in the north of China have agreed with Japanese buyers on a 2008 price hike of 93.52% for thermal coal. The new FOBT price stands at USD 131.4 per tonne higher than the USD 125 per tonne offered by Australia but the 93.52% hike is lower than the 125% advance agreed by Japan and Australia.

As for the alleged USD 131.4 per tonne for thermal coal, an analyst from Orient Securities explained that the price was lower than previous expectation. He said that "The price is a bit higher than that offered by Australia, but it can still go up as China enjoys a shorter distance than Australia."

Besides, an insider revealed that the export volume for the negotiation might be 5 million tonnes, including 1.1 million tonnes to 1.2 million tonnes for Shenhua Group and over 3 million tonnes for Datong Group. But this has not been recognized by the two limited companies.

(Sourced from mysteel.net)

Kazakhmys dismisses ENRC offer

It is reported that Kazakhmys has last week rejected GBP 7 billion takeover offer from European Natural Resources Company, which offered GBP 15.50 a share for Kazakhmys. The board of Kazakhmys is understood to have rejected the offer within minutes of receiving it.

A spokesman for the company said: “ENRC announced that it was in talks with us when no talks had taken place and it has now come up with a derisory offer that is clearly ill considered.”

This saga began two months ago, when ENRC, the world’s largest producer of ferrochrome said that it had held takeover talks with Kazakhmys. This was denied by Kazakhmys, which then asked the Takeover Panel for a put up or shut up order. ENRC has until next Friday to table a properly financed bid or it must walk away for six months.

ENRC has also secured the services of Mehmet Dalman, a hedge fund banker and former Commerz-bank deal maker.

Allotment of mining lease to ArcelorMittal in Jharkhand under cloud

ET reported that ArcelorMittal's steel venture in India has hit a road block with the central government questioning Jharkhand government's decision to give preferential allotment of the Meghahatuburu mining lease in west Singhbhum district.

It has asked explanations from the state for proposing to grant the 500 acre iron and manganese ore mining lease to ArcelorMittal, rejecting claims of domestic steel major SAIL and public sector NMDC. Apart from SAIL and NMDC, there were over 70 applicants for the mine.

The Centre has asked the state to cite valid reasons for rejecting any application. A source in the ministry of mines said that “The state government should have dealt the applications strictly as per merits and passed rejection orders.”

According to official sources, many applications for the Meghahatuburu mining lease have been rejected by the state merely on the ground that the applicants do not have MoU with the state.

While the Jharkhand government informed the Centre that public sector companies SAIL and NMDC have expressed no objection regarding the state’s decision to grant the mining lease to Arcelor Mittal, SAIL has denied any such communication with the state. An official source said that “The state government has merely informed SAIL that it is offering Karampada mine to ArcelorMittal. No reason has been given for the decision. In fact, the district mining officer has written to raw material division of SAIL about the state government’s intent to which the PSU replied that it would disturb its existing mining operations in Meghatuburu and add to pollution levels causing environmental degradation.”

Zinifex poised to win full control of Allegiance Mining

It is reported that the mining company Zinifex appears set to win full control of Allegiance Mining. Zinifex took over Allegiance and the Avebury nickel mine on Tasmania's west coast seven weeks ago, after a three month struggle.

It's frequently extended its offer, seeking 90% of shares to trigger a compulsory acquisition process and take full control of the company.

The main obstacle has been Allegiance's major Chinese shareholder and customer, Jinchuan, which holds a 10.4% stake. Now, Zinifex has told the Stock Exchange that Jinchuan has now accepted its offer, meaning Allegiance will soon be fully absorbed and de listed from the ASX.

Zinifex said that it'll honor all supply agreements with Jinchuan including plans to ship the first Avebury nickel to China within two months.

Coal of Africa sells Holfontein project to Lachlan Star

Thomson Financial reported that coal company Coal of Africa Ltd has agreed to sell its Holfontein coal project in South Africa to Australian mining firm Lachlan Star Ltd for AUD 25 million, payable in a mix of cash and shares and staged at key milestones.

Coal of Africa said that the transaction involves a payment of AUD 15 million with minimum cash consideration of AUD 9 million after transferring the project tenements to Lachlan's nominated subsidiary and a payment of AUD 1 million and a share payment of AUD 2 million upon grant of new order mining rights.

It added that this would be followed by a cash payment of AUD 2 million and a share payment of AUD 3 million upon the production of an aggregate of 500,000 tonnes of saleable coal and a cash payment of AUD 1 million and a share payment of AUD 1 million upon the production of an aggregate of 1,500,000 tonnes of saleable coal.

Coal of Africa said that the transaction also includes an option agreement covering the adjoining Wildebeestfontein Farm.

PT Indika Energy launches USD 300 million IPO

Reuters reported that Indonesian coal producer PT Indika Energy on began marketing an initial public offering to raise up to USD 300 million ahead of a June 18 listing in Jakarta.

As per report Indika Energy is selling about 937.3 million shares or 18% of its enlarged share capital, at IDR 2,300 to IDR 2,950 each in a deal handled by Citigroup, Deutsche Bank, Mandiri Sekuritas, Danareksa Sekuritas and Indo Premier Securities.

It added that an over allotment option would expand the deal by 104.1 million shares, or 11 percent.

Indika Energy is set to kick off a global marketing road show in Singapore on Friday, with final pricing set for May 23.

Supreme Court to decide coal e-auction rules

It is reported that India’s Supreme Court will decide how coal companies would conduct internet based auctions to ensure the participation of greater numbers of bidders and restrict the number of bids by one bidder.

The apex court will consider the matter on appeals by subsidiaries of Coal India Ltd that point at a couple of bidders who bombarded the auction website with a large number of requests, which prevented other bidders from participating in the web based auction.

As per report, a bench headed by justice Mr Arijit Pasayat is hearing the appeals filed by Coal India Limited’s subsidiaries Western Coalfields Ltd and South Eastern Coalfields Ltd and has posted the matter for hearing after the court’s summer vacation.

The report added that the bench refused to vacate a stay granted against the Bombay high court judgment that asked the coal firms to not blacklist or debar the traders from participating in future e booking or e auction. The high court had accepted that the attempts by Sangita Sales Pvt. Ltd and Victorian Marketing Pvt Ltd were abnormally high, but prevented the CIL subsidiaries from taking stringent action since there were no rules that bar such attempts.

According to the coal companies, Sangita Sales and Victorian Marketing, which registered with service provider M Junction Services Ltd to buy coal from CIL through e-booking, had bid 311 and 195 times and the average time taken for 30 bids was four and 12 seconds, respectively. The companies were identified by looking at customers that placed more than 100 requests in 15 or less seconds.

Fox gains approval to start drilling at iron project

AAP reported that Fox Resources Ltd has received heritage and regulatory approvals to commence diamond drilling at its Mt Oscar iron ore project in Western Australia's Pilbara region at the end of May or early June.

The project, which focuses on banded iron formations, lies 30 kilometers south of the iron ore port of Cape Lambert and 25 kilometers south of Cape Lambert Iron Ltd's namesake magnetite iron ore project.

Afghan government hopes to ramp up mining sector

It is reported that the Afghan ministry of mines will hand over the rights to mine for gold in the northern province of Takhar to a private Afghan company. The company won the bidding last year and will invest around USD 40 million.

In November 2007, the Afghan government signed a contract for extraction of copper with a Chinese company called Metallurgical Group Corp. MGC will invest USD 2.8 billion to extract copper from the 12 million tonne Ainak mine.

Afghanistan has known deposits of coal, copper, iron, oil, natural gas and lapis lazuli. Reserves of high grade iron ore, discovered years ago at the Hajigak hills in Bamyan Province, are estimated to total 2 billion tonnes. Oil and gas has been found to the north of the Hindu Kush in large reserves but it is largely unexploited.

Centennial outlook boosted on coal export prices

Sydney based Centennial Coal last week said that its earnings outlook was strong for 2008 and 2009, thanks to rising coal prices and a rise in exports.

Centennial in a statement said that it was finalizing export coal prices for this year and had a high degree of confidence in a significant uplift in prices. It added that coking coal prices are continuing to surge and are pulling prices for all other types of coal higher.

Centennial said it was moving to capitalize on higher international prices by maximizing exports. The miner said exports were expected to account for about 30% of sales in the year ending June 30th 2009.

Centennial also said that its Angus Place and Mandalong mines were both on track for record annual production.

Jilin Aodong buys stake in Tadong iron ore mine

Jilin Aodong Medicine Industry Group Co Ltd a Shenzhen listed producer of traditional Chinese medicines announced that it inked an agreement to purchase a 30% stake in Tonghua Steel Group Dunhua Tadong Mining Co Ltd for a total of CNY 309.2 million (USD 44.27 million).

Under the terms of the agreement, Aodong Medicine will assume control of Yanbian Trade's stake for CNY 141.2 million (USD 20.22 million), after which it will invest an additional CNY 168 million (USD 24.05 million). In order to maintain the 4:3:3 division of shares among the three companies, the other two shareholders will inject proportional investments into Tadong Mining. The deal is subject to approval from Aodong Medicine shareholders.

Tadong Mining, established to run the Tadong iron ore mine in northeastern China's Jilin Province, is currently controlled by a Tonghua Iron and Steel Group