Wednesday, March 31, 2010

New raw material contracts could push up global steel prices by $150/t, some 20-30%

New iron ore prices, together with increases in the cost of other raw materials such as coking coal and scrap are likely to push up steel-makers’ costs this year by $150/t. This is equivalent to approximately £100/t or €110/t.

On 30 March, Australia’s BHPB announced that it had agreed new short term iron ore contracts with Asian customers. In addition, several Japanese mills confirmed that they signed quarterly contracts with Brazil’s Vale at around 90% higher prices. BHPB and Vale are two of the world’s three largest suppliers of iron ore.

The implications for many of the world’s steel producers are massive both in terms of much higher costs and much shorter term price contracts. Fixed 12 month prices are being replaced by prices closer to the volatile spot iron ore market, and annual contracts are being replaced by quarterly contracts. Buyers of steel will be hit by a double whammy.

Taking the figures given to Steel Business Briefing, in 2010 most integrated steel producers may well have to pay around 90-100% more for their iron ore, 55% more for their coking coal and double for their scrap in 2010. Consequently their costs could be around $150/t higher this year than in 2009.

Roger Manser, managing editor of Steel Business Briefing notes that – as a result of the producers passing on these higher costs - many steel consumers are already facing a 20% rise in the cost of their steel, and there may be another 10% still to come. “This will add significantly to the costs of construction, as well as push up prices for cars, washing machines and fridges.”

Rio Tinto receives binding offer for Alcan Beauty Packaging business

Rio Tinto has received a binding offer from Sun European Partners, LLP (Sun European Partners) to acquire the Alcan Beauty Packaging business. The terms of the offer are confidential.

A period of exclusivity with Sun European Partners has been agreed, and Rio Tinto will respond to this binding offer following consultation with the relevant European works councils.

Guy Elliott, chief financial officer, Rio Tinto, said: “This binding offer is another important step towards completing the divestment of the Alcan Packaging businesses. Sun European Partners has a strong track record of investing in the packaging industry. We believe the offer is in the interests of all stakeholders and represents a good outcome for our shareholders.”

The Beauty division employs around 8,000 people, operates 26 plants in 12 countries and is a global leader in the plastic beauty packaging market. Alcan Beauty Packaging is the only part of Alcan Packaging still owned by Rio Tinto, with the exception of the Medical Flexible operations in the US which are the subject of an agreed transaction with Amcor that is currently under review by the US Department of Justice.

Sun European Partners is the European adviser to Sun Capital Partners, inc, a global private investment firm with offices in Europe. It has significant experience in the paper and packaging market.

Completion of the potential transaction would be subject to customary closing conditions.

Rio Tinto has now completed divestments in excess of $10 billion since the beginning of 2008. In 2010, the Group has completed divestments of US$3.5 billion comprising Alcan Packaging Food Americas, Alcan Packaging global Pharmaceuticals, global Tobacco, Food Europe and Food Asia divisions, Vickery (Coal & Allied) and Maules Creek (Coal & Allied).

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Euro IV norms in 13 cities, but rest of India left in the lurch

  • By April 1, 2010, 13 cities in India will have Bharat Stage IV norms for fuels and vehicles. Bharat Stage III norms will come into force in the rest of the country.

  • However, while the oil industry is already phasing in the supply of Bharat Stage III fuels, the automobile industry wants deferment of the norms for vehicles until October

  • The government must ensure that this schedule is not delayed any further. Automobile industry must also be asked to follow it

  • Any deferment will delay clean-up of vehicle fleets in our polluted cities. Bharat Stage IV emissions standards will halve the PM and NOx emissions from new cars while Bharat Stage III standards will reduce emissions by about 38 per cent from Bharat Stage II levels

New Delhi, March 31, 2010: As Bharat Stage IV norms for fuels and vehicles come into force from April 1, 2010 in 13 cities of India, the automobile industry is trying its best to delay the implementation of Bharat Stage III norms for vehicles in the rest of India.

While the oil industry is phasing in the supply of Bharat Stage III fuels, the automobile industry wants deferment of the emissions standards for vehicles until the final date of phase-in of the fuel, which is October.

This is clearly not acceptable, says Centre for Science and Environment (CSE), as it will significantly delay the introduction of Bharat Stage III vehicles in the country, allow the industry to continue investing in outdated Bharat Stage II technology, create an enormous inventory of unsold Bharat Stage II vehicles that will continue to roll in the market much after the deadline, and add to the already severe pollution problem in our cities.

Says Anumita Roychowdhury, head of CSE’s air pollution team: “The government must make both the automobile industry and the oil companies follow the same phase-in schedule for Bharat Stage III fuels. Sixteen key states, except Karnataka, Bihar, Jharkhand and the north-eastern states, will have Bharat Stage III fuels by June and they must not be deprived of the benefits of improved vehicle technology and fuel quality.”

Over 2009-2010, the demand for petrol in the country has increased by 14 per cent. This indicates the rapid growth in numbers of personal vehicles and the urgent need, therefore, of emissions cuts. The Bharat Stage IV emissions standards will cut emissions by half from new vehicles, while Bharat Stage III standards are expected to reduce emissions by about 38 per cent from Bharat Stage II levels.

The availability of cleaner fuels will also reduce emissions from the large fleet of in-use vehicles that are already plying on the road. Most significantly, the sulphur content in Bharat Stage IV diesel and petrol will reduce to 50 ppm and in Bharat Stage III diesel and petrol to 350 ppm and 150 ppm, respectively. Sulphur in fuel contributes to the formation of particulate matter that has serious health consequences.

CSE, therefore, has urged the government not to give in to the industry’s pressure and implement the new standards with utmost urgency and stringency to be able to meet the pollution reduction objectives in cities. Simultaneously, the government must work towards the post-2010 roadmap for uniform introduction of Bharat Stage IV standards across the country and set the timeline for Euro V/VI emissions standards for both oil and automobile sectors, to enable them to plan in advance.

Phase-wise schedule for introduction of Bharat Stage III petrol and diesel from oil marketing company locations:

1. Goa: petrol 1 April, 2010; diesel 1 April, 2010

2. Chhattisgarh, Madhya Pradesh, Maharashtra: petrol 1 June, 2010; diesel 1 June, 2010

3. Haryana, Himachal Pradesh, Punjab, Rajasthan, Chandigarh, Uttaranchal, Western UP, Andaman & Nicobar, Orissa, Sikkim, West Bengal, Gujarat, UT of Dadar Nagar Haveli and Daman and Diu, Andhra Pradesh, Tamil Nadu, Puducherry: petrol 1 July, 2010, diesel 1 July, 2010

4. Jammu and Kashmir*: petrol 1 July, 2010; diesel 1 July, 2010

5. Karnataka: petrol 1 August, 2010; diesel 1 August, 2010

6. Eastern UP, Bihar and Jharkhand: petrol 1 October, 2010; diesel 1 July, 2010

7. Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Kerala, and UT Lakshadweep: petrol 1 October, 2010; diesel 1 October, 2010

Note: supplies of BS III petrol / diesel to location fed from Leh and Kargil in Jammu and Kashmir state, which are open only during May to September of the year, would commence from 1.10.2010, as replenishments to these areas can start only from mid May, 2010

Source: Submissions from oil industry

India holds talks with US, Kuwait, Mexico and Indonesia for Cooperation in oil sector during 12th IEF at Cancun
Indian delegation led by Shri Murli Deora, Minister of Petroleum and Natural Gas had a series of bilateral meetings with the delegations of different countries on the sidelines of the the 12th International Energy Forum (IEF) meeting at Cancun, Mexico late yesterday (India time). In a meeting with US Deputy Secretary of Energy Mr Daniel Poneman, US offered to continue its cooperation in the field of frontier area of gas hydrates for undertaking second expedition by India building on the success of the first expedition. Similarly US success in utilising Shale gas to significantly augment its natural gas production was seen as potential area where US experience could come Handy in identifying such resources in India. Indian side underlined the important role of US in stabilising oil prices. As both are oil import dependent countries, this would serve common intersests, mutuality of interests.

In its meeting with Kuwaiti delegation, Indian side emphasised on more crude oil supplies and criss-cross investments. Shri Murli Deora, Minister of Petroleum and Natural Gas informed his counterpart from Kuwait Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah, Minister of Oil Petroleum Secretary that India is raising its refining capacity significantly which would soon rise to about 250 million metric tonnes. He added that the India looks greater oil supplies. Suggesting mutual investments, India invited oil companies of Kuwait to invest in the up-coming petrochemical projects of ONGC and IOC at Mangalore and Paradip. Shri Deora extended an invitation to Mr Al-Sabah to visit India.

The third bilateral meeting was held with the delegation of host country led Ms (Dr) Georgina Kessel Martinez, Secretary of Energy of Mexico. Shri Deora offered keen desire of India oil companies for participation in the Mexican upstream sector and conveyed India´s growing need for crude oil with increase in refining capacity. Mexican side informed that their laws presently permitting are exploration and production on service contract basis, are under review. The incentive based system under-consideration would help attract more investment which Indian companies could also utilice. Indian side referred to the presence of Indian National Oil Companies in the, upstream sector of nearby countries of Brazil, Venezuela and Columbia

Shri Murli Deora, Minister of Petroleum and Natural Gas, in a bilateral meeting with his counterpart from Indonesia Mr Darwin Zahedy Saleh, Minister Energy and Mineral Resources, conveyed India´s interest in sourcing LNG from Indonesia. Indonesian side stated that the present LNG capacities are tied-up and informed that there could be a possiblity later for cooperation in this area. Responding to Indian interest in the Indonesian upstream sector, it was informed that Indonesia would soon come out with new biddings for exploration blocks. This would offer an opportunity for Indian oil companies to participate.

Shri Deora is accompanied by Petroleum Secretary Shri S. Sundareshan, CMDs of ONGC and IOC, and MD ONGC Videsh. The Minister is also addressing Session- I of the Ministerial Meet on the Inaugural day of 12th IEF.


Eurofer notifies Commission on possible anti-Competitive

Practices and Abuse of Dominant Position related
to the Seaborne Iron Ore Market


Today Eurofer formally notified the European Commission about possible anti-competitive practices and abuse of dominant position by the main iron ore suppliers.


Strong indications of illicit coordination of prices increases and pricing models and pressure on individual steel producers to accept these changes indicate in Eurofer’s view that the EU competition rules, notably art. 101 and art. 102 may have been breached.


“As stated by Eurofer already the prices increases of 80-100% demanded by iron ore producers do not reflect the realities of the steel market and cannot be justified by demand conditions for iron ore” says Gordon Moffat, Director General of Eurofer.” That is why we are calling upon the Commission, as regulator, to examine closely what is happening among iron ore suppliers”.


Eurofer has already indicated to the European Commission its concern at the very high level of concentration on the seaborne iron ore market which is dominated by just 3 producers (BHPB, Rio Tinto and Vale) and the unacceptability therefore of the proposed joint venture between BHPB and Rio Tinto.



EUROFER – the European Confederation of Iron and Steel Industries – represents the interests of 60 steel companies and national steel federations from 23 EU Member States which are combining almost 100% of EU steel production.

BHP Billiton Enters Into a Joint Venture For Its Indonesian Coal Project (Maruwai)

BHP Billiton has today announced it has entered into binding agreements to create a new joint venture for its Indonesian Coal Project (ICP) with a subsidiary of PT Adaro Energy TBK (Adaro), which has agreed to acquire a 25 per cent interest in the ICP joint venture. BHP Billiton holds the remaining 75 per cent.

The ICP covers seven Coal Contracts of Work (CCoWs) located in East and Central Kalimantan in Indonesia. Undeveloped metallurgical and thermal Coal Resources are estimated at 774 million tonnes. Adaro is Indonesia’s second largest thermal coal producer and has operations near the ICP.

BHP Billiton President Metallurgical Coal, Hubie van Dalsen, said, “These agreements with Adaro provide a strong local partner to ensure the successful development of our world class metallurgical coal interests in Indonesia. As we progress development, we will continue our strong commitment to the protection of the region’s outstanding biodiversity.”

Completion of the transaction is subject to approvals from the Indonesian Government.

Please refer to the attached Coal Resource statement.

Rio Tinto announces satisfaction of Conditions Precedent to the Investment Agreement with the Government of Mongolia for the development of Oyu Tolgoi


Rio Tinto confirmed today the satisfaction of the conditions precedent to the Investment Agreement with the Government of Mongolia for the development of the Oyu Tolgoi copper-gold complex in Mongolia’s South Gobi region. The Investment Agreement has now taken full and binding effect.

Under the terms of the Investment Agreement and associated Shareholders’ Agreement, the Government of Mongolia will own 34 per cent of OT LLC, the license holder of the Oyu Tolgoi project. Key terms include a stable operational and tax environment, provisions dealing with the Government’s equity participation and financing arrangements.

Rio Tinto and Ivanhoe Mines Ltd, the development partners for the project, will now move forward with the Government of Mongolia to commence the development phase of the project. Production is expected to commence in 2013, with a five year ramp up to full expected production of 450,000 tonnes of copper per year with significant gold by-products. While projections remain to be confirmed in an updated development plan, Ivanhoe estimates total investment over the next four years to build and commission the initial mining complex will be approximately US$4 billion (100% basis). Building a coal-powered electricity generating plant for Oyu Tolgoi would require an additional capital commitment.

Andrew Harding, chief executive, Copper, Rio Tinto said “The completion of the Investment Agreement with the Government of Mongolia underlines a key milestone for the Oyu Tolgoi deposit. We plan to be a partner in Mongolia for decades to come and are looking forward to moving into the development phase of the project.”
Rio Tinto currently owns 98.6 million shares of Ivanhoe Mines representing 22.4 per cent of Ivanhoe Mines. Pursuant to certain existing contractual arrangements between Rio Tinto and Ivanhoe Mines, Rio Tinto has the right at any time to exercise its share purchase warrants and/or convert its convertible loan into shares of Ivanhoe Mines. Rio Tinto also has, among other things, the right to acquire additional securities so as to maintain its proportional equity interest in Ivanhoe Mines, and the right to acquire additional Ivanhoe Mines securities in certain other circumstances and subject to certain limits. 

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Railway Revenue earnings up by 8.71 per cent during the period 11th – 20th March 2010
The total approximate earnings of Indian Railways on originating basis during the period 11th March – 20th March 2010 were Rs. 2638.69 crore compared to Rs. 2427.24 crore during the same period last year, registering an increase of 8.71 per cent.

The total goods earnings have gone up from Rs. 1650.74 crore during 11th March – 20th March 2009 to Rs. 1775.73 crore during 11th March – 20th March 2010, showing an increase of 7.57 per cent. The total passenger revenue earnings during the period 11th to 20th March 2010 were Rs. 766.34 crore compared to Rs. 670.58 crore during the same period last year, reflecting an increase of 14.28 per cent. The revenue earnings from other coaching amounted to Rs. 64.85 crore during this period compared to Rs. 57.89 crore during the same period last year, showing an increase of 12.02 per cent.

The total approximate number of passengers booked during the period 11th to 20th March 2010 were 208.04 million compared to 203.99 million during the same period last year, showing an increase of 1.99 per cent. In the suburban and non-suburban sectors, the number of passengers booked during 11–20 March 2010 were 108.83 million and 99.21 million compared to 112.21 million and 91.78 million during the same period last year, registering a decrease of 3.01 per cent and an increase of 8.10 per cent respectively.
Teaching India's Poorest, and Herself
(Profile of a delegate to the Presidential Summit on Entrepreneurship)  
By Andrzej Zwaniecki
Staff Writer
Washington - A Mumbai slum was an exotic place to 18-year-old Shaheen Mistri when she walked into it in 1989 as part of a college project. Born into an upper-middle-class Indian family, she spent most of her early youth overseas studying at private schools and colleges. She was not naïve: she knew about inequalities in India's education system. But what she saw - bright kids full of potential living in terrible squalor - shocked her.
Within a few days, she found a small space in a private home in a shantytown and began teaching a small group of children of different ages. She didn't speak the same language, but it was the least of the obstacles she faced. There was no money for pens. Children were not interested. Parents didn't trust her. And potential sponsors couldn't understand why she wanted to bring these poor children into private schools. But Mistri couldn't be deterred from teaching. She was able to move into her first real classroom when the Catholic Holy Name School gave her space, after 20 others had rejected her pleas to host her group.
"If you have a lot of drive and determination, nothing seems formidable or challenging," Mistri said. But, she added, even after she had a classroom, she had no idea what might come of her effort to teach kids from the slum.
What has become of it is the Akanksha Foundation , a nonprofit education project that provides after-school tutoring to disadvantaged children at more than 60 centers and formal education at six schools. The centers and schools are in Mumbai and Pune. Volunteers, mostly college students, teach close to 5,000 children using an innovative methodology, which won the foundation international honors. Akanksha means "aspiration" in Hindi. Fittingly, Akanksha alumni go to colleges or vocational schools. Some stay with the organization as teaching fellows. One, Sumeet, has become an MTV India celebrity.
As the recognition of Akanksha and Mistri herself grew and success stories piled on, she had a nagging sense of disparity between the magnitude of problems that plague India's education system and the contribution her organization could make to solve them. But she saw an opportunity to expand her reach and work for more transformative changes when she met Wendy Kopp, the founder of Teach for America . The U.S. program recruits and trains outstanding recent college graduates, who commit to teach for two years in U.S. public schools.
The challenge of transplanting the concept to a system as complex and diverse as India's (eight languages are accepted for school instruction) is tremendous. But Mistri and her associates working for educational reform forged ahead unfazed. They launched Teach for India  in 2007, after which the organization recruited around 240 teaching fellows and wooed Goldman Sachs and Citigroup and major Indian corporations as sponsors. Mistri hopes the nonprofit will grow into a national movement, which eventually will bring about educational reform.
"When I started it was basically an attempt to learn about myself," she reflected. Today, she is a successful advocate for better education. She has learned much, she says, over the past 20 years, particularly about children's emotional generosity, perseverance and courage.

Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of his Visit to Romania

March 30, 2010

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Bucharest at the conclusion of his visit to Romania:

“It was a great pleasure for me to visit Romania and have the opportunity to discuss the country’s economic progress with a broad range of people here–from government leaders to parliamentarians to academics and students. The IMF has long been a friend and partner of Romania, including during the recent financial crisis when we offered significant financial support. We look forward to our continued collaboration in the future.

“I met today with President Traian Basescu, Prime Minister Emil Boc, Minister of Public Finance Sebastian Vladescu, and Central Bank Governor Mugur Isarescu. We had substantive discussions about recent economic developments and Romania’s economic performance under the Stand-By Arrangement with the IMF. We agreed that full implementation of the economic program will be essential to ensuring long-term growth, increasing employment, and rising living standards.

“In the wake of the crisis, Romania has faced a difficult set of policy challenges. With growth projected to turn positive again this year, it is essential that the bold adjustment program that has been undertaken should be maintained. A major challenge in particular will be to continue reforming the public sector, including state-owned enterprises, to become more efficient.

“During my visit, I welcomed the opportunity to address Parliament and appreciated the discussion with parliamentary leaders beforehand. I also enjoyed the discussion with students at the Academy of Economic Studies and commend them for their probing questions and keen interest in global economic affairs and development.

“I wish to thank the city of Bucharest and the Romanian people for their warm hospitality.”


TSI Iron Ore Index best reflects average spot price

London, UK. 30 March 2010

The Steel Index (TSI) daily iron ore reference price for 62% Fe content fines has proved to be the most accurate reflection of the average daily iron ore spot market price.
 “This is no surprise,” says Steven Randall, Managing Director of TSI. “Our daily reference prices are based on actual transactions completed, with the data submitted to us by participants throughout the supply chain. TSI’s reference prices are calculated as the volume-weighted average of prices submitted by miners, traders and steel mills. We don’t focus on the latest price or bids and offers discussed in the market each day, as some other indices do. This can be misleading.”

He adds, “TSI’s approach ensures our reference prices represent the entire market picture, giving steel mills, traders and miners the confidence they need when moving to index-based pricing arrangements, whether quarterly or monthly.”

Analysis of the three leading iron ore price indices has demonstrated that TSI’s reference price is closest to the average. Over the past 6 months, the average daily deviation of TSI’s reference price from the average of the three indices has been only 0.7%, while the other indices have shown average deviations of 1.0% and 1.1% respectively.

Today’s TSI iron ore reference price for 62% Fe content fines reached a new 12-month high of $153.6 per dry metric tonne CFR Tianjin port in China.
TSI’s average reference price for March will be published on the last day of the month tomorrow. This is the figure used by many industry participants in their physical index-linked price arrangements and also exclusively by the Singapore Exchange (SGX) and LCH.Clearnet in London for settlement of their respective cleared iron ore swap contracts.

Similarly TSI’s average price for January-March 2010 will also be published tomorrow, which will be of great interest to companies moving onto quarterly index-based price arrangements. The miners BHP-Billiton, Rio Tinto and Vale have expressed their intention to use index-linked pricing for a substantial portion of their business this year.  TSI’s average price for Q1-to-date is $131.24 per dry metric tonne.

Modest Recovery in Store for Germany

IMF Survey online

March 30, 2010

  • Moderate recovery expected, with growth of 1.2 percent of GDP in 2010
  • More restructuring needed in banking sector
  • Labor, service sector reforms could unleash growth potential, boost domestic demand

The IMF is forecasting growth in Europe’s largest economy of 1.2 percent of GDP this year, followed by 1.7 percent in 2011.

Reflecting Germany’s role as the world’s second largest exporter, the pickup in global trade is the main factor behind the recovery, although fiscal stimulus continues to provide support to the economy.

In this interview, the IMF’s mission chief for Germany Juha Kähkönen and Deputy Division Chief Helge Berger discuss risks to the recovery, why few jobs were lost in Germany during the crisis, and whether Germany needs to recalibrate its growth model.

IMF Survey online: What are the IMF’s expectations for a German recovery?

Kähkönen: The recovery in Germany is well underway, but we think it will be moderate and fragile. Last year, GDP dropped by 5 percent. For this year, we project a growth of 1.2 percent. Our expectations for 2011 are slightly higher, at 1.7 percent.

The recovery is supported by several factors, but the pickup in global trade is probably the most important factor. As you know, Germany’s economy is open and very export-oriented. The pull from Asia and, to a lesser extent, the United States has a direct and positive impact on the economy.

But policy support also matters. Fiscal policy in particular has supported demand. The government allowed automatic stabilizers to work in full and also implemented other stimulus measures, including a very popular car scrapping program last year. A short-term work program known as Kurzarbeit also helped limit the depth of the recession and will continue to provide substantial support for the economy in 2010.

IMF Survey online: What are the main risks to the outlook?

Kähkönen: There is a chance that the upswing will be stronger than currently foreseen, but the risks are predominantly on the downside. We see two main risks.

First, the demand for exports could be lower than expected. If growth in Germany’s partner countries, especially within Europe and, in particular, Southern Europe, were to fall short of expectations, this will be felt directly in Germany.

Second, we cannot exclude the possibility of a credit crunch. If there are further loan losses in the financial sector, this could constrain the lending capacity of banks, which in turn will impact growth.

IMF Survey online: In light of these risks, is Germany’s fiscal policy adequate?

Kähkönen: The government’s fiscal strategy, in our view, strikes the right balance between supporting the economy in the short term and planning to consolidate government finances once the recovery has taken hold.

The fiscal stimulus in Germany this year is among the largest in the Group of Seven economies (G-7). We think this is appropriate, given how fragile the recovery is. If the recovery turns out to be weaker or takes longer to materialize than we currently expect, the government might want to consider additional fiscal support.

But once private sector demand has become self-sustaining, as we project will happen in 2011, fiscal support should be withdrawn and consolidation started. Like other members of the European Union, the government must live to the requirements of the European Stability and Growth Pact, which stipulates that the general government deficit should be reduced to 3 percent of GDP―in Germany’s case, by 2013. On top of that, a new constitutional rule requires the structural federal government deficit be near zero by 2016. The government is firmly committed to meeting these targets.

We strongly support the medium-term commitment to sustainability—not only because it will be important for meeting the fiscal rules and preparing for the fiscal challenges of Germany’s aging population, but also because it is crucial for anchoring fiscal consolidation in the whole euro area. As has happened in the past, Germany’s fiscal actions could set an example for the rest of Europe.

To achieve these medium-term goals, the government needs to put in place concrete measures, starting in 2011. In our view, such measures should focus on reducing expenditure―international experience shows that consolidating expenditure is most effective when it comes to achieving a lasting reduction in government deficits. But revenue measures might also be needed. If that’s the case, we would propose broadening the value-added tax and income tax base, rather than simply increasing tax rates.

IMF Survey online: The labor market has held up remarkably well in Germany compared to other advanced economies. How much of that can be ascribed to the Kurzarbeit program?

Berger: Unemployment figures barely moved during the recession, which is quite remarkable. Some observers even talk of an employment miracle. Things can change, though. And while employment has held steadily, hourly work numbers have decreased quite substantially.

What we see is to a large extent the impact of past labor market reforms, which made labor markets more flexible. Today, collective bargaining agreements often include clauses that allow companies to adjust the amount of time worked, something which was used quite extensively during the recession.

But the Kurzarbeit program―essentially a government subsidy for short-time work―also played a very important role. At its peak, the program supported work time reductions for 1.5 million employees, a figure that amounts to about 3.5 percent of the total labor force. This is really quite an astonishing number.

The scheme is effective because it encouraged burden sharing between employers and employees and prevented unemployment. Research shows that prolonged unemployment does lasting damage to peoples’ skills sets. Thus, keeping people in the work force rather than laying them off is a major benefit of this program.

As we enter the recovery, the program should be adjusted so it does not hold back change in the labor market. The Kurzarbeit program was and is particularly popular in the export sector, which is still under considerable pressure. We don’t think that export growth will return to its pre-crisis exuberance and so more jobs will need to be created elsewhere in the economy, for instance in the service sector.

IMF Survey online: There are still lingering problems in the banking sector. What steps does the government need to take, both in terms of resolving left-over problems from the crisis, and in terms of laying the foundation for stronger banks in the future?

Berger: It’s fair to say that the German banking sector on the whole is healthier than it was during the early phase of the crisis. The improvement is due to the brighter economic outlook, substantial policy efforts, and government-backed restructuring.

But serious weaknesses remain, particularly in the larger public banks known as Landesbanken. These banks accumulated substantial losses during the crisis. Their problems come down to the fact that they lack a viable business model. Most of the banks are structurally unprofitable and tend to be excessive risk-takers, something which became clear during the crisis, when they were a drain on the public finances and a source of financial instability.

Some of the Landesbanken are already being restructured, but there is a strong need for more fundamental consolidation in the sector. The surviving banks should have effective governance, something most of them lack today. They should be privatized, with viable business models that are able to face the test of markets.

On a broader level, the government has taken a number of initiatives to improve the financial stability framework, based on lessons learned during the crisis.

First, the government is planning to consolidate all prudential banking supervision into Germany’s national central bank, the Bundesbank. This will help eliminate coordination and accountability issues under the current setup where these responsibilities are split between the Bundesbank and BAFin, the national financial sector supervisor. This will improve information flows, which is crucial, especially in a crisis environment, and decision making, which should become swifter and more efficient.

Second, we think there is scope to maximize efficiency gains if the Bundesbank’s prudential mandate is widened further to include the insurance sector. Traditionally, insurance and banking services are highly integrated markets in Germany, and regulation and oversight from a single source would clearly make sense.

Third, the government is planning to introduce a permanent resolution regime for systemically important banks. Temporary mechanisms were put in place during the crisis but a more permanent solution needs to be found. We think it might also make sense to extend the new permanent framework to include non-systemic banks. Whether a bank can have an impact on the entire financial system or not can change at a minute’s notice during a crisis, so including all banks would be helpful.

Finally, we would like to see more progress in the area of deposit insurance. Deposit insurance is highly fragmented in Germany, where different parts of the banking sector run their own schemes. This approach showed its weaknesses during the crisis. As an example, commercial banks, which also run their own deposit insurance scheme, needed government guaranties of 6.7 billion euros to cover losses during the crisis. For these reasons, a more unified fund for deposit insurance spanning the entire banking system would be a great improvement.

IMF Survey online: There is a lot of debate right now about the need for new growth models, in Europe and elsewhere. Germany has been criticized for relying too much on export-driven growth. What are your views?

Berger: There’s certainly a need to strengthen Germany’s growth potential and to repair the damage from the crisis to potential growth. But this is easier said than done. There are important reservoirs of growth in Germany’s labor and services markets. Employment protection is still fairly high in the country and the service sector clearly holds a large untapped growth potential. Simultaneous reforms in both areas promise sizable growth and employment gains in the medium term.

Reforms in these areas would not only unleash domestic growth potential in Germany, they would also reduce the country’s reliance on exports―a double growth dividend. On top of that, such reforms would also help reduce trade imbalances within Europe and globally.

What will not work is an attempt to achieve a rebalancing of growth by weakening Germany’s competitiveness―for example, through excessive wage growth. Such a strategy would only serve to hurt domestic German growth and would damage Europe’s competitiveness as well.

IMF Survey online: So in a nutshell, what are the IMF’s main recommendations for Germany?

Kähkönen: The main challenge for the government is to protect and nurture the fragile recovery while getting ready to roll back the support measures that were put in place during the crisis. This will require policy action in three main areas. First, we recommend short-term fiscal support combined with fiscal consolidation as soon as the recovery has taken hold. Second, the government should finalize the restructuring of the Landesbanken and lay the groundwork for a healthy and crisis-safe financial sector. And, finally, further reforms of the labor markets and the service sector would allow the economy to adjust to the post-crisis world and would promote greater domestic demand.

Coal India signs MOU with Government

The Ministry of Coal signed a Memorandum of Understanding (MoU) with Coal India Limited (CIL), the Navratna coal mining PSU for its key performance areas for the fiscal 2010-11. Shri C Balakrishnan, Secretary to Government of India, Ministry of Coal and Shri Partha S Bhattacharyya, Chariman CIL signed the document to this effect here today.
As per the MoU for the fiscal 2010-11, CIL’s targeted production and coal off-take have been pegged at 461.5 Million Tonnes (MTs) and 462.5 MTs respectively for attaining an ‘Excellent’ rating. Incidentally for previous two fiscal I.e 2007-08 & 2008-09 CIL was rated ‘Excellent’.
The MoU for 2010-11 puts special emphasis on Research & Development and Corporate Social Responsibility(CSR) which have been identified as major thrust areas. To attain the targeted off-take, CIL sought 185 rakes/day for 2010-11 as against the average availability of 155 rakes/day during previous and current fiscals.
The R&D activities will see a quantum jump from the present Rs. 15 core earmarked annually for the purpose to twice that amount, Rs.30 core. In a proactive measure CIL has stepped up its budget on CSR activities to 5% of the retained earnings of previous year, subject to minimum of Rs. 5/- per tonne of coal production of previous year whichever is higher. Earlier, Rs. 1/- per tonne of coal produced was earmarked for CSR activities.
The component of performance obligation mainly consists of Financial & Non Financial parameters which carry equal weight of 50% each. The key parameters are gross margin, gross sales, financial ratios, quality of coal, coal production, off-take & productivity, customer satisfaction, HRD (training policy etc), safety (fatality /MT) and environmental managements etc.
The MoU formulated on the guidelines laid down by Department of Public Enterprises is a negotiated agreement and contract between Government and the Management of Central Public Sector Enterprise (CPSE) to evaluate the performance of the CPSE at the end of the year vis-s-vis the tagets fixed in the beginning of the year.
Sriprakash Jaiswal discuss bilateral cooperation with American delegation

A delegation led by American Senator Christopher Bond called on the Minister of State for Coal and Statistics & Programme Implementation, Shri Sriprakash Jaiswal here today.
Issues relating to energy security were discussed in the meeting. It was pointed out during the discussions that the demand for coal in India is growing at a faster pace due to acceleration in the rate of addition to power generation and, therefore, the Ministry of Coal and Coal India Ltd. Were looking for acquisitions of coal assets abroad to supplement coal availability. It was further mentioned that Coal India Ltd. Had issued a global Expression of Interest for strategic partnerships through formation of joint ventures for opening Greenfield projects and equity infusion with relatively long-term off-take agreements.
Both the Minister and the Senator expressed the need for strengthening cooperation in the areas of clean coal technologies as well as underground coal gasification. It was also mentioned that a global study bringing out the benefits of coal in various countries of the world has been initiated by American coal companies and that the Indian Coal companies would be supporting this study. The Minister concluded by stating that the Indian side fully supports these initiatives.

First industrial-scale plant contract for climate-friendly chlorine production using Bayer MaterialScience's innovative ODC technology

Lower emissions due to oxygen-depolarised cathode technology

On March 10, 2010, Uhde and Bayer MaterialScience AG of Leverkusen signed a contract for the construction of a new 20,000 tonne-per-year chlorine plant at the Krefeld-Uerdingen chemical park. The plant is due to be commissioned in the first half of 2011. It will be the first time that Bayer MaterialScience's oxygen-depolarised cathodes (ODCs) are to be used in the electrolysis cells developed by UHDENORA/Uhde to produce chlorine on an industrial scale - thus cutting the energy required to produce chlorine by up to 30 percent compared with standard membrane technology and indirectly reducing annual CO2 emissions by up to 10,000 tonnes.

The project between the two companies, which was initiated in close cooperation with the RWTH University of Aachen, the Technical University of Clausthal and the University of Dortmund, is funded by the Federal German Ministry for Education and Research (BMBF) under the "Research for Sustainability" programme, otherwise known by the German acronym FONA. FONA supports initiatives for improved energy efficiency and higher resource productivity. The projects funded actively contribute to counteracting the effects of climate change.

Within the framework of the "Qualification of NaCl ODC technology for industrial chlorine production" project, Bayer MaterialScience and Uhde are for the first time implementing the industrial-scale use of ODC technology for the production of chlorine on a sodium chloride (NaCl) basis. This innovative, sustainable and environment-friendly technology combines UHDENORA's know-how in cell technology with the expertise of Bayer MaterialScience regarding the oxygen-depolarised cathode.

As a global leader in the production of electrolysis cells and a supplier of chlorine plants, Uhde is already an established partner for Bayer MaterialScience.
Bayer MaterialScience has committed to sustainability and therefore firmly focuses on efficient process technologies.

"Our oxygen-depolarised cathode is further proof of how we systematically develop new solutions to tackle climate change. At the same time, we feel a holistic approach is essential - so we also offer other companies our ODC technology for the environment-friendly production of chlorine. From a global perspective, the more CO2 emissions we can cut, the better," explains Dr. Tony Van Osselaer, Member of the Management Board of Bayer MaterialScience.

"We are proud of our long partnership with Bayer MaterialScience. As a technology company we are always looking for solutions that are of economic and ecological benefit to our customers. The NaCl ODC technology holds the potential for such a solution," says Dr Sami Pelkonen, Head of Uhde's electrolysis division.

The electrochemical production of chlorine is now one of the most energy-intensive processes in the chemical industry. Large quantities of chlorine are required in particular for the production of plastics, but also for the production of pharmaceuticals. At present, chlorine is mainly produced via so-called membrane processes. The new technology cuts the power consumption of electrolysis plants through feeding in gaseous oxygen. This also reduces CO2 emissions.

Uhde has a workforce of more than 4,500 employees worldwide and is a company in the Plant Technology business area of the ThyssenKrupp Group. The company's activities focus on the engineering and construction of chemical and other industrial plants in the following fields: fertilisers; electrolysis; gas technologies; oil, coal and residue gasification; refining technologies; organic intermediates, polymers and synthetic fibres; and also coke plant and high-pressure technologies. We also provide our customers with professional services and comprehensive solutions in all areas of industrial plant operation. Details are available at

UHDENORA S.p.A. is a joint company of Uhde/Germany and Industrie De Nora/Italy, and has a workforce of 70 employees worldwide. The company's activities focus on the design and construction of chemical and other industrial plants mainly in the following fields: chlor-alkali electrolysis, hydrochloric acid electrolysis and bleaching chemicals. Details are available at

With 2009 sales of EUR 7.5 billion, Bayer MaterialScience is among the world's largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. At the end of 2009, Bayer MaterialScience had 30 production sites and employed approximately 14,300 people around the globe. Bayer MaterialScience is a Bayer Group company. Details are available at

Sonata becomes SAP Gold Partner in India

The achievement highlights Sonata’s expertise and competencies in delivering end-to-end SAP solutions and services to customers across industry verticals

Mumbai, March 30, 2010 - Sonata Information Technology Limited (SITL), a 100% subsidiary of Sonata Software Limited, today announced that it has attained the Gold-level status, the highest level of recognition in the award winning SAP® PartnerEdge™ program. 

The SAP® PartnerEdge™ program is an award-winning three-level program that recognizes and rewards partners for their expertise and commitment to delivering SAP solutions to customers in the small and midsize enterprise(SME) marketplace. Through this program, SAP recognizes and rewards partners of all sizes for generating volumes of business as well as capacity-building activities such as sales training, solution development and customer reference activity. 

“Sonata has achieved Gold level status in the SAP® PartnerEdge™ program, which recognizes and rewards SAP partners for their proven track record in SAP certification. This SAP initiative is a significant investment and represents our continued focus towards expanding the partner ecosystem in the Indian marketplace, “said Deb Deep Sengupta, VP, SME and Channels, SAP India. “SAP looks forward to an even stronger relationship with Sonata going forward, with the common goal to provide exceptional service to our customers as priority."

“This elevated status acknowledges our extensive industry expertise and capabilities in deploying fast, efficient and stable SAP solutions for enterprises in India,” said Mr. Sujit Mohanty, Head - Sonata Information Technology Limited. “SAP signed Sonata as a partner in October 2008 and we have been able to earn our way up to the Gold level in just one and half years. This achievement further establishes Sonata as an implementation partner with skills and experience to assist customers with all aspects of their implementation of SAP solutions. We believe our innovative approach to SAP solutions enable us to meet our customers’ needs, ensuring that all their requirements are fulfilled to the highest standard.” 

“Looking ahead, we are optimistic we will be a partner of choice for progressive organizations which plan to implement or support their existing SAP installations, meet the needs of the expanding SME market and grow regardless of the market challenges,” Mr. Mohanty furtheradded. 

Sonata offers end-to-end solutions on SAP Business All-in-One and SAP Business Suite to address the growing business needs of the customers. Sonata’s SAP services and solutions can help midsize companies in India execute and optimize their business and IT strategies, and run their business efficiently and competitively. Sonata is helping enterprises maximize their SAP investments through a combination of SAP experts, methodologies, and tools, plus a comprehensive portfolio of service offerings designed to help them plan, build, and run the best SAP solution for their company’s needs. 

Sonata has recently come up with an SAP Business All-In-One partner solution for the Manufacturing sub-vertical. Addressing the needs of small and midsize businesses in the Industrial Machinery and Components (IM&C) industry, SonnetIM&C is a pre-packaged solution for SAP Business All-in-One, complete with industry content, best practices and Sonata's SAP accelerator. The specialized industry-specific solution will help manufacturers accelerate implementation, optimize costs and improve productivity. 

About Sonata Information Technology Limited

Sonata Information Technology Limited (SITL), a 100% subsidiary of Sonata Software Limited, provides software and services to enterprises across multiple industries in India. Sonata Software, headquartered in Bangalore, India, is a leading IT consulting and services company. Sonata's customers are located across the US, Europe, Middle East and the Asia-Pacific region. Its portfolio of services includes IT Consulting, Product Engineering Services, Travel Solutions, Application Development, Application Management, Managed Testing, Business Intelligence, Infrastructure Management and Packaged Applications. As per the industry rankings released by NASSCOM for 2008-09, Sonata Software figured among the Top 20 IT Software Services Exporters in India for the second consecutive year. Sonata Software has also been ranked Global #2 in the 2008 Top Ten ESO: Outsourced Software Development in The Black Book of Outsourcing.
Note on U.S.-India Civil Nuclear Cooperation


Office of the Spokesman
March 29, 2010
U.S.-India Civil Nuclear Cooperation - Reprocessing Arrangement
The United States and India have taken an important step toward implementing civil nuclear cooperation by completing negotiations on "arrangements and procedures" for reprocessing U.S.-origin spent nuclear fuel. These arrangements, negotiated pursuant to Article 6(iii) of the historic Agreement for Cooperation between the Government of India and the Government of the United States of America concerning Peaceful Uses of Nuclear Energy, will enable Indian reprocessing of U.S.-obligated nuclear material under IAEA safeguards. Completion of these arrangements will facilitate participation by U.S. firms in India's rapidly expanding civil nuclear energy sector.
Weekly Raw Steel Production - March 27, 2010

In the week ending March 27, 2010, domestic raw steel production was 1,734,000 net tons while the capability utilization rate was 71.7 percent. Production was 983,000 tons in the week ending March 27, 2009, while the capability utilization then was 41.1 percent. The current week production represents a 76.4 percent increase from the same period in the previous year. Production for the week ending March 27, 2010 is up 0.8 percent from the previous week ending March 20, 2010 when production was 1,720,000 tons and the rate of capability utilization was 71.1 percent.

Adjusted year-to-date production through March 27, 2010 was 20,121,000 tons, at a capability utilization rate of 67.7 percent. That is a 60.4 percent increase from the 12,548,000 tons during the same period last year, when the capability utilization rate was 42.9 percent.

Broken down by districts, here's production for the week ending March 27, 2010 in thousands of net tons: Northeast Coast: 143; Pittsburgh/Youngstown: 115; Lake Erie: 45; Detroit: 113; Indiana/Chicago: 482; Midwest: 233; Southern: 535 and Western: 68.

(Estimate based on reports from companies representing about 50% of the Industry's Raw Steel Capability + includes revisions for previous months)

Obama Makes Surprise Visit to Afghanistan to Honor Troops

By Stephen Kaufman
Staff Writer

Washington - President Obama made his first trip to Afghanistan as commander in chief March 28, using his surprise visit to honor U.S., Afghan and international troops and to meet with Afghan President Hamid Karzai to discuss anti-corruption efforts, energy and agricultural production and other civilian issues.

"I know this was on a little bit of short notice," Obama told troops from the International Security Assistance Force for Afghanistan (ISAF) and the Afghan National Army in remarks at Bagram Airfield March 28. To the American forces the president said, "I want you to understand, there's no visit that I considered more important than this visit I'm making right now because I have no greater honor than serving as your commander in chief."

Afghan and coalition forces are working together to "disrupt and dismantle, defeat and destroy al-Qaida and its extremist allies" like the Taliban, he said, with the objectives of denying al-Qaida safe haven in the country and reversing the Taliban's momentum.

"If this region slides backwards, if the Taliban retakes this country and al-Qaida can operate with impunity, then more American lives will be at stake. The Afghan people will lose their chance at progress and prosperity. And the world will be significantly less secure," Obama said.

"We're going to strengthen the capacity of Afghan security forces and the Afghan government so that they can begin taking responsibility and gain confidence of the Afghan people," he said.

The president told the troops that he understood their sacrifices and the ordeal of time spent away from loved ones. "If I thought for a minute that America's vital interests were not served, were not at stake here in Afghanistan, I would order all of you home right away," he said.

Saluting members of the Afghan National Army, Obama praised their willingness to protect their country and their increasing ability to take responsibility for Afghanistan's security. He also thanked ISAF soldiers from other countries, saying al-Qaida and its extremist allies threaten people around the world.

"We're so proud to have our coalition partners here with us," he said. "Thank you very much for the great work that you do. We salute you and we honor you for all the sacrifices you make, and you are a true friend of the United States of America."

This is a fight that matters, the president said. "Al-Qaida and the violent extremists who you're fighting against want to destroy. But all of you want to build," he said, and see "dignity in every human being."

Extremists "want to drive races and regions and religions apart. You want to bring people together and see the world move forward together," Obama said. "They offer fear, in other words, and you offer hope."

Before meeting with military personnel, the president held talks with President Karzai in Kabul. After their talks, Obama said , "I want to send a strong message that the partnership between the United States and Afghanistan is going to continue."

"All of us are interested in a day when Afghanistan is going to be able to provide for its own security but continue a long-term strategic partnership with the United States," Obama said.

Along with more progress on joint military activities, the president said he wanted to see continued improvement in civilian areas such as "agricultural production, energy production, good governance, rule of law, anti-corruption efforts." That will increase Afghanistan's prosperity, security and independence, he said.

White House press secretary Robert Gibbs told reporters traveling with the president March 28 that Obama invited Karzai for further talks in Washington May 12.

A senior administration official who asked not to be identified said Obama and Karzai discussed Afghan governance issues during their meeting, including the need for merit-based appointments of Afghan officials and efforts against corruption.

Since Obama and Karzai last spoke by videoconference March 15, the official said, the United States has seen improvements in local governance and the creation of more credible national institutions, as well as action against corruption.

National Security Advisor General Jim Jones told reporters that President Karzai "needs to be seized with how important" the problem of corruption is in Afghanistan.
All About Visas for Indian Students to Study in the United States
(Live webchat March 30 with the U.S. Consulate in Chennai, India) (212)
The U.S. Consulate General in Chennai, India, is pleased to host a live webchat on student visas on Tuesday, March 30, from 3 p.m. to 4 p.m. IST (5:30 a.m. EDT, 09:30 GMT). The chat will give students interested in studying in the United States, as well as their parents, an opportunity to ask questions about the student visa process.
A vice consul at the consulate will answer your questions about the procedures, necessary documents and interview that are required to obtain a student visa.
Log in and get answers to questions like these: What is the first step to obtaining a student visa? What does the consular officer want to know? What documents do I need to bring to the interview?
If you would like to participate in this webchat, please go to No registration is needed. Simply choose "Enter as a Guest," type in your preferred screen name, and join the discussion. We accept questions and comments in advance of, and at any time during, the program.
The transcript of this webchat will be available on's webchat page ( ), where information about upcoming webchats is also available

Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of his Visit to Poland


Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Warsaw at the conclusion of his visit to Poland:

“It was a great pleasure for me to spend the last two days in Warsaw and to meet with a wide range of the Polish people: from government leaders and officials to academics and students. The IMF has been Poland’s friend and partner since the first stabilization program in 1989 and, more recently, the IMF has helped with Poland’s response to the financial crisis through our Flexible Credit Line. We look forward to our continued collaboration in the future.

“I met today with Prime Minister Donald Tusk, Finance Minister Jacek Rostowski, and National Bank President Slawomir Skrzypek, and we had the opportunity to discuss recent economic developments in Poland. The Polish economy weathered the crisis well primarily because the authorities implemented the appropriate policies. Indeed, Poland was the only economy in the European Union to register positive economic growth in 2009. I commended the government and people of Poland on this achievement. While many difficult economic challenges remain – most notably the need to reduce unemployment levels – Poland’s outlook is favorable as the global environment improves. We expect growth to increase to around 2 ¾ percent his year and 3 ¼ percent in 2011.

“During my discussion at the Warsaw School at Economics, I was greatly impressed with the students’ interest and engagement in regional and global issues, and I enjoyed the exchange of views about social and economic developments. The debate with high-level participants during the panel discussion at the Royal Castle was also very constructive and proved once again how important and beneficial the advancement of the region is to Europe and the world.

“I would like to thank the authorities and the Polish people for their warm hospitality and especially the Chopin museum for allowing us to attend an exquisite performance.”

Mechel Announces Receiving Certificate to Mark Mechel CampiaTurzii Plant’s Products with CE Marking

Romania, Campia Turzii – March 29, 2010.- Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces annual product certification procedure having completed at its Mechel Campia Turzii plant, which is a part of its East-European Steel Division. The audit inspection results confirmed the plant’s procedures compliance to the EU requirements. The plant’s right to mark its products with CE marking has also been confirmed.

At the end of February 2010 audit inspection was carried out at Mechel Campia Turzii plant in order to check compliance of its products such as welding electrodes of D-PRINS E51 B, SUDOX E50 FAVORIT and metal fiber manufactured in accordance with STAS SR EN 14889-1/2007 standard to the European Union main requirements.

Within the audit process certification body’s specialists in two days provided a complex inspection of the production process of welding electrodes and metal fiber. Production process was tracked from the point of raw materials input to the point of finished products transportation to storage area and the system was recognized as conformable to the EU standards.

CE marking shows product’s compliance to the European procedure requirements represented by the EU standards which establish general requirements and certification rules for particular product groups. CE marking is a security guarantee for various types of products and is obligatory for all goods coming to the European market which are subject to the EU requirements.

Audit inspection was implemented by the AEROQ Bucharest certification body which is authorized by the European Commission to provide certification of products used in the construction industry.

Metal fiber production for concrete reinforcement started at Mechel Campia Turzii plant at the end of 2009. Fiber usage helps to significantly reduce costs of concrete constructions production as well as improve concrete’s structure, solidity and durability due to more even distribution of metal.

Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.

Tuesday, March 30, 2010

BHP Billiton Iron Ore Negotiations

30 March 2010

BHP Billiton today announced that it had reached agreement with a significant number of customers throughout Asia to move existing iron ore contracts that were previously priced annually onto a shorter term landed price equivalent basis. The agreements reached represent the majority of BHP Billiton's iron ore sales volume.

The structural change that these settlements represent is consistent with BHP Billiton achieving market clearing prices.

SAIL Chairman Mr. S.K. Roongta (extreme left) and SCI Chairman Mr. S. Hajara exhanging copies of the agreement for formation of a shipping joint venture company by SAIL and SCI. The signatories to the agreement are seen at the centre: SAIL Director (Finance) Mr. Soiles Bhattacharya (left) and SCI Director (Technical & Off-shore Services) Mr. U.C. Grover.

SAIL to form shipping JV company with SCI


New Delhi:   Steel Authority of India Limited (SAIL) today signed an agreement for formation of a 50:50 joint venture company with Shipping Corporation of India Limited (SCI).  SAIL is India’s largest steel maker and SCI is the country’s largest shipping company. The agreement was signed by SAIL Director (Finance) Mr. Soiles Bhattacharya and SCI Director (Technical & Off-shore Services) Mr. U.C. Grover in the presence of SAIL Chairman Mr. S.K. Roongta and SCI Chairman Mr. S. Hajara.


As per the agreement, the joint venture company (JVC) will primarily take care of SAIL’s shipping needs by owning and operating ships. The JVC, which will be registered at Kolkata and initially cater to around one million tonnes of SAIL's imported cargo annually, will be expanded subsequently. 
SAIL currently imports around 10 million tonnes (MT) of coking coal, a major input for steel making, per annum. The company’s requirement of imported coking coal would increase considerably in coming years in view of the ongoing expansion plan of SAIL that will nearly double SAIL's hot metal production capacity from the current level of around 14 MT.  The shipping JVC would enable SAIL to have control over part of its coking coal supply chain and effectively assist SAIL in mitigating risks existing in the volatile shipping market. 
SCI, which will bring its expertise in the shipping arena to the JVC, is already in the process of acquiring new vessels, and the JV will give its efforts a further boost.


Speaking on the occasion, Mr. Roongta said that SAIL is keenly focused on ensuring its long-term raw material security and will continue to give thrust on logistics facilities and creation of infrastructure for smooth flow of raw materials and movement of finished products.

MemPulse MBR System to Help California City Meet State BNR Requirements

Siemens Water Technologies will be providing the City of Modesto, Calif., with equipment for a 12.6-MGD membrane bioreactor (MBR) system at the city’s Jennings Road Water Quality Control (WQC) Facility. Valued at more than US$10 million, the MemPulse MBR equipment will be incorporated into the City’s Phase 2 biological nutrient removal (BNR)/Tertiary Treatment Project (Phase 2) to meet new state discharge permit requirements.

Shanghai employees – Update 8


The Shanghai Number One Intermediate People’s Court has convicted the four Shanghai employees detained on 5 July 2009 on charges of receiving bribes and obtaining commercial secrets. 

Rio Tinto is unable to comment on the charge regarding obtaining commercial secrets as it has not had the opportunity to consider the evidence. That part of the trial was held in closed court and no details of the case were made public until the verdicts and sentences were announced today. 

Sam Walsh, chief executive Rio Tinto Iron Ore, said, “Receiving bribes is a clear violation of Chinese law and Rio Tinto’s code of conduct, The Way We Work. We have been informed of the clear evidence presented in court that showed beyond doubt that the four convicted employees had accepted bribes. By doing this they engaged in deplorable behaviour that is totally at odds with our strong ethical culture. In accordance with our policies we will terminate their employment. 

“Shortly after the four employees were detained we appointed independent forensic accountants and lawyers to assist us in carrying out an internal investigation into the claims. This was done to the fullest extent possible. It did not uncover any evidence to substantiate the allegations of wrongdoing. Rio Tinto has concluded that the illegal activities were conducted wholly outside our systems.

“We have already implemented a number of improvements to our procedures, and we have now ordered a further far-reaching independent review of our processes and controls. We will introduce any necessary additional measures and safeguards the review recommends and will spare no effort in doing everything we can to prevent any similar activity.”

Tom Albanese, chief executive, said, “All our employees are required to adhere to our strict policies on how we do business, and to abide by the laws of the countries where we operate.  Ethical behaviour is at the heart of everything we do. We have earned a strong reputation for our ethics through our long track record of responsible business practice. 

“I am determined that the unacceptable conduct of these four employees will not prevent Rio Tinto from continuing to build its important relationship with China.  This is a high priority for me personally.

“I would like to thank all those who have supported us through this very difficult time, particularly the Australian Government.”

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Saturday, March 27, 2010

Roshaneh Zafar: Pakistani Miracle Worker

By Phillip Kurata
Staff Writer
Washington - Roshaneh Zafar, born into a well-to-do Pakistani family in Lahore, started out in life to become an investment banker. Then she had an epiphany.
"I realized that I didn't want to make wealthy people wealthier. I was plagued by the inequity of resources and why so much poverty was borne by women," Zafar said.
She tried her hand at development work at the World Bank in the early 1990s, but was disillusioned when she saw that all too often, large, expensive projects did not affect the plight of poor women. "They were the last to benefit," she said.
A chance meeting with Mohammad Yunus - founder of the Grameen Bank, father of microfinance, and Nobel Peace Prize laureate - led her to Bangladesh, where she witnessed what she calls the "miracle" that a $100 loan can work for a poor woman with an entrepreneurial mind. Zafar talks about Khairoon, a Bangladeshi woman who owned one sari when Zafar met her. Starting with a $100 loan from the Grameen Bank, Khairoon has gone on to open a pastry shop, a poultry farm and a call center.
After training under Yunus for two years, Zafar returned to Pakistan and established the Kashf Foundation in 1996, devoted to the economic empowerment of women. Starting with a handful of clients in Lahore, Zafar has increased Kashf's microlending operations, enabling about 1 million poor Pakistani women so far to take out business loans. "Kashf" in Urdu means "miracle."
Thirty-four percent of the families that borrowed regularly from Kashf for three years have moved above the poverty line, according to Zafar. Kashf clients have increased spending on their children's education by 20 percent and have reduced the number of days per year that their families go hungry from 40 to 10. The women also are getting better health care.
"Poor women don't go to doctors. Poor pregnant women don't go to hospitals. We're beginning to see that shift," Zafar said.
One of Zafar's early clients, Shahida, was left with five children when her husband died of a heart attack in 2000. Her husband ran a shop in Lahore, buying and selling motorcycle parts, "a very macho, male-dominated business," Zafar said. With a $100 loan, Shahida reopened her late husband's shop. After she paid off the loan in manageable installments, she qualified for a second loan, this one for $200. Her credit worthiness has risen to the point that she now qualifies for a $1,000 loan. Using Kashf as her financier, Shahida has expanded her business to employ five men. She has built a house for her family, who lived in a rental property before. She has provided education for all of her children, some of whom are in university.
"This is a huge transformation for one particular household. This could grow into millions of other stories," Zafar said. In fact, Shahida's success has inspired other women in her neighborhood to start businesses, according to Zafar. "Helping women has a snowball effect. They inform and encourage each other," Zafar said.
Kashf has expanded its operations to include all of Punjab Province and part of Sindh Province. In the past 15 years, Zafar said, Kashf has had phenomenal success in loan repayment, with an overdue rate of only 0.5 percent. "Working closely with our loan officers, the clients know that they have to make a small payment on a certain date every month. Ninety-nine percent of the time women will pay you back," she said.
Zafar is making the Kashf Foundation into an interconnected conglomerate of microfinance-based companies. She established the Kashf Microfinance Bank, a for-profit enterprise, in 2009. In contrast to nonprofit microfinance institutions, banks take deposits, allowing them to create a larger lending capacity than nonprofit organizations. The Kashf Bank so far has attracted 15,000 depositors, one fourth of whom are women. Zafar aspires to increase the number of depositors to 1 million by 2015 and aims for two-thirds of them to be women. In addition to the bank, Zafar is laying plans for a Kashf insurance company, a Kashf financial education company and a Kashf business incubator. The business incubator is intended to help microborrowers expand to become small businesses that employ others. "Very few microborrowers ever expand to become employers," Zafar said.
Forbes, a U.S. business magazine, ranked the Kashf Foundation 34th on its list of the world's top 50 microfinance institutions in 2007.
"You're talking about low-income women, servicing them with small loans, and we're still profitable [enough] to be ranked number 34 by Forbes. Imagine the miracle!" Zafar said. "This shows that microfinance is profitable and can draw in private-sector money and it can have a positive return on investment at the end of the day."


Poland: European Success Story but Challenges Ahead

By Camilla Andersen
IMF Survey online

March 26, 2010

  • GDP growth of 2¾ percent expected in 2010, rising to more than 3 percent
  • Fiscal consolidation main challenge ahead, as country prepares for elections
  • Limited export reliance, flexible exchange rate helped cushion crisis blow

The IMF is expecting Poland to post a growth rate of 2¾ percent in 2010, increasing to more than 3 percent in 2011. But upcoming elections are likely to provide a challenging backdrop to policies, the IMF’s Poul Thomsen tells IMF Survey online.

Poland stands out as the only economy in the 27-member European Union to have escaped a recession in 2009. Following the onset of the crisis, exports dropped and economic growth slowed, reflecting deep recessions in Poland’s main trading partners. There was also a sharp slowdown in credit growth as banks tightened their lending criteria. But Poland’s limited reliance on exports, flexible exchange rate, and sound economic policies helped cushion the blow of the crisis. Today, the country remains well positioned for a return to healthy growth.

Thomsen, the IMF’s mission chief for Poland, looks at the country’s prospects, as the world economy continues its recovery from the global financial crisis. He also discusses the unique set of circumstances that protected Poland’s economy during the crisis, including the government’s decision to access the IMF’s new loan instrument for strongly performing economies, the Flexible Credit Line (FCL).

IMF Survey online: As the only member of the European Union to avert outright recession during the global economic crisis, is Poland’s economy likely to rebound more quickly than its peers in central and eastern Europe?

Thomsen: Poland is likely to continue to perform better than most countries in the European Union and better than most of its peers in central and eastern Europe. The global economic environment is improving, and the balance sheet adjustment that happened in response to the crisis appears to have run its course. We also believe that there is new risk appetite among banks, which suggests that credit will start to slowly expand. Another boost to growth will come from the expected near tripling of EU funds to Poland in the next few years.

Against this background, we expect a continued recovery in domestic demand. As a result, we see GDP growth accelerating from 2¾ percent in 2010 to more than 3 percent in 2011.

IMF Survey online: With presidential and parliamentary elections coming up in 2010 and 2011, what are the main challenges for the government?

Thomsen: The main challenge is to begin withdrawing the large fiscal stimulus in order to gradually reduce the fiscal deficit.

Poland added significant fiscal stimulus during the crisis. Indeed, this was one of the major reasons why Poland did not fall into recession during the crisis. The government enacted a discretionary fiscal relaxation of 4½ percent of GDP and allowed the automatic stabilizers to work. As a result, the fiscal deficit rose from less than 2 percent of GDP in 2007 to more than 7 percent in 2009.

This fiscal policy response was entirely in line with the IMF’s recommendation to Poland and to other countries with sufficient space for fiscal maneuver during the crisis.

"Poland is likely to continue to perform better than most countries in the European Union and better than most of its peers in central and eastern Europe."

But now that Poland is in a relatively strong cyclical position compared to other countries, the time has come to gradually withdraw the fiscal stimulus. With three rounds of elections―local elections, followed by presidential and parliamentary elections―coming up during the next 18 months, this will pose challenges to policymakers.

So the main issue at this stage is to decide the speed with which Poland should reduce its fiscal deficit. Now, the government has set a target of reducing it to 3 percent by 2012. We actually think that might be too ambitious, and that the government might be better off targeting a reduction to 3 percent by, say, 2014. Even achieving this delayed goal would require additional fiscal measures compared to what is currently being planned.

IMF Survey online: Markets seem to hold a very favorable view of Poland’s economy. What can the government do to maximize the benefits and minimize the risks associated with capital inflows?

Thomsen: There clearly is a risk that strong performing emerging markets, like Poland, will be a target for large capital inflows, particularly as long as there still is a lot of liquidity in the global economy. This could lead to a situation where the zloty appreciates too fast.

In that case, given where Poland is right now, with inflation under control and perhaps even dropping below the official inflation target, there would be scope for lowering interest rates further to discourage capital inflows. Moreover, there may also be circumstances where the central bank can intervene without jeopardizing the inflation-targeting framework. Of course, if these measures do not work, and if capital inflows persist on a large scale and were to cause overheating, the classical advice is to tighten fiscal policy and allow the zloty to appreciate.

IMF Survey online: Looking back to the crisis, what were the key factors that enabled Poland to avoid a recession?

Thomsen: First, Poland is a fairly big economy with a large domestic market, which makes it less dependent on exports. During the crisis, this meant it was less exposed to negative spillovers through the trade channel than other countries in central and eastern Europe, for instance Hungary and the Czech Republic.

Second, Poland has a well capitalized and profitable banking system. That also helped mitigate possible contagion through the financial channel.

A third factor is that policymakers had considerable room for countercyclical monetary and fiscal policy, because Poland did not have any severe macroeconomic imbalances on the eve of the crisis.

"There clearly is a risk that strong performing emerging markets, like Poland, will be a target for large capital inflows."

Finally, the country has clearly been helped by its flexible exchange rate. Overall, the fact that Poland did so well speaks not only to its strong economic fundamentals, but also to good policy management and sound economic policies.

IMF Survey online: Poland was one of the first countries to access the IMF’s Flexible Credit Line. What impact did the FCL have?

Thomsen: It’s clear that the FCL had a positive impact on the markets, particularly on the market for zloty-denominated government bonds. It’s worth remembering that the government still intended to try to stick to the original deficit limit during first half of 2009.

Then, halfway through 2009, the deficit target was—appropriately—increased, allowing the general government deficit to rise from 3–4 percent to close to 7 percent of GDP. The availability of the credit line with the IMF was an important reason for the increase not to have spooked the markets. In other words, the FCL contributed to the room for maneuver that allowed policymakers to implement countercyclical policies.

IMF Survey online: Poland’s flexible exchange rate helped the country adjust during the crisis. How quickly should Poland seek to adopt the euro?

Thomsen: The authorities have never set an official date, although at some stage there was an unofficial target date of 2012. Given the adjustment effort that lies ahead for Poland in the next couple of years, one should not set an early date for ERM II entry.

More generally, in determining when to adopt the euro, policymakers should be mindful of how well their country has been served by the flexible exchange rate policy. That said, there is no doubt that euro adoption remains an important goal for Poland.