Essar Group secures 1300 acres for steel project in Orissa

FE reported that Essar Group has acquired 1300 acres, out of the required 1960 acres, for its 6 million tonne steel project in Orissa. Essar is investing INR 15000 crore for the project, which includes an iron ore pellet plant and setting up of a slurry pipeline.

Mr SK Ruia chairman of Essar Group has expressed his satisfaction over the progress of the project. Mr Ruia, along with J Mehera COO for steel business, met the chief minister and discussed about the prospect of the group's various projects in the state.

Mr Mehera said that the work for the slurry pipeline and the pellet project has been started. Equipment supply orders for the projects have been placed with South Korean and German companies.

It may be noted that Essar had signed a MoU in 2005 with the state government to set up a steel plant along with facilities for making iron ore pellet and transporting iron ore slurry through dedicated pipeline from Barbil sector to Paradip.

Export tax on steel may affect auto part makers – AMCA

It is reported that Indian government’s attempt to curb steel exports to ensure its availability at a reasonable price in the domestic market may also affect auto parts companies who export castings and forgings. Alarmed by the impact of the government’s decision to impose export tax on steel intermediaries, Automotive Component Manufacturers Association has sought an amendment that would exclude levies on such products.

ACMA has written to the steel ministry seeking clarification. It has stated that the government’s notification, which includes value added steel based products, has resulted in levy of export duty on rough iron and steel castings sold by some of the component companies overseas.

Mr Vishnu Mathur executive director of ACMA said that "Auto component producers exporting semi finished castings and forgings, which are meant for automotive exports, are being affected. This would have an adverse impact on the companies’ exports and the targets laid down in the Automotive Mission Plan."

AMCA has sought clarification or a necessary amendment in the clause so that auto component companies’ exports do not stand at a disadvantage. In the letter to the steel ministry, the association expressed its concern stating that while the main objective of the Government was to discourage steel exports of the basic steel raw material in view of the steep rise in steel prices since January 2008, customs are now imposing export duty on rough iron and steel castings that are being exported to vehicle manufacturers and tier I suppliers under global sourcing contracts.

GKS Construction setting up facility for readymade steel

BL reported that Chennai based GKS Construction Aids Private Limited is setting up a project to provide readymade steel for the construction industry. It is setting up rebar cut and bend facility in Ambattur industrial estate to make readymade steel and is in talks with large construction conglomerates like ETA, Allied Housing and DLF to supply readymade steel.

Mr AS Hariprasad MD of GCAPL said that the INR 25 crore plant can process about 3,000 tonnes of steel of 8 mm to 40 mm diameter a month. With the design and dimensions of the concreting portion from the customers, the CNC machines at GCAPL compute, cut and fabricate steel rods. It will help large construction companies to reduce inventory, optimize space, time and avoid overlap of steel rods eventually optimizing volume and weight of concrete and steel scientifically in buildings. The plant will be up and running next month.

Mr Hariprasad said that it will buy steel in coil form rather than in predetermined lengths. It will minimize wastage. Also, discounts on bulk procurement of raw material and savings through high productivity will make it cost effective.

GCAPL is into manufacturing steel centering, shuttering and scaffolding equipment.

FIPB approves 51:49 JV between FreightCar and Titagarh

BL reported that Foreign Investment Promotion Board has given its assent to the proposed USD 40 million 51:49 JV between FreightCar America and Titagarh Wagons.

Mr Umesh Chowdhary vice CMD of Titagarh Wagons said that in June 2008, boards of the two companies would take a final look at the project, which would manufacture aluminum rail cars.

The project is to be commissioned in two broad phases. In the first phase, prototype and designing work would be carried out and completely knocked down imported cars from Freight America would be assembled at Titagarh’s plant. It is seeking to buy a little more than 100 acres of land to set a manufacturing plant and start production of cars tentatively by the first quarter of 2010.

GAIL may sign gas pipeline deal with J&K soon

PTI reported that Jammu and Kashmir government will soon sign an agreement with public sector GAIL India for setting up city gas distribution network in 8 districts.

It may be noted that GAIL submitted the revised and final draft MoU to the state in March 2008 in connection with the project.

The law department has studied the proposal and final touches have been given to it.

Reliance Power to set up 3,910 MW power plant in MP

FE reported that, after bagging the 4,000 MW ultra mega power project at Sasan in Madhya Pradesh, Reliance Power has launched the development of another coal based project with a generation capacity of 3,910 MW in Madhya Pradesh with an investment of INR 18,000 crore. It has already signed the state support agreement with the Madhya Pradesh government.

The proposed thermal project would be developed on 80:30 debt equity ratio. Of the INR 18,000 crore, it would raise INR 8,900 crore through external commercial borrowings and INR 6,000 crore of rupee loan. The balance would be its equity. Reliance Power has received letter from the Madhya Pradesh Power Corporation for the purchase of 1,200 MW of the proposed project at INR 2.34 per unit.

Official sources said that "The project will be developed in 4 years after signing the power purchase agreement with various utilities. The company is, at present, in talks with Maharashtra, Harayana, Mumbai utilities for the sale of the balance power. It will seek coal linkage of 15 million tonnes for the proposed project."

Sources informed that six units of 600 mw would be installed. Reliance Power would weigh various options of sourcing power plants and equipment from India and foreign manufacturers including Chinese. According to sources, the Madhya Pradesh government has assured to help in the land acquisition and water supply for the project. Further, the project would get mega power project status as Reliance Power proposes to sell power to more than one buyer. The mega power enjoys concession in customs duty on equipments and raw materials.

Gujarat cement firms may cut capacity utilization

BS reported that Gujarat based cement manufacturers may lower their capacity utilization as the export ban last month has led to a situation of oversupply.

A top executive in the Cement Manufacturers' Association said that "The oversupply situation in Gujarat will sharply erode the profitability of cement companies. Some cuts could follow in their capacity utilization."

Gujarat's consumption of cement is 24% less than its overall production. It consumed 11.67 million tonnes of cement in 2007-08 against a production of 15.39 million tonnes. The remaining component was exported.

India exported 3.65 million tonnes of cement and 2.37 million tonnes of clinker in 2007-08, with Gujarat accounting for over 90%. Industry analysts said that the state is facing the immediate impact of export ban and there could soon be a marginal decrease in utilization by around 3% to 4%.

Lohia Group enters into automobile sector

Lohia Group has announced its foray into the automobile sector with an INR 150 crore investment to launch electric two and three wheeler vehicles in the second half of 2008.

Lohia Group, which has set up a subsidiary called Lohia Auto Industries, will set up a Greenfield manufacturing facility in Kashipur in Uttarakhand, with an installed capacity of 200,000 units a year.

Mr Ayush Lohia VP of Lohia Auto Industries said that "Recently, central and various state governments have taken initiatives to promote environment-friendly vehicles. Keeping in mind this aspect and soaring fuel prices, we have decided to launch electric vehicles in India." He added that the first lot of the electric two wheelers from the Lohia stable would hit the market by August 2008 followed by three wheelers in November 2008.

Commenting on the company's production capacity, he said out of the installed capacity of 200,000 units a year, about 150,000 would be two wheelers and the remaining would be passenger three wheelers. He added that "The capacity is scalable up to 800,000 to 1million in the future."

Mr Lohia said that initially, the facility would have about 60% localisation in components, which would be increased up to 70% to 80% within 3 to 6 months of the launch. It would also set up two research and development centers.

Lohia Group is currently involved in garment and handicraft exports, steel and brass coil business and real estate.

Update on renewable energy generation in Punjab

According to Punjab Energy Development Agency data, the quantum of energy produced in Punjab through new and renewable energy sources is more than 300 million units during 2005-07. Out of this, 77.73 million units were produced during 2005, while 109.35 million units and 128.83 million units of electricity during the years 2006 and 2007 respectively.

This apart, a large number of decentralized renewable energy systems or devices have also contributed to conservation of conventional energy. The state government has planned to achieve 10% contribution to total power generation in the state through renewable energy sources by 2012.

Year wise details of proposed enhancement of renewable energy and corresponding estimated investment during the 11th Plan in Punjab are

Production in million units
Investments in INR crore

Aditya Birla Group plans huge investments in Orissa

KalingaTimes reported quoted Mr Kumaramangalam Birla chairman of Aditya Birla Group as saying that Orissa is an important investment destination of the group companies and is planning huge investments in the state.

Mr Birla said that all the investments put together would be to the tune of INR 80,000 crore in sectors such as alumina, cement, telecommunication and retail. This includes the investments already made in the ongoing projects.

During his meeting with Mr Navin Patnaik chief minister of Orissa, Mr Birla reportedly discussed about the problems facing the ongoing projects of the group companies and the projects for which memoranda of understanding had been signed.

As regards the Utkal Alumina International Limited's alumina refinery of project at Kashipur in Rayagada district where the affected people have been demanding more benefits, Mr Birla said that it had sought the intervention of the government to resolve the issues involved. Apart from the alumina refinery at Kashipur, the other projects for which the company has signed MoUs include a world class aluminum complex in Koraput and Sambalpur districts at a cost of INR 11,000 crore, and a cement plant in Sundargarh district.

Power deficit in April 2008 worsened – CEA Report

According to the monthly capacity addition report released by Central Electricity Authority, growth in demand and lag in capacity addition worsened power deficit in April 2008.

As per report, peak power deficit for April 2008 went up to 16.7% as against 13.9% in April 2007. Average deficit for April 2008 reached 12.1% as compared with 10.4% in April 2007.

Total capacity addition of 250 MW in April 2008 is also short of the programmed 309 MW. This comes at a time the government has set a capacity addition target of 78,577 MW in the 11th Plan period.

Jaiprakash acquires Bina Power from Aditya Birla group

ET reported that Jaiprakash Power Venture Limited has acquired Bina Power Supply Limited from the Aditya Birla Group for INR 150 to INR 175 crore. Aditya Birla Group had formed BPSCL in the early 1990s to develop a 1,000 MW power plant in two phases of 500 MW each at Bina in Madhya Pradesh, but did not pursue it after the initial progress.

Mr Suren Jain MD of JPVL said that "JPVL has now approached the Madhya Pradesh government for revival of the various approvals required for the setting up of the plant." He added that the first phase of the project would commence operations within 48 months of receipt of all approvals. JPVL plans to commission 500 MW in the first phase at an investment of INR 2,500 crore and subsequently raise the capacity to 1,000 MW.

Post the Bina acquisition, JPVL will have interests in almost 7,000 MW of power assets. These projects, which are at different stages of implementation include 1,000 MW Karcham Wangtoo Hydro Electric Project, 1,320 MW super critical technology coal based power plant at Nigrie in MP, two projects totaling 2,500 MW in Arunachal Pradesh and two projects totaling 720 MW in Meghalaya.

Panang hydro electric project will destroy Dzongu – Panel

BL reported that the 6 member independent committee on big hydro projects has said that the 280 MW Panang hydro electric project will completely and permanently destroy the environment of Dzongu in North Sikkim.

The members said that the project would not only destroy the place with deep and unique religious sentiments attached but would also destroy the unique Lepcha community’s abode.

According to members, the Sikkim government had hastily committed itself to develop about 42 big hydropower projects without consulting the people of the state and without also considering the implications for the environment, the people’s culture and even the future returns on investment.

The team said that the state government, instead of assessing and realizing the potential of power generation in Dzongu and other regions of the state, had drawn up a MoU with a firm for the Panang project. They added that "The government should suspend or declare a moratorium on the project for 5 years and in the meantime take up the small and micro hydro projects in the region and also see the how the Teesta V project performs."

Lanco Infra gets USD 150 million IFC credit for power projects

BL reported that Lanco Infratech Limited has secured a USD 150 million line of credit from IFC recently that will help the company part finance some of the power projects at various stages of execution.

In Lanco’s 600 MW project Amarkantak, IFC had invested in 5% equity and other investor includes German investment arm DEG, part of KFW, which has taken 10% stake.

Mr G Venkatesh Babu MD of Lanco Infratech Limited said that "We have long term engagements with IFC and this additional commitment of USD 150 million reinforces their commitment to be part of the projects developed by the Lanco Group."

Lanco has structured most of the power projects with 80:20 debt equity structure and achieved financial closure for about 6,000 MW of the total 13,000 MW under various stages of implementation and clearance.

Mr Babu said that "We have also bid for the Telia ultra mega power project planned in Jharkhand. This project is being pursued in partnership with Genting. To meet the coal requirements for coastal projects, we are negotiating with mines in Indonesia, South Africa and Australia."

He further added that Lanco is in parleys with some private equity firms based in the US to divest part of the stake and raise about USD 200 million before December 2008. He said that "We are discussing with private equity firms to augment funds for real estate projects now under implementation. There has been growing interest of PE firms in picking up stake and partnering with Indian companies in real estate ventures."

Global crude steel production in April 2008 up by 6.4% YoY

World crude steel production for the 66 countries reporting to the International Iron and Steel Institute was 116.370 million tonnes in April 2008 up by 6.4% YoY as compared to April 2007.

The growth in crude steel production during March 2008 among regions was again led by Asia as usual.

In ‘000 tonnes
Source – IISI

Top 20 nations

In ‘000 tonnes
Source – IISI

PT Krakatau Steel should not go to foreigners - Defense minister

According to Mr Juwono Sudarsono defense minister of Indonesia, state steel company PT Krakatau Steel should be privatized through an initial public offering rather than by being sold to a foreign owned company.

After meeting with Mr Susilo Bambang Yudhoyono president of Indonesian Mr Juwono said the country's largest steel producer should remain under Indonesian control because of its strategic role in supporting the national defense industry.

He said that "I have met with Krakatau's directors and we agreed the company should be privatized through an IPO.” Mr Juwono said the case for an IPO was supported by Krakatau's improved financial and managerial performance during the past 18 months.

Mr Juwono said that foreign acquisition of Krakatau Steel could result in the massive layoffs of existing employees. He said that "It is good the company will have increased profits, but 700 to 1,000 people could lose their jobs.”

Mr Juwono said that top officials at the Defense Ministry, the State Ministry for State Enterprises, the Finance Ministry and the Industry Ministry have yet to meet to decide how Krakatau will be privatized. Mr Juwono said that "I will set up a meeting with all the other relevant ministers as soon as possible because I think it is crucially important for our defense industry.”

Corus to supply steel to build aircraft carriers

scunthorpe.co.uk reported that the UK’s ministry of defense has given the Corus steelworks in Scunthorpe the go ahead to help build Britain's largest ever aircraft carriers at a cost of GBP 3.8 billion. The carriers will be the most powerful surface warships ever constructed in the UK. Once they enter service in 2014 and 2016, they are expected to remain in the fleet for up to fifty years.

As per report, Corus will supply more than 80,000 tonnes of steel for the carriers, to be named HMS Queen Elizabeth and HMS Prince of Wales. Rolling will start soon in Scunthorpe of the steel plate to build the hulls of the twin ships.Corus beat off international competition for the lion's share of a GBP 65 million contract to supply the steel. Around 90% of the steel will be manufactured at the company's sites in Scunthorpe, Dalzell in Scotland and Skinningrove in Teesside.

Ms Rachel Cox a Corus spokeswoman said that "It's great news for Corus. This success confirms our ability to produce world class steel and is a welcome boost to our three sites involved in the manufacturing program."

She added that the carriers will be built in sections and assembled at Portsmouth, Barrow in Furness, Glasgow and Rosyth.

CSC honored as Supplier of the Year by GM

Taiwan’s CSC announced that it has received General Motors 2007 Supplier of the Year award for its significant contributions to GM’s global product and performance achievements. The 16th annual award themed the Best of the Best was given during ceremonies on April 26th 2008 at the Sawgrass Marriott Hotel at Jacksonville in Florida.

Mr Bo Andersson VP Global Purchasing and Supply Chain of GM group said that “GM is proud to honor CSC as a GM Supplier of the Year winner. This award is our way of telling the winners that we appreciate all of their efforts in working together with GM to manufacture world class vehicles. CSC is among the best of the best. They understand that our mutual success can only be achieved by sharing common goals and priorities.”

Mr Andersson said that “This is the first year for CSC to supply GM and for GM to award a supplier at his first year is not easy. GM commendes CSC’s teamwork for his best performance and GM is pleased to receive CSC into the global steel supply community.”

The GM Supplier of the Year award began as a global program in 1992. Winners are selected by a global team of executives from purchasing, engineering, manufacturing and logistics who base their decisions on supplier performance in quality, service, technology and price. This year, General Motors honored 97 suppliers for their outstanding performance throughout 2007.

Construction begins on USD 290 million Illinois coke making plant

AP reported that construction began recently on a coke making plant that will provide fuel and steam to an adjacent steel foundry in a USD 570 million venture.

Gateway Energy and Coke Co a unit of Philadelphia based Sunoco Inc will build and run the USD 290 million plant which is expected to supply as much as 650,000 tonnes of coke a year that will be sold to a nearby United States Steel Corp. plant in this St Louis suburb.

Construction of the coke plant is expected to take 18 months.

Coke a fuel used to superheat ovens for steel making is produced when coal is cooked at high temperatures to remove any moisture or gases.

A byproduct of the coke making will be used by a USD 280 million cogeneration site US Steel plans to build and run, converting the gas into electricity that will power the steel mill.

Soaring oil prices may end dollar global status - Study

According to a Rice University study, soaring oil prices may cause an energy crisis that will eventually lead to a new world financial system based on multiple currencies instead of the US dollar.

According to a study released by the Houston based university's Institute for Public Policy, the rising inflation fed largely by oil producing countries will force Western governments to tighten monetary policies, undermining export driven economies in China and India. That would undercut energy demand, ending cheap credit worldwide that is fueled by so called petrodollars and further undermining the global economy.

The study's authors wrote that “We think that energy markets may play an important role in bringing about a financial crisis that may transform the global financial system. The US dollar's status would likely come to an end.''

According to the study, written by Mahmoud Amin El Gamal of Rice University and Amy Myers Jaffe of the Baker Institute, China, India and Middle Eastern oil producers such as Saudi Arabia have an interest in working with Western governments to establish a financial system based on a range of currencies that would offer similar stability to the days of the gold standard.

The study said that governments worldwide hold dollar denominated debt, and an orderly transition would allow those countries to diversify their investment holdings over time.

The authors wrote that high oil prices and their effect on the West eventually will cripple exports from China and India, exposing bad loans in their banking systems. They said that a banking crisis in China would require massive rescue packages, costing well above USD 1 trillion and requiring massive sale of dollar denominated assets, thus deepening the crisis.

The dollar fell the most in a month today as oil prices soared, prompting investors to turn to commodities as a safe haven. The Dollar Index traded on ICE futures in New York, which tracks the dollar against currencies of six trading partners, fell to 72.49 from 73.045 yesterday and has fallen 12 percent in the past year.

Concern grows over steel shortages in Thailand

Bangkok Post reported that concern is mounting about a possible steel shortage in Thailand as demand rises in anticipation of work starting on government mega projects. As well, global demand would be pushed up by reconstruction following the earthquake in China and the cyclone in Burma.

The Commerce Ministry of Thailand has asked manufacturers, distributors and importers for weekly reports on their stocks and has dispatched officials to inspect stocks to prevent hoarding. Mr Yanyong Phuangrach the department's director general said that the ministry's Department of Internal Trade plans talks with industry executives later this week or early next week to discuss ways of ensuring adequate steel supplies.

An industry source said that there are signs of price speculation by traders who believe the department will approve increases in steel prices. A Commerce Ministry source said that officials had tentatively approved higher prices for steel bar and sheets.

Last week, local contractors threatened to boycott government projects unless authorities acted within 30 days to deal with skyrocketing material prices. The source said that steel bar prices would increase by THB 8 per kilogram or THB 9 per kilogram from THB 28 per kilogram or to at least THB 36 per kilogram. The new price for steel sheet would be THB 39 to THB 40 per kg up from THB 30 per kilogram to THB 31 per kilogram currently.

The source said that ''Steel manufacturers have been asking to raise prices since the end of April, but the ministry asked them instead to help hold the prices for a while and they agreed, but now the price of raw materials have risen markedly, partially on expected higher demand from China to rehabilitate damaged by the earthquake.”

Mr Vikrom Vajarakupta executive director of the Iron and Steel Institute of Thailand said that world prices remained relatively high, with hot rolled steel at USD 900 to USD 1,000 per tonne compared with about USD 600 at the end of last year. He predicted that prices would ease later this year on ebbing demand in a slowing world economy. He estimated Thailand's steel demand at 13 million tonnes this year, a rise of 3% to 5% from last year.

Metso to invest in China

Reuters reported that Finnish engineering company Metso would invest EUR 20 million in China to expand production capacity and office facilities to respond to the demand growth of automation valves.

As per report Metso will set up a new valve factory and supply centre for Metso's automation division and the new facilities would begin operations in 2010 with production capacity quadrupling from 2007 to 2011.

The report added that Metso would also hire 400 new staff.

Daewoo Shipbuilding won USD 1.4 billion drill ship order

Daewoo Shipbuilding and Marine Engineering Co Ltd said that it had secured an order to build two drill ships worth KRW 1.44 trillion (USD 1.38 billion) from the Americas.

Daewoo Shipbuilding and Marine Engineering in a filing to the Korea Exchange said that it will deliver the vessels by April 15th 2011. But it declined to identify the party placing the order.

Korea Cast Iron Pipe appoints new co CEO

Korea Cast Iron Pipe Ind Co Ltd announced that it has appointed Mr Jung Bu Su as its Co CEO replacing Mr Han Don Gyu effective May 23rd 2008.

The current Co CEO Mr Hong Dong Guk continues his duty at the Company.

Ford Motor cuts North American automotive production

Platts reported that Ford Motor Company is making adjustments to its automotive production plan to shift away from the gas guzzling SUVs and revising downward its near term North American automotive profit outlook and production forecasts. At the same time, it is planning further manufacturing capacity realignments, additional cost reductions and changes to its product mix to respond to the rapidly changing business environment in the US.

While Ford is increasing production in 2008 of its sedans, it is reducing 2008 production of large trucks and SUVs, as gas prices soar and customers move more quickly to smaller and more fuel efficient cars and crossovers.

Ford said that its second quarter vehicle production will be down 15% from Q2 2007 and Q3 production is expected down by 15% to 20% from last year. The fourth quarter is expected to be down 2% to 8% YoY. For the year, Ford now expects US production to be between 15 million and 15.4 million units.

Mr Mark Fields Ford's president of the Americas said that "Rapidly rising commodity prices particularly steel prices and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009.”

Mr Alan Mulally president & CEO of Ford said that "Unless there is a fairly rapid turnaround in US business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American Automotive profitability goal. Overall, we expect to be about break-even companywide in 2009 with continued strong results in Europe and South America."

He said that "We are profitable and growing outside of North America and our transformation plan in North America is working. The challenge affecting the entire industry is the accelerating shift in consumer demand away from large trucks and SUVs to smaller cars and crossovers combined with a steep rise in commodity prices and the weak US economy."

Yamato Kogyo acquires US scrap dealer

Yamato Kogyo has announced that its subsidiary Yamato Kogyo America purchased 49% interest of Advanced Steel Recovery, which is US ferrous scrap dealer.

Yamato Kogyo tries to secure steel source through the acquisition of container based scrap exporter.

Taiwanese import of common steel products down in April

Taiwan imported 300,000 tonnes of common steel products in April 2008 down by 9% MoM

The import price on average was TWD 26,910 per tonne, up by TWD 2,560 per tonne higher than March 2008. China was the main exporter to Tawian with 145,922 tonnes and the import price on average was at TWD 26,660 per tonne.

The import of steel sheets in coils was 159,000 tonnes and that of coated steel plates was 72,000 tonnes. Shipment of long products was 57,000 tonnes and welded steel pipe was 1,800 tonnes.

Besides, Taiwan exported 750,000 tonnes of common steel products in April 2008 dropped by 6% MoM. The export price on average was TWD 24,160 per tonne up by TWD 920 per tonne from March 2008

(Sourced from YIEH.com)

South Africa wants higher carbon tariffs by 2050

Reuters reported that South Africa wants to significantly increase tariffs on carbon use by 2050 as it strives to reduce harmful emissions.

A South Africa’s government minister said that South Africa, which relies primarily on carbon belching coal fired power stations to generate electricity, is the continent's leading producer of carbon emissions, accounting for more than 50% of the total.

Mr Trevor Manuel finance minister of South Africa in February introduced a 2% kilowatt hour levy on non renewable sources of electricity essentially a carbon tax in a bid to spur greater investment in low carbon technologies.

Mr Marthinus van Schalkwyk environmental affairs and tourism minister said that "We already have our first carbon tax, the one that the minister of finance announced. In principle a carbon tax will be nothing new for South Africa but we do not want to pre empt any cabinet discussion and any decisions.”

He told reporters that "In future there will be a price on carbon. We don't yet know what form that will take.”

An official environmental affairs report said that carbon prices could rise to ZAR 750 per tonne of carbon equivalent by 2050 from ZAR 100 in 2008. The report added that "The rising tax level is designed to approximate a phase of slowing emissions growth, stabilizing emissions and ultimately reducing absolute emissions through a high carbon tax of ZAR 750 in the last decade.”

Nucor announces prices of common stock offering

Nucor Corporation announced the pricing of its public offering of 25,000,000 shares of its common stock. The offering was priced at USD 74.00 per share.

Nucor has granted the underwriters an option to purchase up to an additional 3,750,000 shares of common stock at the public offering price, less the underwriting commission, within 30 days following the closing date. The offering is expected to close on or around May 29th 2008.

Nucor intends to use the net proceeds from the offering for general corporate purposes, including acquisitions, capital expenditures, working capital needs and repayment of debt. In addition, Nucor intends to raise up to USD 1 billion in the debt capital markets in the near term, subject to market conditions.

Banc of America Securities LLC, Citigroup Global Markets Inc and J P Morgan Securities Inc are acting as Joint Book-Running Managers for the offering.

USW Women of steel demonstrate against toxic trade

The United Steelworkers Women of Steel is hosting a lead screening session to educate families about potentially toxic products and the bad trade policies that are allowing them into our homes. The product screenings are part of the USW's international "Protect Our Kids – Stop Toxic Imports" campaign.

Members of the community are invited to bring toys and other imported items to the United Shopping Plaza where they will be screened for lead and where the USW will provide safety and educational material.

Ms Donna Shaver a member of the USW's Women of Steel who are conducting the lead screening tests here and across the United States and Canada said that "I've been scared to death for the children after hearing about lead on toys like Thomas the Tank Engine, Barbie, Dora the Explorer, Big Bird and on baby bibs, too. We're hoping our campaign helps find poisoned products so we can get them out of our homes, but we also want to draw attention to the root of the problem bad trade deals. These cheap goods from countries like China have an expensive price that is threatening the health and safety of our children and families."

The union is calling upon Congress to support the US Food and Product Responsibility Act, introduced in the Senate by Sen Sherrod Brown, D Ohio and in the House by Rep. Pete Visclosky, D Ind. This legislation would safeguard Americans against toxic food and products by requiring companies producing the goods and importers importing them to take responsibility.

Over the past few months, the USW Women of Steel have conducted lead screening tests similar to the St Croix event in more than 25 cities across North America to educate families about this threat of lead contaminated toys and other products.

Dr Herbert Needleman a University of Pittsburgh professor who pioneered lead research and treatments 30 years ago said that "Products we made safe through regulation of US manufacturers are coming in poisonous through a back door in trade policy.”

Steel production to reach 30 million tonnes in Iran – Report

Mr Barati Nik Iranian deputy minister of mines & industries visited the progress of the biggest factory of direct iron reduction at Khuzestan Steel Company.

Mr Nik said that "By the end of the fourth development plan, Iran's steel production capacity will be increased to 30 million tonnes. In order to increase the steel production in the country, there are 8 major steel projects being carried out."

He said Shadegan Steel Mill in Shadegan, Mianeh Steel Mill, Chaharmahal Bakhtiari Steel Mill in Azarbayjan, Neiriz Steel Complex, Gha'enat Steel Mill, Sabzevar Steel Complex, Bafq and Baft Steel Mills are the 8 steel projects in 8 different parts of the country for a balanced expansion. Initially an amount of 800,000 tonnes of production capacity was considered for each of them but then after certain changes a production capacity of 1 million tonnes is considered for each of them. Hopefully we will be adding another 5 million tonnes to the available capacity.

Zamzam 2 factory of Khuzestan Steel Mill is the biggest direct iron reduction factory of Iran with a yearly production of 1 million tonnes of sponge iron. With its operation, the steel production capacity at Khuzestan Steel Mill will increase to 3,200,000 tonnes.

Iran to boost oil output to 4.3 million barrels per day

IRNA quoted Mr Seifollah Jashnsaz deputy oil minister of Iran as saying that Iran will boost its oil output to 4.3 million barrels per day by the end of the current Iranian year. He added that such a rise is due to major projects implemented by the oil ministry this year.

At present, Iran is producing 4.207 million barrels of oil daily which shows an increase of 105,000 barrels as compared to last year. The surplus oil will be supplied from Darkhovein, Shadegan and Hengam oil fields in Khuzestan province, southwestern Iran.

Demand for cement and steel to double by 2009 in GCC

GulfNews reported that demand for concrete and reinforcing steel is expected to more than double in 2009 as over USD 1.8 trillion worth of construction projects flood the GCC. Concrete, reinforcing steel and stone cladding are in all in huge demand in the region as the Gulf becomes the epicenter of the world's most concentrated construction boom. However, figures show demand for construction materials will peak next year before dipping in 2010.

According to the report, demand for ready mix concrete across the Gulf is forecast to hit USD 8.6 billion in 2008. This figure will be more than double in 2009 to reach USD 18.7 billion before dipping to USD 15.5 billion in 2010.

It is a similar story for reinforcing steel. It is expected to reach USD 7.5 billion in 2008 and rocket up to USD 16 billion in 2009. But it will fall to USD 13.1 billion in 2010. Stone cladding is expected to reach USD 1.5 billion in 2008, USD 4.3 billion in 2009 and maintain a steady increase of USD 4.5 billion in 2010.

Mr Bernard Walsh MD of DMG World Media Dubai said that "The forecasts are based on the number of projects coming up. Therefore, the number of projects, at the stage where you need cement and steel, will have reduced in 2010. Stone cladding has a delay factor as it's used later on in the construction process. However, as new projects come up and orders for cement and steel are put in, demand could increase again after 2010."

Dr Kashif Naqvi senior procurement analyst at Al Habtoor Engineering Corporation said that "There is a shortage in the clinker and therefore suppliers are unable to produce the quantities. Demand has gone up but supply has gone down."

Mr Naqvi said that Al Habtoor has projects booked for the next 10 years and are specifically looking to import cement from Southeast Asia among other regions to try and keep up with demand. He added that "Now the outside sees the high demand in Dubai and so they are trying to raise their prices from around AED 14 or AED 15 to AED 18."

The top 5 biggest civil building projects currently under way in the Gulf are all in Saudi Arabia, the UAE and Kuwait with a combined value of USD 349 billion.

Kuwait rail network tenders likely by end of 2008

Emirates Business reported that tenders for the construction of the Kuwait Metropolitan Rapid Transit System, the country's first passenger rail network, are expected to be awarded in 2008. Separate tenders will be awarded for each of the 4 lines, which will make up the 165 kilometer network across Dubai.

Mr Hussain Jafar Al Sayegh chairman of AKNAN Global and chief consultant for Kuwait Overland Transport Union said that "We are completing the final design stage and in June 2008, the cabinet will make its approval on the specifications of the project. Invitation for bidders, both local and international, will most likely start in July 2008 and the winners will be announced within 6 months. We are likely to have the tenders awarded by end of 2008."

Mr Al Sayegh said that "This is part of the Kuwaiti government's keenness to involve private sector in most of its projects to encourage innovations. The financing model was chosen following studies by consultants who cited successes of similar government private partnerships in other countries. It is the best financing model. Revenue will not be generated only through ticket sales, there will be better ways of making it a lucrative investment."

As part of the design studies, examples have been drawn from the Dh15.5bn Dubai Metro currently under construction. A team of renowned rail experts is also trying to borrow ideas from some of the best metros in the world while taking into consideration the social and economic needs of Kuwaitis, noted Al Sayegh.

Construction of the project estimated to cost USD 11.3 billion is expected to commence in 2009 and the first phase will be completed within 5 years. For each of the 4 lines, the Kuwaiti government will form a JV with the bidder, with the government owning a 24% share and the bidder 26%. The remaining 50% stake will be sold in an IPO.

The Kuwait Metropolitan RTS is expected to be linked with the National Rail Network, which carry both passengers and freight within 5 line 505.3 kilometer network. It is expected to carry 69.1 million passengers per year, while the national rail is projected to transport 2.3 million passengers a year.

Turkey becomes export base for automotive manufacturers

Zaman Daily reported that Turkey is growing as an export base for automotive manufacturers and auto related sub industries because of its strategic market location, industry incentives, low cost, abundance of skilled labor, customs union with the EU and high technology and know how.

Emerging from a financial crisis in 2001, Turkey has successfully transformed itself into a highly competitive economy, attracting a sizable portion of foreign investment in the auto sector. Today, the industrial goods account for more than 90% of Turkey's exports, with automobiles the most sold item in this category. All indications show Turkey is on its way to becoming a global automotive hub.

Despite price hikes in raw materials such as steel, the latest figures show Turkey's automotive industry exports rose by 52% YoY in the January to April 2008 period, reaching USD 8.99 billion. Year wise export and import details in Turkey is as follows

In USD billion

The Turkish automotive sector reached a record level figure of 1.1 million motor vehicles manufactured in 2007 by attracting the attention of giant automotive firms. In the first quarter of 2008, the production figure increased by 42% YoY and projects indicate that another 250,000 vehicles will be produced by year end.

Mr Zafer Caglayan industry & trade minister of Turkey said that "Turkey aims to reach USD 25 billion in automotive exports and to allocate USD 20 billion for research and development by 2011."

Mr Erkut Özarman president of Association of Automotive Parts & Components Manufacturers said that "They expect to sell over 1 million vehicles to foreign markets by the end of this year. The capacity of auto plants reached over 100% this year as compared to 86% last year."

In the meantime new vehicle sales in Turkey shot up by 11.7% YoY in April 2008, reaching 50,956 units. But increasing fuel prices and less than favorable interest rates for loans in the country are major obstacle to domestic car sales. In the first quarter of 2008, 130,000 cars were sold to domestic consumers.

Saudi Arabia to expand oilfield to meet crude demand

Mehr News Agency reported that Saudi Arabia is pushing ahead with a costly project to expand its giant Manifa offshore oilfield, which will add nearly 900,000 barrels per day of heavy crude and meet an expected sharp growth in global demand for this type of crude.

The project is part of a program to lift Saudi's crude output capacity to 12.5 million barrels per day at the end of 2009 from around 11.3 million barrels per day currently to maintain its position as the dominant oil supplier.

The project has already prompted plans to build 2 large refineries with a combined output capacity of 800,000 barrels per day to handle heavy crude, while work is under way to construct a 41 kilometers causeway to link the field to the hub of the Gulf Kingdom's hydrocarbon industry on the eastern coast.

Saudi Aramco is carrying out the Manifa oilfield project, which will boost capacity to 1.2 million barrels per day.

Mr Ali A Al Ajmi VP for project management at Saudi Aramco said that "To meet worldwide energy demand, Saudi Aramco's latest Crude Expansion Program calls for an increase in crude oil production and higher maximum sustained capacity rates. The development of Manifa field was identified as a source for additional crude. In fact, Manifa has been called the launch pad for this expansion."

Describing the project, he said that Manifa's 6 reservoirs are rich in crude oil, qualifying it as a giant field. Its parameters begin close to Saudi Arabia's coastline east of Dhahran in the Eastern Province and stretch due northwest to the maritime borders of Iran and Kuwait. He added that "Manifa extends 15 kilometer offshore, 16 kilometer from Manifa Bay pier and 35 kilometer southwest of Safaniya."

Bahrain to privatize its sanitation facilities

HSBC, in a statement, said that Bahrain intends to privatize its sanitation facilities, a project worth at least USD 1 billion. It has appointed a group comprised of HSBC Bank Middle East, Fichtner Consulting Engineers and legal firm Norton Rose to advise on the deal.

Invitations for tenders for the roughly USD 150 million plant will be issued within weeks.

HSBC added that Bahrain has a population of about 1.05 million and the privatization plans include the construction of a new sewage treatment plant serving 500,000 people.

DWTC awards major construction contract to DTCD

Dubai World Trade Centre officially announced that it has awarded the development contract for the first phase of its Dubai Trade Centre District to Al Jaber LEGT Engineering & Contracting in a deal valued at AED 3.35 billion.

The contract will see ALEC take on the responsibility for the construction of phase 1 of the integrated commercial destination, which will include over 240,000 square meters of Grade A office space, along with a premium range of meeting, retail and hospitality facilities.

Mr Helal Saeed Almarri director general of DWTC said that "We are designing DTCD to be a world class urban destination at the core of Dubai’s commercial district, offering a blend of high end office and retail space complemented by luxury lifestyle offerings. Delivering a consistent standard of excellence across every aspect of the project requires that we leverage the professionalism and expertise of the best in the industry. In awarding ALEC the contract for the first phase of development, we believe we have selected the right firm to enable the highest quality result."

Mr Kez Taylor MD of ALEC said that "As a leading contractor, we have experience with a number of the region’s most iconic projects, and fully understand the enormous responsibility of delivering them on schedule and to the highest possible standard. DTCD is a truly remarkable project that will create a bold new business landmark at the heart of the UAE and we are very proud to be involved in its development."

DWTC’s other partners on the DTCD project include world renowned companies including Hopkins Architects to the WSP Group for structural engineering, and the Mace Group for project management.

DTCD is one of the most significant redevelopment projects currently being undertaken in the region, transforming the entire area surrounding the Dubai International Convention & Exhibition Centre in the commercial heart of Dubai into a business quarter of unsurpassed quality.

Chinese CRC export likely to increase further

It is reported that export offer for cold rolled steel coil are still on the rise and the upward trend is expected to spread into next month.

Export quotations for 1.0mm CRC by tier two steel makers are at USD 1060 per tonne to USD 1070 per tonne FOB and the contract price is about USD 1030 per tonne FOB.

Trades told Mysteel that it is difficult for them to take 1.0 CRC at a level under USD 1040 per tonne at moment, however overseas buyers have not been ready to accept the updated price level. Meanwhile, some traders are quite cautious and are not going to conclude any business with steel makers before seeing the market clearly.

In general, export price for cold rolled steel is expected to keep firm this month.

(Sourced from MySteel.net)

China completes feasibility study on steel futures

According to sources with the National Development and Reform Commission, China has completed the research project on feasibility study on launching futures trading of deformed steel bar and steel wire rod after one year of work.

The source added that the project provides reference for policy making on market conditions for launching futures trading of steel products.

The research is jointly conducted by such departments as the NDRC Industry Department and the Shanghai Futures Exchange.

Steel price declines in province Guangdong

It is reported that steel price continues to increase in Chinese domestic market, but it is unlikely to rise up significantly in a short term.

Mr Feng Bingwen secretary general of Iron & Steel Industrial Association in province Guangdong said that some steelworks in China have already reduced steel price slightly. He said that steel price may fluctuate slightly in a new future. He added that for a long term, we should wait for the final effect of the rise of raw materials price recently on steel market before we could judge how long the stable period would last.

China Iron & Steel Association analyzed that steel demand is still strong at present, but the growth rate of steel production drops back. It is the key reason for high steel price. Furthermore, the rise of fuel and coking coal prices and higher production and transportation cost are also main factors boosting steel price rise.

Mr Feng Bingwen agrees the opinion of CISA. He noted that the key reason for steel price increase now is the strong demand and high production would definitely drive steel price up.

According to statistics in first four months in this year, total fixed assets investment in China increased by 25.7% YoY. China’s crude steel output in April was 44.68 million tonnes up by 10.2% YoY and the growth rate slowed down. Cumulative crude steel output in China in first four months surged up only by 9.1% YoY.

For the production cist, international iron ore price rises up by 65% to 71% since April and coking coal price comes up by 205% YoY to 215% YoY which causes great impacts in iron and steel industry. CFR price of iron ore import in the end of April was USD133.83 per tonne up by 7.8% MoM.

China auto industry not affected much by earthquake

According to Morgan Stanley global financial services firm and market leaders in securities, recent earthquake will have a limited impact on China's auto industry as Sichuan Province accounts for only around 4% of the Chinese vehicle demand.

They said that passenger vehicle companies with relatively high exposure to Sichuan including Dongfeng PSA Citroen, Suzuki's joint ventures and Changan Auto will suffer in the short term.

Morgan Stanley in a note said that "Before the recovery of consumer confidence we expect at least 1 to 2 quarters there is little possibility of delivering notable sales in Sichuan province which accounts for around four percent of the nationwide passenger vehicle market. It said truck makers like Sinotruk and Weichai Power are expected to benefit from upcoming demand for infrastructure and housing reconstruction.

Morgan Stanley said "Propelled by the forthcoming post-earthquake reconstruction of infrastructure and housing, truck sales are expected to trend up further. Sales outlook for large displacement diesel engines will also be driven up by the surging demand for construction machines."

Morgan Stanley said the upper and luxury passenger vehicle segment will be the least affected because of its limited exposure to the Sichuan market, adding that Denway Motors has the highest average selling price and least exposure to the province of all auto companies under its coverage.

Taiyuan Steel hikes HRC prices for June productions

It is reported that Shanxi Taiyuan Steel raises HRC prices for June productions by CNY 200 per tonne to CNY 250 per tonne from prices released on April 23rd 2008. Prices for 3.5mm plus products are hiked by CNY 250 per tonne.

Latest EXW price for Q235 5.5mm HRC stands at CNY 4960 per tonne.

Prices listed above are EXCLUSIVE of 17% VAT effective as of May 23rd 2008.

China unlikely to intervene in domestic steel prices

Xinhua cited Mr Xiong Bilin Industrial Department deputy director of the National Development and Reform Commission as saying that steel prices in China should be decided by the market, with no government interventions.

Mr Xiong said these are his own personal opinions while commenting on Baosteel Group's delayed release of its price adjustments in the coming quarter which had been scheduled for May 20th 2008. He said that surging prices of imported iron ore would push up the costs of domestic steel makers by CNY 400 to CNY 600 per tonne.

Mr Xiong said the overall cost would rise by about CNY 1,000 per tonne, taking into account increased coke prices, shipment and energy charges. He said that the steel makers might want to pass on the cost rises to downstream enterprises, depending on what downstream players could afford.

Mr Xiong said "Among them, the electric appliance manufacturers could be weaker in taking on upstream price increases. The high steel prices will go down if they were unacceptable to downstream companies."

Chinese plate export price further increase

It is reported that there have been less steel plate exports from China recently with the continuous increase of export prices. Despite the rise in offers, transactions are said to be on the decrease.

Quotations for 12mm to 40mm commercial HR plate by tier two steel makers are at about USD 1080 per tonne FOB to USD 1140 per tonne FOB which compares with USD 1160 per tonne FOB to USD 1180 per tonne FOB by tier one steel mill

A tier one producer tells Mysteel that it is quoting 12mm to 30mm*2.5mm plate at around USD 1270 per tonne FOB as base for all classifications. By comparison, Shagang, a Jiangsu based private steel mill has shot up its offer to USD 1300 per tonne FOB up for its wide ship plate.

Chinese HRC export prices further increase

It is reported that Chinese steel makers have shot up export quotation for Chinese hot rolled steel coil again following the step of the increase in both domestic and international market.

Export offers for commercial 4.75mm up HRC are prevailing at USD 960 per tonne to USD 980 per tonne an increase of USD 20 per tonne to USD 30 per tonne from early May.

Sources say that Heibei based Tonghua Steel tells Mysteel HRC is quoting at USD 960 per tonne FOB which is believed to be comparatively lowered among others. Laiwu Steel is also tagging at similar level of USD 960 per tonne FOB to USD 980 per tonne FOB June production and July shipment. Jinan Steel has raised quotation to USD 970 per tonne to USD 980 per tonne FOB for 4.0mm up commodity grade HRC late June or early July shipment.

In general, export offer for Chinese HRC is on the way to USD 1000 per tonne FOB. As a matter of fact, Q3 price offer by Japanese steel makers have already exceeded USD 1000 per tonne FOB with Nippon Steel at USD 1050 per tonne and JFE at USD 1040 per tonne FOB to USD 1060 per tonne FOB for shipments to South Korea which compares with USD 980 per tonne by Shagang and USD 970 per tonne FOB by Anshan steel.

China 2012 auto steel demand projected at 12 million tonnes

XFN-Asia cited Mr Dai Zhihao vice president of Baosteel Group Corp while speaking at an industry conference said that Chinese demand for sheet steel used in auto production is projected at nearly 12 million tonnes in 2012 from 7.3 million in 2007.

Mr Dai said that “Baosteel continues to lead the market and along with Angang Steel, Wuhan Steel and we jointly control 79% of the cold rolled auto sheet market. He said that Baosteel has a 45.4% share of China's cold rolled auto sheet market.”

But he added that new market entrants and the upgrading of products from current industry participants is raising competition in China.

Mr Dai said “Domestic producers are quickly improving inner panel production with Angang and Wuhan Steel now able to produce wide sheets. He said that Guangzhou JFE is obtaining foreign support in improving its competitiveness, while Maanshan, Bengang and Capital Steel are also entering the market.”

He added that foreign groups like South Korea's P0SCO and Japan's JFE and Nippon Steel have a combined market share of nearly 20% in the high end auto sheet steel market with imported product still likely to play a significant part because of insufficient local supply.

On the other hand, new entrants are likely to start out with lower grade product, possibly leading to oversupply in these segments.

Taigang donate another CNY 5 million for earthquake relief

It is reported that with earthquake relief continues on and the reconstruction of earthquake hit region will begin in short time, Taiyuan Iron and Steel decided to donate another CNY 5 million. With a donation of CNY 6.5 million on May14th 2008 Taigang has had a donation of CNY 11.5 million in total till now.

According to Taigang as a large state owned company, taking social responsibility is the duty of the company.

CNPC estimates direct losses of CNY 1.78 billion from quake

It is reported that China National Petroleum Corp, PetroChina's parent, has suffered about CNY 1.78 billion of direct economic losses from the Sichuan earthquake last week.

CNPC said in a statement that PetroChina gas stations were partially damaged during the earthquake, and 65 of them halted operations. Its oil and gas fields, refining plants and oil pipeline in Sichuan, Shaanxi and Gansu provinces and in Chongqing municipality have also been affected.

To ensure oil supply to the quake hit regions, CNPC has dispatched 16 tank trucks and 5 mobile fuel tankers to Wenchuan and made an emergency move to allocate 100,000 tonnes of refined oil to Sichuan through railway, expressway and waterway from Northeast and East China.

CNPC also said its daily gas output has reached 99% of its full capacity in quake hit Sichuan province which accounts for nearly one fourth of its total all across the country.

China among interested investors for Cameroon port

Reuters reported that companies from China, Canada and Europe have expressed interest in investing in the building of a USD 655 million multi purpose deep seaport in south Cameroon that will serve major mineral export projects.

Mr Louis Paul Motaze Minister of Cameroon's Economy, Planning and Regional Development told Reuters that a Chinese company, China Harbour Engineering Co had shown interest in taking on the entire project. He said that other companies from Canada, Europe and Africa were interested in buying stakes in the port project whose initial cost was estimated at XAF 282 billion.

Mr Motaze said "We have been very encouraged by this enthusiastic response and from the way things are progressing I am now very certain construction work on the first phase will start in 2010 and the first traffic will flow through the port by 2013."

He said that the interested investors were insisting on build, operate and transfer arrangements for the project. They had requested more information and follow up meetings would be held before it was decided who the final partners would be.

Mr Motaze said the proposed new deep seaport near Kribi would be able to take much larger vessels and would be linked by road and rail to major iron ore, cobalt, nickel and bauxite mining projects under development in Cameroon's interior. This included a proposed 490 kilometer railway line between the projected port and the Mbalam iron ore project of The Cameroon Iron Ore Company controlled by Australia's Sundance Resources.

When completed, the projected port was also expected to serve as a major shipment point for tropical hard wood from south eastern Cameroon, northern Gabon and Republic of Congo.

Magang donates CNY 15.00 million for earthquake relief

It is reported that to support the rescue and reconstruction in earthquake hit region in Sichuan, Magang donated another CNY 1.7 million putting the total amount to CNY 15 million.

Besides, the donation by employees in Magang has accumulated to CNY 6 million.

Earthquake impact on aluminum smelters still unclear

Interfax China reported that damaged facilities and disrupted power supplies are expected to affect aluminum smelters in earthquake hit areas of Sichuan Province though broken communication lines has made it difficult to calculate the degree of impact.

According to State Grid, 6 transformer substations were shut down, reducing power supply to the Sichuan power grid by 4 million kilovolts after a 500 KV and five 220 KV transformer substations in Sichuan were affected by the earthquake. In addition, 5 power plants in western Sichuan were disconnected from the power grid.

Mr Huang Fulong an analyst at Kaichao Investment Bank said "Any possible structural damage to facilities or power cuts will heavily impact aluminum production. Sichuan Meishan Aostar Aluminum Company Limited and Sichuan Guangyuan Aostar Aluminum Company Limited in Sichuan's Meishan City and Guangyuan City close to Wenchuan County are likely to be affected.

He said that "Communication in those areas struck by the earthquake was cut though making it impossible to receive up to date information."

Mr Li Yang an analyst with Beijing Antaike Information said "Although the possible impact of the earthquake has not yet been confirmed, an aluminum smelter in Sichuan said the affect on production is minimal. However, the current lack of direct communication to the earthquake affected areas prevents us from confirming the information and all we can do is wait and see if smelters have cut production or shut down altogether."

He said that "Domestic aluminum prices, which may temporarily go up due to the disruption are not expected to be affected in the long term as long as there are no major production cuts or halts."

Chinese GD Power to buy stake in insurer

Reuters reported that GD Power Development Co, a major electricity and heat supplier, plans to pay CNY 105 million for a stake in a new life insurer to expand into the financial sector.

GD Power said in a statement to the Shanghai Stock Exchange that GD Power will take an 8.3% stake in Century Life Insurance Co and become one of its biggest shareholders along with six other investors in the new company.

GD Power Development Co said "We will build a financial platform to facilitate the company's development and cultivate new engines for growth. It said Century Life based in the northern Chinese city of Dalian aims eventually to attract overseas strategic investors and sell shares publicly.”

GD Power's net profit surged 68% to CNY 1.68 billion in 2007 while revenue climbed 32% to CNY 17.53 billion as it cut costs increased generating capacity and purchased assets from its state parent.

Cosco in search of local partners in Philippines

It is reported that China Ocean Shipping Co is exploring for local partners for the various components of its long delayed shipping and logistics hub in the country.

Mr Francis Chua the Philippines’ Special Envoy to China for Trade and Investments told reporters that Cosco would continue to pursue the project earlier estimated at USD 5 billion in the Philippines.

He said that “Cosco is now in the stage of working out local partnerships for the shipping hub, shipbuilding, industrial estate and maritime school which are components of the integrated shipping and logistics hub it proposed to undertake in the country.”

Mr Chua said he has recently talked with Mr Wei Jiafu CEO & president of Cosco Group’s regarding the matter that “They are still pursuing the project, but they are taking their time. Rather than invest directly, the company is now looking for local partners for possible joint ventures.”

Mr Chua said following the scandal involving another Chinese firm ZTE Corp, the company had opted to reconfigure further its plans and look for a local partner instead of taking on the project on its own.

Severstal to buy 61.5% stake in African Iron Ore Group

OAO Severstal announced that it has reached agreement to purchase up to a 61.5% stake in African Iron Ore Group Ltd which owns, through subsidiaries the exploration rights for an iron ore deposit at Putu Range area in Liberia.

The released added that in addition Severstal will acquire a 6.29% stake in Mano River Resources Inc together with share warrants exercisable within a period of 18 months. If exercised in full, the warrants will convert into shares representing approximately 6.29% of the current issued share capital of Mano River Resources Inc. prior to giving effect to the issuance of shares to Severstal.

The purchase of the AIOG controlling stake and 6.29% stake in Mano River will be affected through Severstal’s indirect wholly owned Dutch subsidiary Lybica Holding B.V. Severstal will pay USD 37.5 million for 61.5 % stake in AIOG and EUR 2 million for the 6.29% stake in Mano River Resources Inc.

The agreement to purchase the AIOG stake contains customary warranties and indemnities provided by Mano to Severstal and completion is subject to Mano River Resources converting its exploration license into a Mineral Development Agreement in addition to customary conditions to closing, including approval of the TSX Venture Exchange and completion of satisfactory due diligence by Severstal.

Mr Roman Deniskin CEO of Severstal Resurs said “The purchase of this iron ore deposit in Western Africa is a significant step in the dynamic development of the Severstal mining business. From this new region we will supply production to the European and North American markets.”

According to preliminary data, it is estimated that the Putu Range deposit contains at least 500 million tonnes of iron ore. This number may substantially increase as a result of a detailed exploration exercise which is planned by Severstal Resurs.

ArcelorMittal to construct plant in Leningrad Region

Kommersant reported that ArcelorMittal intends to build in St Petersburg’s Leningrad region a maker of car pressed parts. The new facilities will be located near Eurodisk where Italian Magnetto bought out 50% in mid April. ArcelorMittal is a co owner of Magnetto and the analysts say it may invest EUR 100 million in the project.

The plans of ArcelorMittal to construct a plant in the Phosphorite industrial area were reported by Mr Vitaly Balitsky chief expert of the investment department at Kingisepsky district of the Leningrad region. The company intends to arrange production of automotive bodies, Balitsky specified. The information was confirmed by the Leningrad region’s authorities.

Mr Sergei Kuklin Deputy Vice Governor of Leningrad region’s said “The company is interested in constructing a metal processing plant in the Leningrad region, to be more precise in Phosphorite industrial area.” ArcelorMittal declined to comment, reasoning those plans hadn’t been announced officially.

The plans of ArcelorMittal for building a plant in the Leningrad region are no secret to Mr Sergei Bodrunov president at St Petersburg Association of Auto-Component Manufacturers. According to Mr Bodrunov ArcelorMittal could be late in the market, as quite a number of projects for metal pressing parts have been voiced already. Amid them are the projects of Magna, Stadco and Magnitogorsk Iron & Steel Works. Mr Bodrunov said “Given those costs, I think ArcelorMittal will invest at least EUR 100 million.”

In the Leningrad region, they say off the record, that Eurodisk plant is aggressively lobbying ArcelorMittal. Eurodisk announced the sale of 50% to Italian Magnetto in April. Eurodisk briefer Andrei Abashin confirmed his company’s cooperation with ArcelorMittal, but declined to comment on the new project.

Russia government mulls steel export duty - source

Reuters quoted industry source said the Russian government is considering a tariff on exports of steel products in order to push down rising domestic prices.

The source said that Mr Viktor Khristenko head of the newly formed Industry and Trade Ministry made the suggestion earlier this week at a meeting with the heads of major steel and pipe producers but no decision was reached.

The source speaking on the condition of anonymity that "Metals producers were told to prepare their proposals on solving the problem of rising prices before June 20 and adding that it was uncertain whether a tariff will be imposed.”

The ministry confirmed in a statement on its website www.minprom.gov.ru that the meeting had taken place, but it only said that the participants had decided to create a working group to elaborate proposals on fine-tuning metals sector policy. The ministry said heads of steel producers Mechel, Severstal, MMK, NLMK and Evraz as well as pipe producer TMK participated in the meeting.

Responding to media reports analysts said that the tariff would be likely to hurt steel producers.

RALSIB investment bank said in a note that "The news is clearly negative for the sector and may result in profit taking in the Russian steel majors. We believe the flat product producers NLMK, MMK and Severstal are most at risk."

Troika Dialog analysts said "The company that would probably take the most serious hit from the new export regime would be Magnitogorsk Steel which exports just under 50% of its output mainly in the form of hot and cold rolled coil."

However, analysts are not convinced that the tariff will in fact be imposed.

Troika Dialog said in a note "The risk of export duties being introduced will cast a pall over the sector, dampening sentiment until the situation is resolved. For the time being, however we rate the risk as moderate."

Nippon Steel negotiate steel plate export with VSW

It is reported that Japanese Nippon Steel is negotiating plate export price for the third quarter with Russia Vyksa Steel through Mitsui.

VSW would like to buy some 100,000 tonnes of plate in 2008 from Nippon Steel Corp From the market estimation, the price will be USD 1,800 per tonne FOB with export quantity amounting to 20,000 tonnes.

Nippon Steel is facing the strong demand of plate in domestic and even oversea market, especially shipbuilding industry and machinery industry.

(Sourced from YIEH.com)

UC RUSAL enterprises net profit in Q1 dips

Interfax reported that most of the enterprises that make up United Company RUSAL saw their unconsolidated financial results under Russian accounting standards slip in Q1 2008 compared to the same period of 2007.

1. RUSAL Krasnoyarsk reduced net profit almost 50% to RUB 1.341 billion in the quarter and sales revenue 6% to RUB 9.479 billion. The plant increased net profit 21% in 2007 to RUB 8.068 billion.

2. RUSAL Bratsk reduced sales revenue 15.8% to RUB 7.134 billion in the quarter and net profit 47% to RUB 1.042 billion. The plant reduced net profit 8% in 2007 to RUB 4.587 billion.

3. RUSAL Achinsk saw its net profit fall 11.2% to RUB 633.9 million in the quarter although sales revenue increased by 18.1% to RUB 3.956 billion. The company reduced net profit almost 50% in 2007 to RUB 2.252 billion.

4. RUSAL Boksitogorsk posted net profit of RUB 24.247 million in the first quarter of 2008 down by 33.8% YoY from the same period of 2007. Sales revenue fell 0.5% to RUB 568.494 million in the period.

The report added that RUSAL Novokuznetsk was the only company that managed to increase net profit in the period. The plant saw net profit rise 43.5% to RUB 398.3 million and sales revenue grow 37.1% to RUB 3.4 billion. RUSAL Novokuznetsk increased net profit more than ten fold to RUB 1.597 billion in 2007.

Severstal Auto renames two car plants

Interfax reported that Russian carmaker Severstal Auto has renamed its subsidiaries OJSC ZMA and LLC Severstalauto Elabuga.

The report added that ZMA which produces the South Korean SUV SsangYong and Fiat cars has been renamed OJSC Sollers Naberezhniye Chelny while Severstalauto Elabuga which produces the Fiat Ducato will now be called LLC Sollers Elabuga.

The legal renaming of automotive plants owned by Sollers in the Republic of Tatarstan is being accompanied by a change in the plants' corporate style.

Severstal-Auto said earlier it was changing its name to Sollers.

South Korean STX Group to build shipyard in Azerbaijan

Yonhap reported that STX Group a mid sized South Korean conglomerate plans to build a shipyard in Azerbaijan by 2011 as part of efforts to tap into the Transcaucasian country's shipbuilding market.

Along with two Azerbaijani companies the Azerbaijan Investment Company and the State Oil Company of Azerbaijan the group plans to spend a total of USD 430 million on the project.

According to the South Korean business group the shipyard will be 65% owned by the SOCAR with STX Group and the AIC holding stakes of 25% and 10% respectively. But STX Group said it will be wholly responsible for the operation of the shipyard.

STX Group, which has the world's fifth-largest shipyard STX Shipbuilding Company under its wing also has a shipyard in China.

Stakhaniv railcar plant to double statutory fund

It is reported that shareholders of Stakhaniv Railcar Plant decided at their AGM recently to increase the statutory fund to USD 15.69 million up by USD 7.85 million. The attracted funds will be used to increase SVGZ's working capital and finance its capital expenditures. The issue of 37.73 million new shares will be sold at par value of USD 0.21.

The shares subscription will be held in two stages from July 08 and July 29th 2008 with an ex rights date of July 7th 2008. Shareholders are offered the opportunity to subscribe on a pro rata basis for new shares during the first stage of subscription which will be no less than 15 days.

Shareholders also decided to include Progress Plant and Zaliv Shipyard both related to Finance & Credit, in the list of other investors and, therefore, to allow them to subscribe for new shares during the second subscription stage. Shareholders also approved the 2007 financial results and voted to channel 2007 net income to cover losses of previous years. It was also announced that SVGZ plans output at 30,000 tonnes of items in 2008.

After the AGM, Mr Misevra head of SVGZ's supervisory board said that the company expects to produce 7,200 railcars in 2008 up by 29.6% YoY. He also said that it is not clear whether the SVGZ will go for an IPO as part of KrAZ holding or on its own.

The new 2008 production target is positive news for SVGZ as it is above our expectations of 7,070 units and the management's previous plans of 6,600 railcars. Our positive view on the plant is also supported by the confirmation of its plans to increase steel structure and railcar capacities to 52K tonnes and 10,000 cars respectively by 2009 to 2010. SVGZ's market price adjusted to the new number of shares is USD 4.76 against the current USD 9.31.

(Sourced Millennium capital)

Zaporizhya Auto production in 4 months up by 33% YoY

Zaporizhya Automobile Plant announced that 4 months 2008 passenger car production up by 33% YoY to 102,462 vehicles.

The released added that the growth exhibited by ZAZA is less impressive than that of Bogdan Corp 55% the company is the best positioned to withstand any immediate adverse effect of Ukraine's joining WTO as it the only one at present engaged in higher value added CKD assembly work.

Investors in the company can nurture hopes for an IPO of the parent company UkrAVTO to improve liquidity. The preparations for such an IPO have been announced by Mr Tariel Vasadze CEO of UkrAVTO’s and the expected date is in one to two years' time.

(Sourced Millennium capital)

TransContainer ink JV with Transgroup to build terminal at Zarubino

It is reported that Russian container shipping company TransContainer and railway operator Transgroup have signed an agreement to build a container terminal at a cost of over USD 100 million at the Zarubino seaport in the Primorsky region.

As per report the two companies plan to set up a joint venture to implement the project.

The terminal, covering over 18 hectares will have an annual capacity of 400,000 TEUs and is expected to be completed in five years.

The Zarubino seaport is an ice free port located at the junction point of the borders of Russia, China and North Korea. It is managed by Transgroup.

Tatneft demands compensation for Ukrtatnafta

Ukrainian Journal Staff reported that Russian oil producer Tatneft has demanded more than USD 1 billion in compensation from the Ukrainian authorities for infringements on its rights as a shareholder in the Ukrtatnafta oil refinery.

Tatneft said "The claim has been posted to Ukraine's official agencies, which represent the state as respondent in this dispute. The claim is for more than USD 1 billion."

Russia sees rise in electricity output

Russia Federal State Statistics Service reported that Russia's electricity production up by 4.6% to 374 billion kilowatt hours in January to April 2008 compared to a year earlier. Specifically, nuclear power plants boosted electricity output 4.3% to 56.5 billion kilowatt hours.

Thermal power plants raised production 9.5% to 265 billion kilowatt hours while hydroelectric power plants' output dropped 14.7% to 52.1 billion kilowatt hours. At the same time, coal production went up by 6.6% to 111 million tonnes.

Smart Holding to invest USD 1.5 billion on Mykolaiv port

Ukrainian Journal cited Mr Oleksiy Pertin director general of Smart Holding in an interview with the Investgazeta newspaper said that Smart Holding managing company plans to invest over USD 1.5 billion in a project to build a deep water port on the basis of Ochakiv Port Ltd in Mykolaiv region.

He said that the Ochakiv port would be deepened to 15 meter to 17 meters, an iron ore transshipment and storage terminal with a capacity of 15 million tonnes per year and coking coal transshipment and storage terminal with a capacity of 5 million tonnes would be built.

ShalkiyaZinc earnings plummet 91% in 2007

Interfax reported that Kazakh zinc miner ShalkiyaZinc saw its net profit down nearly by 91% to USD 733,000 in 2007 from USD 8.017 million in 2006.

ShalkiyaZinc sales revenue grew by 27.9% to USD 30.3 million. It assets grew from USD 65.232 million to USD 108.704 million and its equity stood at USD 8.719 million at the end of 2007.

ShalkiyaZinc has said it mined 738,000 tonnes of ore in 2007 less than half of what it planned but still 88% more than the 392,000 tonnes it extracted in 2006. The company processed 645,200 tonnes of ore up by 51% from 427,000 tonnes.

Production of zinc in concentrate rose 43% to 28,200 tonnes and lead in concentrate grew 17% to 7,100 tonnes.

ShalkiyaZinc's aimed to mine 1.5 million tonnes of ore in 2007 and is targeting the same amount in 2008.

Petrochemicals firm Sibur Q1 profit up by 41.6% YoY

RIA Novosti reported that Sibur Holding, Russia's largest petrochemicals company net profit calculated to Russian Accounting Reporting Standards up by 41.6% YoY in Q1 to RUB 6.48 billion.

Sibur Holding, which was established in December 2005 said its revenue in the reporting period grew 6% to RUB 33.5 billion pre tax profit climbed 43.3% to RUB 8.54 billion and gross profit was up by 37% to RUB 10.73 billion.

Sibur Holding production costs decreased 4.2% in the reporting period to RUB 22.8 billion.

ISSF sees crude SS output in 2008 to exceed from that in 2007

International Stainless Steel Forum expects that the output of crude stainless steel in 2008 will exceed from that in 2007. It has also forecasted that the increasing cost of raw materials such as chrome, iron and manganese will have great impact in stainless steel industry.

Ferrochrome price has reached USD 5,400 per tonne from USD 2,000 per tonne in the end of last year. Since nickel price kept rising in May 2008 2007, the stock level of stainless steel dropped unprecedentedly. Global stainless steel output in 2007 reached 27.7 million tonnes and expected to grow to 29 million tonnes by 6%.

According to ISSF research, Asia is the biggest stainless steel output area and the only area around the world with the growth of stainless steel production output. Although stainless steel output in EU and Africa declined in the second half year, the output is expected to rise in 2008.

Acerinox plans SS expansion at Columbus mill

Bloomberg reported that Acerinox SA, which owns Africa's biggest stainless steel mill, is planning to expand its cold rolled stainless steel production at the Columbus mill in South Africa by 25% to 45,000 tonnes a month.

BHPB opens USD 2 billion nickel mine in Ravensthorpe

BHP Billiton has officially opened its USD 2 billion nickel mine near Ravensthorpe in Western Australia. The project's budget has blown out by more than USD 1 billion, but it is confident the industrialization of China will keep nickel prices strong.

The mine is considered a risky project because laterite nickel requires advanced technology to process the ore into a product that can be used to manufacture stainless steel.

BHPB said that its Ravensthorpe nickel mine will reach full capacity of 50,000 tonnes a year by 2010 after facing long delays and cost overruns. The project, which started production in 2007 about nine months behind schedule is one of the largest nickel making facilities in the world.

Ravensthorpe has faced spiraling materials and labor costs over its 4 year development phase, which saw its initial cost estimate more than double. The project employs complex technology involving the leaching of dry ores known as laterites. Earlier attempts at the process in Western Australia have struggled for viability.

Import price of chrome ore at Tianjin port

Price CNY per MTU
(Sourced from MySteel.net)

Market price of imported ferronickel in China

Price CNY per tonne
(Sourced from MySteel.net)

Glencore looking for stake in Katanga Mining

Swiss commodities trader Glencore International AG is considering upping its stake in TSX listed Katanga Mining Ltd as the Democratic Republic of Congo copper and cobalt producer seeks to move into profit.

Glencore said that it may buy more Katanga Mining shares in open market trading or through private transactions. Through its Bermuda registered unit Glencore Finance Ltd it currently holds 12.4% of Katanga Mining.

Glencore had previously disclosed it had no plans to acquire any additional stake in Katanga Mining but it has reviewed its investment alternatives and has determined that it may increase its equity ownership in Katanga. Glencore however did not say by how much it would seek to increase its stake. But it has always been stepping in whenever things go wrong in the Canadian company.

Last October, Glencore also came to the rescue of Katanga after an attempted takeover of the company by Central African Mining & Exploration Company fell through, pumping in USD 150 million through a one year loan facility.

Katanga operates a mining complex in the DRC's Katanga province, whose key assets include the Kamoto Underground Mine and KOV open pit mine, providing sulphide and oxide ores respectively and the Kamoto Concentrator, Luilu Metallurgical Plant and a planned SX/EW refinery for the onsite production of refined copper and cobalt. It also owns a number of other mines and plants.

NDRC signs order for easing high iron ore inventory in ports

It is reported that Mr Xiong Biling director of National Development and Reform Commission revealed on May 22nd 208 that he has already signed document for easing high iron ore inventory in ports but the detailed time has not set.

As per report the document asked steel enterprises and traders to clear off high iron ore inventory in ports within the deadline and improve the storage charges in ports.

Statistics from China Iron and Steel Association shows the total import iron ore from January to April 2008 period reached to 153.49 million tonnes increased by 20.19 million tonnes as compared to January to April 2007. The average daily iron ore import from January to April was 1.268 million tonnes, mush higher that the iron ore demand from steel industry.

The high iron ore inventory in ports brought a series of problems, such as downstream bad railway transportation, handing capacity held up in ports etc. Therefore, the document asked steel enterprises to transport its iron ore and improve storage charges in order to ease high iron ore inventory in ports.

Australian coal stock gains on takeover speculation

Bloomberg reported that Felix Resources Ltd and Gloucester Coal Ltd surged to records in Sydney, pacing gains by producers of the fuel on speculation of increased industry takeovers. As per report Felix which has more than doubled this year jumped as much 12% on the Australian stock exchange and Sydney based Gloucester advanced 5%.

The speculation has been spurred by ArcelorMittal's purchase this week of a 14.9% stake in Macarthur Coal Ltd for AUD 631 million.

UBS AG in a report this week said that acquisitions of coal and iron ore assets in Australia will rise as steelmakers try to reduce costs.

Mr Andrew Sekely head of Australian equities at Intersuisse Ltd said that “Coal stocks are gaining because of the level of corporate activity that has occurred in the sector. The market is going through the process of trying to find what may be next one. Felix certainly will be one stock that could easily come into play.''

Mr Glyn Lawcock UBS analysts led by Sydney based in the report said that “We expect there to be further consolidation within the sector as steel producers globally recognize the increasing importance of securing supplies of iron ore, coal and manganese.”

Aquila to spin off coal and iron ore exploration assets

Bloomberg reported that Aquila Resources Ltd is planning to spin off some of its exploration assets in Australia and Africa to create Aquila Exploration Ltd.

Aquila Resources in a statement said that shareholders will receive 1 share in the new company for each share they own and the new company will have AUD 20 million in cash and will trade on the Australian stock exchange.

The statement added that Aquila will keep its producing asset, the Isaac Plains coal mine in Queensland state as well as its AUD 3.9 billion iron ore port, rail and mining project in Western Australia. The new company will own coal projects in the Bowen Basin region, source of about 40% of the world's exports of the fuel.

Mr Tony Poli chairman of Aquila Resources said that “There is a different culture and management structure required to develop major resources projects than that required to identify, acquire and appraise them.”

Atlas Iron finalizing offtake deals

Atlas Iron Ltd will cross a major threshold in its development when it announces an offtake deal in the next few weeks. The deal could be for one or more arrangements to buy some or all of Atlas' ore, possibly by the end of the month and it marks a milestone in the company's transition from iron ore explorer to miner and exporter.

Mr David Flanagan MD of Atlas said that the company had been approached with about 100 offtake offers, half of which could be considered seriously. He added that these included proposals from about 35 Chinese majors.

Mr Flanagan told journalists after the company's annual general meeting in Perth that "These would either be massive conglomerate trading companies or massive steel mills. The balance are from Malaysia, Korea, Taiwan, the Middle East and some Indian groups, who are looking to develop a project in the Pilbara that they can then export into China."

Mr Flanagan said that Atlas had tried to include as many shareholders as possible, but given volatile financial markets the best way to raise fund was through institutional investors and they had continued to buy shares.

He added that the company would begin exploration drilling at its landholdings in Western Australia's mid west region the next few weeks.

Mr Flanagan also said the company was on track to commence production at its Pardoo project near Port Hedland as soon as August but more likely in October.

Week long fire destroys 3 million tonnes of coal at CIL CCL

Ranchi Express reported that the major fire that had engulfed coal stocked at Piparwar area of Central Coalfield Limited, a week ago, has been controlled. The coal firm had to opt for soil carpeting to control the raging inferno. The fire tenders and water hoses had proved ineffective against the fire.

The officials however failed to quantify the amount of stock that was gutted in the fire. They also denied the fact that the coal stock kept at Piparwar area was more than 3 million tones. As for the causes that led to the fire, the officials said that "Coal being a volatile product, the fire might have been caused due to spontaneous heating and friction. The exact causes would be known only after enquiry, which would begin soon. The enquiry would also ascertain the stock gutted in fire."

On being informed that some could still be seen coming out of the stock area, the official said that the flames have been doused. The area management has kept the whole under observation to ward off any recurrence of fire.

Chinese are buying less Australian iron ore – Baltic chief

According to Baltic Exchange Ltd, Chinese steelmakers are shunning imports of Australian iron ore as negotiations on the raw material's price have dragged on to almost seven weeks more than usual.

Mr Jeremy Penn CEO of Baltic Exchange's in an interview on Bloomberg Television said that steelmakers are instead hauling more of the steelmaking ingredient from Brazil, increasing average voyage lengths and boosting commodity shipping rates to records. It costs AUD 45.29 a tonne to ship iron ore to China from Australia compared with AUD 107.58 from Brazil.

Mr Penn said that “The Chinese are simply not buying as much iron ore right now from Australia.”

BHP Billiton Ltd and Rio Tinto Group are locked in negotiations with Chinese steelmakers over the 2008 contract price for iron ore. They want a bigger increase than the 65% that Brazil's Cia Vale do Rio Doce achieved to reflect the freight savings that can be made by shipping ore from Australia rather than Brazil.

Baobab gets good sampling results in Tete iron ore province

Thomson Financial reported that Mozambique focused exploration company Baobab Resources Plc results to date from its Tete project give further credibility to the concept of a large iron ore province, of which only a portion has been previously recognized.

Baobab Resources said that rock chip sampling from Massamba Group vanadiferous titano magnetite deposits returned average grades of 49% of iron, 21% of titanium oxide and 0.3% vanadium.

The company said that Massamba grades are virtually identical to those reported from Singore, indicating that the two project areas may be members of the same mineralized system that extends over significantly greater strike lengths than previously anticipated.

Mr Ben James technical director of Baobab said that "The company considers the Tete Mafic Complex to be highly prospective and relatively under explored. This, coupled with the unprecedented levels of investment into power, transport and mining, makes the Tete area a premier exploration address.”

China to raise Tianjin port iron ore warehouse fees

Reuters reported that China will raise warehouse fees for imported iron ore from June 1st 2008 at Tianjin as the government moves to cut iron ore stockpiles that are clogging Chinese ports.

Stockpiles of imported iron ore at Chinese ports have hit an all time high of nearly 80 million tonnes, while the high volume of imports has boosted freight rates and spot ore prices, putting Chinese users at a disadvantage in price talks with Australian miners.

Beijing has called on major steel mills in China to clear out their holdings in port warehouses, which traders believe account for two thirds of the total stocks and have been built up in part due to cheap warehouse fees.

According to the port document, obtained by Reuters said that iron ore stockpiles that have been stored in warehouses in the Tianjin port for more than 90 days will be charged CNY 0.4 per tonne per day and stocks in storage for more than 60 days will be charged CNY 0.2 per tonne a day while storage during the first 30 days remains free of charge.

Trading sources said that domestic spot iron ore prices may ease if as much as half of the port stocks were moved, but they did not expect a major impact as a large chunk of the port stocks was low grade.

A senior iron ore trader based in Beijing said that "They may liquidate the stocks, putting downward pressure on the spot price. They have been holding on to the stocks as import costs were high.”

He said that “Costs for holding onto the stocks will increase, while with the government moves, spot prices are unlikely to go up."

Many Chinese steel mills have failed to expand their stocking yards for iron ore in line with their increases in production capacity, partly due to cheaper costs at port warehouses. They added that transportation bottlenecks, including a shortage of trucks and rail transport, have worsened the situation.

Xstrata Canada announces intention to redeem preferred shares

Xstrata plc's subsidiary Xstrata Canada Corporation announced its intention to redeem all of its outstanding Cumulative Preferred Shares, Series H and Series 2 by the end of Jul