Atlas Iron Receives Approval For Wodgina

Mining Expected to Commence in June

Australian iron ore junior, Atlas Iron, has secured government approval for its Wodgina iron ore project in Western Australia.

With all environmental approvals complete, Atlas expects to move its mining fleet to the site with mining expected to commence in June this year.

"To take a project from an iron ore discovery to an iron ore mine in less than 18 months is simply remarkable," managing director David Flanagan said in a statement on Friday.

"We are now well positioned to benefit from very strong demand, high iron ore prices moving forward, and to meet our target export rate of six Mtpa by December 2010."

The Wodgina project will start at a production rate of two-million tons a year, with the initial mining from the Anson deposit. The mine is expected to produce a quality, low-alumina fines only product, which would be trucked to the nearby Port Hedland for export.

The company has also commenced drilling at its Wodgina North iron ore prospect which has an exploration target of between 20 million and 40 million tons at 57 per cent to 60 per cent iron.

"In the event that drilling is successful, Atlas will move to fast rack feasibility studies targeting a production expansion of Wodgina during late calendar year 2011," it said.

India Raises Iron Ore Lumps Tariff

Export Tariff Doubled To 10 Per Cent

India’s government has raised the export duty on iron ore lumps to 15 percent from 10 percent,Finance Minister Pranab Mukherjee said in the country’s parliament on Thursday.

The move is designed to make more iron ore available for domestic steel makers, who are currently facing a shortage in ore supplies and higher prices.

India raised the duty on iron ore lumps in December to 10 percent from 5 percent. The duty on fines will remain at 5 per cent.

It is likely that India’s exports to China will suffer as a result of this move. India was the third largest supplier last year to China – the world’s largest steelmaker- but exports of 33.36 million tonnes between January and March of this year made it the second largest supplier, after Australia but ahead of Brazil.

China Allows Steel Mills To Sign Individual Contracts

China Allows Steel Mills To Sign Individual Contracts

The lobbying body for the Chinese steel industry, the China Iron and Steel Association (CISA), has acknowledged that Chinese steel mills have signed individual deals with global miners, but it said that iron ore price negotiations are continuing

"Considering the operating pressure and difficulties of steelmakers, they [the steelmakers] can now talk with the big three miners and buy iron ore at provisional prices under CISA's regulations," said Vice-chairman Luo Bingsheng.

Despite this Mr Luo said that price negotiations were ongoing: "It is totally the individual business of companies," he said. "They [the miners] offer a price we don't accept, that doesn't mean the end of negotiations. The price talks are still going on."

CISA previously refused to allow Chinese steelmakers to sign contracts until a national benchmark price had been agreed. Despite previously suggesting that a deal would be done-and-dusted by 1 April talks have dragged on with seemingly no end in sight.

CISA also asked domestic steel companies and traders to stop buying iron ore for the two months from Vale, BHP and Rio Tinto to protest against the price monopoly.

Earlier reports said some Chinese steel mills have accepted a quarterly pricing regime, based on the previous three months' average spot prices or at a price agreed by steel mills in Japan and Korea. The prices were said to be around 90 per cent higher than the previous benchmark price and were to run for a period of just three months from 1 April instead of the customary one year’s duration.

China is the world’s biggest importer of iron ore.

Fortescue To Pay Millions In Compensation

UK Shipping Contractor Awarded $78 million

The High Court in London has ordered Australian iron ore miner Fortescue Metals Group to pay a shipping contractor $US78 million in compensation after losing a court battle.

The court heard that Fortescue suspended a number of shipping charter contracts in 2008 at the time of the global financial crisis, including one with UK company, Zodiac Maritime. Zodiac took the matter to the British High Court and was awarded $78 million in damages yesterday.

"The litigation commenced when Fortescue suspended a number of charter contracts in 2008 due to turmoil in international freight and iron ore markets," Fortescue said in a statement on Thursday.

"Other shipping contracts that were in dispute were renegotiated and settled prior to any court hearing," the company said.

FMG also said it had included $21 million for the claim in its half-year accounts and the remaining $62 million would be factored into the full-year results.

New Delhi Police Find Source of Cobalt-60

Source Was Scrapped Machine from University

Police in New Delhi Police said it has traced the origin of the radioactive Cobalt 60, which has led to the death of one person and the serious illness of seven others, to scrap sold by the Department of Chemistry at the University of Delhi in February.


According to the police, the Cobalt-60 was in a Gamma Irradiator, which the University's Department of Chemistry bought in 1968 from Canada and which had been in disuse since 1985.


The radioactive material was found in a metal scrap shop in the Mayapuri district of the city. The shop owner and his assistants are among those affected by exposure to it.


The irradiator was sold off with other unused material in an auction on 26 February this year, when it was bought by a scrap dealer in Mayapuri, Harcharan Singh Bhola. He, in turn, removed the iron part from the cell and sold the lead to another scrap dealder, Giriraj Gupta.

Gupta further dismantled the irradiator and sold the lead to other scrap dealers but keeping part of the iron scrap himself. This was removed by Bhola reached Deepak Jain through Rajender, who died on Monday.

On April 8 the city authorities were informed about people suffering burns and other symptoms associated with exposure to a radioactive source.


Experts from the Department of Atomic Energy and the Atomic Energy Regulatory Board (AERB) were ultimately able to recover and secure eight sources of different intensity from the shop as well as a godown owned by Jain. Two more sources were later recovered from the shop of Gupta.

China Approves Centra-WISCO JV On Eyre Peninsula

WISCO To Take Stake In Enlarged Centrex

The Chinese government has approved a joint-venture on the Eyre Peninsula in South Australia between Wuhan Iron and Steel (Wisco) and Australian iron-ore miner Centrex Metals.


All the conditions surrounding the joint venture have now been met and Centrex is targeting the deal to be closed by the end of May.


Under the terms of the agreement, Wisco will earn a 60 per cent interest in the iron-ore rights of five of Centrex’s exploration tenements on the Eye Peninsula for a total investment of A$271-million.


Wisco is to invest A$75-million of the total investment capital into sole funding of the exploration of the joint venture and will take a 15 per cent direct equity stake in the enlarged capital of Centrex.

Other points to note in the deal:

- WISCO is to pay Centrex A$51.5 million on completion (A$ 0.5 million deposit already paid) and a further A$ 26 million on the first anniversary of the completion (total A$ 78 million).

- WISCO is to pay four further payments of A$ 27 million if and when the JORC Inferred Resources for the project reach 1.25Bt, 1.5Bt, 1.75Bt and 2.0Bt respectively (up to an additional A$ 108 million).

- WISCO is to additionally sole fund the first A$ 75 million of exploration for the Joint Venture.

- WISCO is to assist with project financing for construction.


The two companies have also signed a heads of agreement to develop Centrex’s Sheep Hill port facility on the peninsula which would seek approval for the development of a Cape-sized vessel capable, deep-water port facility for use by the joint-venture and other exporters.

Beowulf To Drill Further At Kallak Iron Ore Project

Beowulf Mining, the AIM and AktieTorget traded mineral exploration company, has announced that a drilling programme will commence this week at its Kallak Iron Ore deposit at Jokkmokk in northern Sweden.

A grid pattern of 35 holes, totalling 3,500 metres of drilling is expected to cover the complete deposit and potential surrounding areas. The drilling programme is expected to be completed by July 2010 with all analytical testing completed in August 2010.

All the drill cores will be geologically logged and the sections selected for analysis are expected to be assayed at the ALS/Chemex laboratory in the town of Piteå in northern Sweden. The drill cores will continuously be assayed as received at the laboratory. Assay results for the initial drill holes are expected in June 2010 and the full final test results are anticipated to be received during August 2010.

The objective of the drilling programme is to further define the quantity and quality of iron ore already known to be present in the licence area and to allow a maiden JORC compliant resource/reserve to then be sought.

Commenting on the drilling programme, Beowulf's Exectuive Chairman,Clive Sinclair-Poulton said:

“We are delighted to confirm that drilling will shortly commence on the Kallak iron deposit as anticipated. With the recent promising findings of RMG’s conceptual study and MINPRO’s encouraging metallurgical test results indicating that Kallak is potentially able to produce a high grade, high quality product, we look forward to announcing the results of the drilling programme in due course. We also look forward to the planned drilling programme at our Ruoutevare iron ore deposit scheduled for Q4 2010 which is also expected to enhance the Company’s asset base.”

China Ends Iron Ore Talks

"Current negotiations have not been negotiations" - CISA chief

Iron ore price talks between Chinese steel mills and the big three global iron ore suppliers - Vale, BHP Billiton and Rio Tinto - have been suspended, Luo Bingsheng, vice-chairman of the China Iron and Steel Association told reporters on Tuesday.


"The current negotiations have not been negotiations at all because no buyers have been given a say (in deciding prices)," Mr Luo said at a briefing.


He added that the monopoly status of the three big three suppliers meant that they were no longer considering the interests of their customers, he said.


He said China would take a strategic approach to resolving its dependence on foreign ore suppliers by trying to encourage domestic iron ore output.


Meanwhile spot prices in China fell on fears that government measures regarding the property market would curb demand for iron ore. This follows rising property prices in China.

On 24 April China’s securities regulator announced moves that requires developers to submit fund-raising plans for review, adding to curbs imposed by the central bank on loans for third-home purchases, increased down-payment requirements and higher mortgage rates.


Iron ore prices have soared, reaching $189.50 last week for 63.5 percent-content iron ore in Chinese ports while import prices averaged $96.31 a ton in the first quarter. However, steel stockpiles rose earlier in the year as the Chinese property sector appears to have cooled in the light of rising prices and more regulation.


However, Mr Luo said that steel inventories have dropped 9 percent to 9.77 million tons as at 23 April.

Noble May Make Fresh Approach To Macarthur

New Offer May Come This Week

The Australian Financial Review’s Street Talk column reported in its Wednesday edition that Noble Group Ltd may be preparing to make a new approach to Macarthur Coal as early as this week.

Last week Noble saw a deal rejected by its shareholders in which it would have become the largest shareholder in Macarthur.

Macarthur is currently in talks with US miner Peabody Energy Corp., which has made a A$4.1 billion cash offer for the company.

India Hikes Iron Ore Lumps Tariff

Fines Tariff Remains Unchanged

India’s Commerce and Industry Minister Anand Sharma has said there will be a minor increase in the export duty on iron ore lumps to discourage shipments, though duties on iron ore fines will remain unchanged.

There had been fears of a rise in the duty rates on both iron ore fines and lumps to 20 per cent. The government at present levies an export duty of 10 per cent on iron ore lumps and 5 per cent on iron ore fines, though sources were unable to confirm or deny reports that the duty on lumps could go up by another 5 per cent.

"There will be no increase in the export duty on iron ore fines, but there will be a marginal increase in the export duty on lumps, which we are in agreement (with other ministries)," Sharma told reporters.

Last week, officials from the steel, mines, commerce and finance ministries discussed the issue of a rise in the export duty on different types of iron ore.

The Steel Ministry wrote to Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee last month seeking a two-fold hike in the present duty structure. The ministry wants to discourage outward dispatches as it is of the view that the vital raw material for steel making should be retained for domestic consumption.

In 2008-09, iron ore exports amounted to 106 million tonnes, about 85 per cent of which were fines.

Japan's Iron Ore Imports Double Year-on-Year

Japan Imports 11.87mn Tonnes of Iron ore

According to the provisional data released by the Japanese Ministry of Finance, the country imported 11.87 million metric tons of iron ore and concentrate in March this year - an increase of 102.7 percent year on year.

The value of these imports was JPY 78.83 billion ($836.48 million) in value, up 31.8 percent compared to March 2009. The average iron ore import price in March this year stood at JPY 6,641/mt ($70.46/mt)

In the Japanese fiscal year 2009-10 (April 2009-March 2010), Japan imported 115.2 million metric tons of iron ore and concentrate, at a cost of JPY 813.08 billion ($8.63 billion), a decrease of 10.3 percent and 38.8 percent respectively.

In FY 2009-10, the average import price of iron ore was JPY 7,058/mt ($75/mt on current exchange rate).

Indian Man Dies Of Radiation

Doctors 'Give Up' On Other Patients

Doctors treating radiation exposure patients at the All India Institute of Medical Sciences (AIIMS) in New Delhi say they have given up hope after the death of one of the patients.

Rajender Prasad, 35, a worker at a shop in the city’s Mayapuri scrap market, died after multiple organ failure at around 9.30pm local time at the AIIMS on Monday. He was moved there on April 13 from the city’s DDU hospital.

"He developed bilateral pneumonia and was exhibiting signs of kidney and liver function impairment. He was put on a ventilator on April 24," a doctor treating the radiation victims said.

According to doctors, another radiation victim Ram Kalap is critical and his blood counts have reduced significantly. He has been put on prophylactic antibiotic and anti-fungal agents.

"We have given up hope on other patients. It's only a wait and watch situation," says the doctors treating the radiation exposure patients.

"After one patient's death yesterday, all other patients are very depressed, we are now counselling them," the doctors added.

"There is hardly any literature on how to deal with radiation patients, that's our handicap. Cancer of the thyroid and blood pose serious danger for these patients," the doctors added.

Four other radiation exposure patients are still admitted in AIIMS, while Deepak Jain, the owner of the scrap shop from where radioactive material Cobalt-60 was recovered, is at the Apollo Hospital. Another patient Ajay Jain is undergoing treatment at Army Research and Referral Hospital.

Ten sources of Cobalt-60 had been found in the Mayapuri scrap market earlier this month and eight persons were hospitalised. One of them has since been discharged.

CBH Backs Toho Bid

Independent Directors Unanimously Back Bid

Independent directors at Australia’s CBH Resources' have unanimously backed Japan's Toho Zinc's friendly takeover offer for the zinc, lead and silver miner

CBH said in a statement Toho was offering 24 cents a share cash and $1000 cash per CBH convertible note. The offer, which already owns 24.1 per cent of CBH, was above an independent expert's valuation range of 18.7-23.2 cents a share.

It said the offer was subject to 90 per cent shareholder approval.

"This offer from CBH's major shareholder, Toho, is very attractive for CBH shareholders, particularly when compared to previous proposals received recently by the company," Managing Director Stephen Dennis said.

Toho said the offer valued CBH's ordinary equity at $262.7 million.

CBH has also been the target of Belgian’s Nyrstar, which has offered 19.5 cents a share and $1000 for each convertible note.

Connemara Mining Makes Significant Zinc Find

39 per cent Zinc-Lead Deposit At Limerick Project

Shares in Irish zinc miner, Connemara Mining, leapt 36 per cent in London yesterday as the company released news of a "very significant result" in its County Limerick zinc project.

The AIM-listed explorer said it has found a 39pc combined zinc-lead deposit from the results of Hole 45 at Stonepark. Chairman John Teeling said the zinc was high grade, at a shallow depth and the discovery area extended over 500 metres.

"But, most importantly, this is a 'sweet spot', which lifts the overall metal content in the deposit to grades which allow for economic mining," Mr Teeling added.

The discovery was made during the company's drilling programme. Hole 45 hit 7.45 metres of 19.2pc zinc and 8.5pc lead -- the best intersection to date on the project -- and includes 4.25 metres of almost 39pc combined zinc-lead.

The Stonepark North programme is operated by Connemara along with Canadian minergiant Teck Resources which holds a 75 per cent stake in the project.

China Steelmakers Sign Quarterly Deals - Reports

Low Iron Ore Stocks Force Steel Mills' Hand

Reports from China suggest that some Chinese steelmakers have signed private pricing contracts on a quarterly basis with global iron ore suppliers.


The China Economic Times cites an unnamed executive at China’s largest steel mill, Hebei Iron and Steel Group, as saying that several of the company's subsidiaries had no choice but to accept the quarterly pricing proposal as their ore reserves would last last until mid-May.

"Some steel mills, including us have accepted the new quarterly pricing system, based on the previous three months' average spot prices," a sales executive from another large steel mill told China Daily.

"The China Iron and Steel Association (CISA) has issued a document asking steel mills not to sign iron ore contracts with the three big miners until the final negotiations are completed. But we cannot stop production and hence most of the steel mills have signed contracts privately like they did last year," he added.


The Shanghai Securities Journal suggested on Monday that Chinese steelmakers were basing these deals on Vale's agreement last month with Japanese and Korean mills that resulted in a 96.4% rise on last year's benchmark to about $110 a metric ton.

Official sources have denied the reports.

Some analysts estimated that the uptrend in iron ore prices would be short-lived, as most traders have started to show pessimism on market prospects.

The three global miners - Vale, Rio Tinto and BHP Billiton - broke the 40-year tradition of selling iron ore on an annual contract basis this year opting instead for a quarterly pricing system.

Atlas Set To Announce $60 Million Placing

Working Capital Needed To Fast-Track Projects

Australian iron ore junior, Atlas Iron placed its shares in a trading halt today pending an announcement regarding a capital placing.

Atlas looks set to raise $60 million to fast-track production plans to cash in on the rising price of iron ore price.

It is understood the miner wants to greatly increase its annual iron ore target of 6 million tonnes with the spot price now around $US190 a tonne.

Funds from the placement are expected to provide the additional working capital to ramp up output at its flagship Pardoo project and also to fast-track plans to bring its Wodgina and Abydos mines into production. Wodgina is due to start production in the second quarter of 2010, with shipments starting later in the year.

Shares in Aurox Resources, which Atlas recently agreed to takeover in a $143 million scrip bid were also brought to a trading halt.

Perth-based broker Hartleys is advising Atlas on the raising.

Hebei Takes Over Macheng Iron and Ore Assets

Hebei Takes Over Macheng Iron and Ore Assets

China’s Ministry of Land and Resources has approved a plan by the Hebei provincial government to transfer assets from Macheng Iron and Ore to Hebei Iron and Steel Group, reports 163.com.

Macheng Iron and Ore has proven reserves of 1.044 billion tons of iron ore and prospective reserves of 500 million tons of iron ore with an average grade of 34.89 percent.

Hebei Iron & Steel Group, currently has total iron ore reserves of about 4.4 billion tons.

The company plans to increase its production capacity of iron ore to 30 million tons a year and improve its self-sufficiency rate in iron ore from 35 percent to 40 percent.

Coal India To Sign Vizag Port Deal

Coal India To Sign Vizag Port Deal

Coal India Ltd (CIL) is expected to sign a deal to acquire space at Vizag Steel’s port in Visakhapatnam.

CIL Chairman, Partha Bhattacharya, , said the company is looking to go in for joint venture or acquire parts of existing ports rather than setting up its own.

“We are more or less close to signing a deal with Vizag Steel to start with. RIL/RINL has moved out of Vizag Steel so that space has been offered to us and we have accepted it for our imports. Compensation needs to be discussed. A 4-5 million tonne capacity would be available to us at any point in time,” he said.

CIL is also in talks with other ports, including Gangavaram, Dhamra, Krishnapattanam, and Kandla and is also looking at coal-bed methane and coal mine gasification projects, though Mr Bhattacharya said water contamination problem was a concern.


“As long as there is no definite solution (to the water contamination problem) we can’t risk it because we don’t have coal in barren places. But if there is any technology evolving anywhere in the world, we will take it. We are seriously looking at underground coal gasification projects,” he said.

Coal India Ltd. may also spend $1.7 billion to buy stakes in five mines in Australia, Indonesia and the U.S. to help bridge a shortfall in Asia’s third-biggest energy consumer.

Iran's Iron Ore Exports Up 53 Per Cent

Volume Up 53 Per Cent

Iran's iron ore exports rose 53 per cent in the calendar year ended March 20, 2010, the Iranian Mines and Mining Industries Development and Renovation Organization report.

Exports by volume were 4.79 million tons, a 53 percent rise compared to the preceding year and the value of the exports was around $297.4 million.

Last year, Iran produced 25 million tons of iron ore, 1 percent more than the year before.

Northern Energy Lands Chinese Deal For Colton Mine

Mine Will Sell 65 Per Cent Of Output To Chinese Mill

Australia’s Northern Energy Corporation has agreed a multi-million dollar deal with the Xinyang Group in China to sell 65 per cent of coking coal mined at its Colton mine near Maryborough in Queensland over the next 10 years.


At current coking coal prices the agreement would result in $700 million revenue to Northern Energy over the next 10 years.


The company will issue 16 million shares to Xinyang, raising $23 million to develop Colton and securing 100 jobs anticipated at the site.


Northern Energy expects to mine 500,000 tonnes a year of coking coal for each of the next eight to 10 years, although the possibility of extending the life of the mine was not being ruled out.


“The agreement with Xinyang provides us with the capital to take the next step in the development of Colton while retaining 100 per cent of the project as we fully evaluate the size of the Maryborough resource base and the potential for further mine expansion,” managing director Keith Barker said.


“The size of the resource identified to date has exceeded our original expectations and the ongoing evaluation work provides us with confidence that additional resources will be defined which will in turn enable us to ultimately increase production beyond the 500,000 tonnes per annum currently planned. Expansion of production will require additional mining lease areas and will be subject to a separate approval process to that applicable to Colton.”

ThyssenKrupp Agrees Doubled Iron Ore Prices

Company "had to accept" new deal and quarterly contracts

Leading European steelmaker ThyssenKrupp AG said on Thursday that it has reached agreement with an iron ore supplier for prices for the second quarter of 2010.

The deal will see a large price increase and a shift to quarterly supply deals.

A spokesman for ThyssenKrupp Steel Europe said the company "had to accept," price increases of up to 100%, depending on the quality of the supplies.

The agreement is in line with similar agreements that Asian steelmakers had previously struck with iron ore miners, he added.

India May Increase Iron Ore Export Duty

New Duty Expected to be 20 per cent

In a move designed to curb iron ore exports, India’s Government looks set to increase the tax on iron ore exports. The tax is likely to be fixed at a uniform rate of 20 per cent across all iron ore products, said a Steel Ministry official. Current rates are 5 per cent on iron ore fines and 10 per cent on high-grade iron ore lumps.

India’s Steel Secretary, Mr Atul Chaturvedi, said. “The tax structure on iron ore exports was discussed between different ministries today. We understand that the export tax on iron ore lumps may go up. A decision on increasing the tax is likely to come as early as this Friday.”

Officials from the Ministries of Finance, Mines and Commerce met on Thursday to discuss the issue of increasing the export tax.

The Standing Committee on Coal and Steel also urged the Ministry of Steel to take up with the Ministry of Finance the issue of curbing iron ore exports and expressed its concern that iron ore reserves may last only till 2021-22.

Zimasco To Increase Ferrochrome Production

Sinosteel Subsidiary To Treble Production

China’s Sinosteel Corporation has announced plans to increase production at its Zimbabwe Mining and Smelting Company subsidiary by 300 percent.

Mr Zhang Suwei, Sinosteel South Africa managing director, told reporters in South Africa that the firm will expand ferrochrome production from the current 210 000 tonnes a year to between 500 000 and 600 000 tonnes. Zimasco is said to have access to the world’s second largest reserves of chrome after South Africa. Two furnaces were opened in April last year following the liberalisation of the Zimbabwean economy.

Sinosteel has a 92 per cent stake in Zimasco and has an option to buy the remaining eight percent, however it is one of the companies expected to comply with Zimbabwe’s new Indigenisation and Economic Empowerment regulations that seeks to cede 51 percent shareholding to locals, regulations that have been greeted with a mixed response.

Iron Ore Talks Beset By Differences

Miners Cutting Supplies

Iron ore price talks are “beset by differences” according to the chairman of one of China’s largest steel manufacturer, Angang Steel Co.

Speaking to reporters in Hong Kong on Wednesday, Zhang Xiaogang said that the big three global miners actually cut exports to China during the talks. “That was a step they took as part of the negotiations,” he said.

The big three global miners – BHP Billiton, Rio Tinto and Vale - are trying to get Chinese miners to go from annual to quarterly contracts. Steelmakers in other parts of Asia, such as Korea and Japan, agreed quarterly prices from 1 April, however their Chinese counterparts – with the support of their government – are holding out for an annual benchmark deal.

Angang plans to increase capital spending by 19 percent to $1.4 billion this year, company secretary Fu Jihui said in Hong Kong. The company has enough capital to cover operations, and doesn’t plan to sell any more equity, Fu said.
Orders and export demand for steel are improving this year, Vice Chairman Chen Ming said.

Brockman Signs Iron Ore Deal With Sinosteel

Deal Could Be Worth $A6 Billion

Pilbara iron ore producer Brockman Resources has signed a sales deal with China's largest iron ore importer, Sinosteel, which could be worth more than $6 billion.

Brockman announced on Tuesday that it has signed a landmark memorandum of understanding with Sinosteel Australia, for the purchase of up to 50 per cent of future production from its Marillana iron ore project in Western Australia.

"This is a key milestone because you are now dealing with one of the most credible international companies when it comes to offtake and it shows credibility to us and our project," managing director Wayne Richards said.

"To get someone like Sinosteel willing to market 50 per cent of your ore is a major benefit." Mr Richards added that talks have been taking place for 18 months.

The agreement involves the purchase of up to 10 million tonnes a year of production over an initial five-year period.

Commenting on the deal Sinosteel Australia's managing director Li Ying said: "Our company is keen to co-operate and partner with Australian companies with credible projects seeking to leverage our capability to supply raw materials for China's steel industry, whether this is iron ore, manganese, chrome ore or coal."

Toho Raises CBH Offer

New offer is 20 per cent higher

Japan’s Toho Zinc had increased it offer for Australia’s CBH Resources Ltd by 20 per cent.

Toho, which has a 24 per cent stake in CBH, is now offering 30c a share, up from an earlier bid of 25c.

Toho intends to raise its holding to 49.9 percent, the maximum level permitted without taking control.

CBH is the subject of a two-way takeover tussle with Belgium’s Nyrstar offering 19.5c a share last week.

CBH said that its directors will meet to decide whether to consider the latest proposal. Shareholders are due to meet on 28 April to discuss the takeover bids.
Shares in CBH were up 13 per cent at 21.5c a share.

White Energy To Buy South Australian Coal Ltd

Deal Gives Access to 500mn Tonne Resource

New South Wales’ White Energy is to buy South Australian Coal Limited in a $A39.3 million all-share deal.

The deal will give White Energy access to SA’s 500 million-tonne coal resource at Lake Phillipson, about 60 kilometres south of Coober Pedy in the far north of the state.

White Energy MD, John Atkinson, says shareholders in SACL are reinvesting $100 million back into White Energy, which it will add to its overall funds.

"The key figures in the South Australian coal company are putting their money where their mouths are and that'll give White Energy in excess of $200 million and we'll then use funds to exploit the opportunity at Lake Phillipson and also exploit the opportunities in other coal markets," he said.

Lake Phillipson coal will also be benefit from processing by White Energy to enable it to be exported.

"That process takes high-moisture coal and effectively reduces the moisture content and creates a high-energy and high-value thermal coal out of what started as a high-moisture low-energy coal," he said.

SACL was spun-off from Felix Resources when Felix was taken over last year by Chinese state-owned Yanzhou Coal Mining last year.

Under the bid, SACL shareholders are being offered 0.07985 WEC shares for each share held. They could also receive an additional 21.61 cents per share if additional coal resources are defined in SACL's existing tenements.

Alternatively, SACL shareholders can receive 19.96 cents per share in cash, up to a maximum aggregate of all shareholders of $10 million.

SACL's independent directors have unanimously recommended the deal, in the absence of a superior proposal.

Noble Shareholders Reject Gloucester Coal Sale

Trader Also Does Not Agree With Peabody Offer

Singapore commodity trader Noble Group said on Monday that its shareholders have rejected a resolution proposing the sale of the firm's stake in Gloucester Coal to Macarthur Coal. The company said the proposed conditions give different options to large and small shareholders.

The resolution, rejected by shareholders voting at a meeting in Hong Kong, would have given the firm a 24 per cent stake in Australia's Macarthur, the subject of rival bids as firms compete for its cleaner coal.

Noble also said in a statement it did not agree with US coal company Peabody Energy's proposed $16 per share takeover of Macarthur.

"Having come up the hard way, and in the not too distant past being pretty small ourselves, we are very opposed to the spirit of the Peabody transaction," the company said in a statement.

Great Lakes Iron Ore Shipments Soar In March

Iron ore shipments on the Great Lakes were higher in March than in any other March since 2006 as the American steel industry continues to pull out of recession.

The Lake Carriers' Association says its ore boats shipped 2,109,911 net tons in March. However, the year-to-date figure of 4.1 million tons is still 13% lower than the five-year average for the first quarter.


Duluth, Two Harbors, and Silver Bay all beat the five-year averages for March ore shipments. Superior didn't ship any iron ore at all last month. The locks at Sault Ste. Marie, Mich. opened on March 21, four days ahead of schedule, to accommodate the need for iron ore at steel plants.

New Hopes Weighs Up Alternatives To Macarthur

Company Will "Look Somewhere Else" If Bid Fails

Australia’s New Hope Corporation, which last week had a revised takeover bid for Macarthur Coal turned down, has said that it will look for other acquisitions if, as seems likely, its bid for Macarthur is unsuccessful.

Speaking to Australia’s ABC TV network on Sunday, New Hope Chairman Rob Millner said “Obviously there are other avenues for us. If we can’t find anything in coal, we’ll have to go and look somewhere else. Going forward, there’s a real shortage of particularly pulverized coal in the world, and most of the ports around the world are constrained by capacity, so I see a good future for coal, both thermal and PCI coal.”

Commenting on the Macarthur bid, Mr Millner said: “If we secured Macarthur that would probably steady us up for the time being (with acquisitions). But, you know, it's certainly going to create a very large independent coal company with a market capitalisation of well over $8 billion and it would be in the top 30 to 40 companies within Australia."

Meanwhile, Andrew Harrington, a coal analyst at Paterson Securities, told ABC “They [New Hope] don’t have any debt on their balance sheet. They’ve got A$1.5 billion in cash in the bank and probably another half billion coming from the sale of their Arrow Energy shares, so they could easily plonk down the cash and raise some financing to afford this.”

New Hope’s revised takeover bid for Macarthur - its second bid - included A$950 million in cash, but it was rejected by the Macarthur board on 15 April. Macarthur said the New Hope bid did not represent an adequate premium for control of the company. Macarthur said on Friday that it intends to enter into talks with US miner Peabody Energy, which raised its bid to A$16 a share, valuing Macarthur at A$4.1 billion.

Macarthur To Talk To Peabody

Large Shareholders may keep stakes in company

The board of Macarthur Coal has said that it will open talks with Peabody, following the American company’s latest $16-a-share offer that values Macarthur at $4.07 billion.

Peabody will be granted a five day period of due diligence.

However Macarthur said an extraordinary general meeting scheduled for Monday to approve its takeover of Gloucester Coal has been postponed to a date, time and venue to be advised.

The moves came after two of Macarthur’s largest shareholders, Korean steel mill Posco with an 8.3 per cent stake and international steel company, ArcelorMittal, which has a 16.6 per cent shareholding in Macarthur, gave a guarded welcome to Peabody’s latest offer.

POSCO said that it "confirms its in-principle support for a Peabody-led privatisation of Macarthur" while ArcelorMittal stated "that the Peabody offer is one that warrants due consideration". Macarthur’s largest shareholder, China’s Citic, has yet to indicate its support for the offer. Peabody has indicated that Macarthur’s three largest shareholders may be allowed to keep their stakes in the company.

The deal to buy Gloucester Coal and a stake in Hong Kong-based Noble Group’s Middlemount project in Queensland would have given Noble at 24 per cent stake in Macarthur. Industry-watchers are suggesting that this deal is now dead as Macarthur begins its engagement with Peabody. However, Macarthur is yet to officially recommend Peabody’s latest bid which could leave the way open for a bid from another mining giant, Switzerland’s Xstrata.

China Minmetals Considers Mauritania Iron Ore Project

Minmetals Carrying Out Due Diligence

China’s largest minerals and metals trader, China Minmetals Corporation, is considering iron ore mining projects in Mauritania to diversify its raw material sources, a report in the China Daily newspaper said on Friday.

The paper reports that the company’s vice-president Xu Siwei, said on Thursday that it has started due diligence on iron ore projects in the West African country and that it expects to sign an agreement soon.

"Other international miners have also expressed interest in the Mauritania mines, but we are confident of succeeding," said Mr Xu.

Mauritania already has one large iron ore operation in SNIM, which exports much of its output to Europe, in particular to France.

Minmetals imported 4 million tons iron ore from Mauritania in 2009 and Mr Xu said that the figure would be higher this year. Mauritania is the ninth largest iron ore supplier to China and Minmetals has been importing Mauritanian iron ore through its branch office in Germany.

The country has been producing iron ore since the early nineteen-fifties. Iron ore mines are situated at at Idjill Kédia, M’haoudat and Guelbs.

China is the latest overseas country to consider mining projects in the country.

Minmetals acquired Australian zinc miner Oz Minerals for $1.4 billion in June 2009 and last year also gained control of Hong Kong-listed Hunan Nonferrous Metals Co Ltd.

Chinese miners will consider more investment opportunities in the higher-risk investment destinations of Africa, Central Asia and Russia as it is difficult to acquire high-yielding mines in low-risk countries like Australia and Canada this year, the newspaper said.

China To Investigate Iron Ore Trade

Commerce Ministry Defends Benchmark System

China's Ministry of Commerce has announced that it will launch an investigation into the big three global miners’ monopoly over the iron ore trade while defending the traditional benchmark system of pricing. This follows moves by the big three international mining giants to end the 40-year-old system.

"The commerce ministry's anti-trust bureau is currently studying the issue," ministry spokesman Yao Jian said on Thursday. Mr Jian said the benchmark system offered a transparent, stable and foreseeable trading platform for both the suppliers and buyers and enabled the two sides to control production costs and balance their interests but he warned that China's booming iron ore market would become more rational as it diversified supply channels at home and abroad, said Yao.

He pointed out that the number of countries China was sourcing its iron ore from had risen from 10 to 20 in recent years. Chinese steel mills had reduced their reliance on imports, with the percentage of imports falling between 50 and 60 per cent this year.

Chinese steel mills have yet to agree a 2010 price with miners BHP, Rio Tinto and Vale despite other Asian steel mills having agreed price increases of over 90 per cent and a move from annual to quarterly contracts.

Peabody Ups Macarthur Offer

New Offer is $16 a share

American miner Peabody Energy has upped its takeover offer for Australian coking coal miner to $16 a share. The offer values Macarthur at $4.1 billion and is Peabody’s third bid for the company.

In its bid, Peabody said it is “clearly superior” for Macarthur’s shareholders to accept their offer rather than taking over Gloucester Coal.

Meanwhile, Gloucester Coal itself says it has doubled the prices it has achieved to US$180 a tonne compared to US$90 a tonne last year.

CISA Chief Blasts Miners' Dictatorial Attitude

Luo Accuses Miners of "High Degree Of Monopoly"

The chairman of the China Iron and Steel Association has blasted iron ore miners for their attitude towards their Chinese customers.

Speaking at an industry conference, Luo Bingsheng said that the miners are no longer negotiating but dictating prices to their customers.

"There are no negotiations any more," Mr Luo said "now it's 'I say the price, you must accept, or else we will stop supplying you.'"

Mr Luo accused miners Vale, BHP Billiton and Rio Tinto of "a high degree of monopoly" in the supply of seaborne iron ore.

He added that while steel prices have risen sharply the domestic steel industry still faced the challenges of global protectionism, sharply higher inventory levels and slow consolidation in the industry.

Tata To Send Mozambique Coal To Europe

Benga Coalfield Inaugurated

Tata Steel is expected to start sending coal to its Corus operations in Europe from a new $1 billion coalfield in Mozambique by the end of this year.

The groundbreaking ceremony was attended by Mozambique’s president Armando Emilio Guebuza, who officially inaugurated the Benga coal project in the country’s Tete province on Tuesday.

Tata has a 35 per cent stake in the project, with the remainder held by an Australian company, Riversdale Mining, in which Tata has a 21 per cent stake.

Tata has the right to buy 40 per cent of the mine’s two million tonnes a year initial output, 85% of which is good quality hard coking coal with the remainder low ash thermal coal. Production is expected to rise to almost 8 million tonnes over the next few years. The same level of production is likely to continue for 25 years at least.

Output Up At Iranian Iron Ore Mine

Target Is 1 Million Tonnes in current year

Jalal Abad iron ore mine in the southern Iranian province of Kerman, produced 965,000 tonnes of iron ore in the last Iranian year which ended on 20 March 2010. This is a rise of 13 percent over the previous year’s 852,000 tonnes.

Jalal Abad, which supplies iron ore to both local and international steel mills has iron ore reserves of over 200 million tonnes and is targeting an output of 1 million tonnes for the current Iranian year

MCC, HZL Said To Be In Running For Anglo Zinc Business

Bid Expected To Realise $1 Billion

Metallurgical Corporation of China Ltd (MCC) and Hindustan Zinc are said to be in the running for the $1 billion worth of zinc assets put up for sale by miner Anglo American Plc.

MCC has recently begun to expand its overseas mining assets. An anonymous company official told the newspaper China Daily that "We intend to capitalize on the commodity price rally and the Anglo bid is in line with our strategy."

Most of MCC’s mining assets are located overseas. In February 2010 the company paid $200 million for a 5 per cent stake in Australian miner, Resourcehouse Ltd in a deal which saw it agree to buy coal from Resourcehouse and a 10 per cent stake in the China First coal project.

Hindustan Zinc is although thought to be bidding for the assets. The company recently became the world’s largest zinc miner and sources within the business have told the Indian press that the company is working on a bid.

Anglo American's zinc assets include the wholly owned Skorpion and Lisheen mines in Namibia and Ireland and a 74 percent interest in the Black Mountain mine in South Africa.

No Plans To Sell Macarthur Stake - POSCO

Stability of supply is reason for stake

South Korean steelmakers POSCO, has reiterated its desire to hold on to its stake in Australian miner, Macarthur Coal, in the face of a bidding war.

"Ninety-nine percent of our investment purpose in Macarthur is to secure a stable supplier," Kwon Young-tae, POSCO's senior vice president, told Reuters after a conference with analysts.

POSCO will continue to review the proposed merger between Macarthur and Gloucester saying it had made no decision yet on whether to support the deal.

POSCO is one of Macarthur’s three largest shareholders. The Australian miner has rejected bids from America’s Peabody Energy and Australia’s New Hope. Global miner Xstrata has also been rumoured to be preparing a bid.

An archive on the Macarthur takeover battle is available here.

Orissa To Release Mining Policy Plan

5% Royalty Likely To Be Imposed

The government in the Indian state of Orissa government is to release policy guidelines regarding mining in the state.

The policy, which is aimed at developing and regulating the local mining industry, will focus more on the non-ferrous sector and comes at a time when issues such as illegal mining and land acquisition have come to the fore.

Industries to be affected by the guidelines are expected to below volume, high value non-ferrous minerals like gold, nickel, platinum and beach sand, however, the ferrous sector is likely to be affected by guidelines on the profitable use of low grade ores by using state-of-the-art technology in the benefication, sintering and pelletising process.

The state government has decided in principle that a royalty of 5% will be used for the development of people living mining areas. A committee has been formed to formulate the policy for the implementation of this decision.

Orissa has 17% of India’s total mineral reserves with 174 million tonnes of nickel ore, 82 million tonnes of beach sand minerals, 1,802 million tonne of bauxite, 180 million tonnes of chromite, 5,305 million tonne of iron ore and 65,353 million tonne of coal. There are also deposits of cobalt, copper ore, dolomite, lead & zinc ore, limestone, tin ore.

China May Probe Iron Ore Monopoly

Industry or Government May Instigate Investigation

A report in China suggests that the country’s government is likely to investigate suspected monopoly abuse by the world's three iron ore mining giants.

The report, in the Economic Information Daily, cited an unnamed legal expert as saying that the three companies – Vale, Rio Tinto and BHP Billiton – are highly coordinated in the supply, transportation, and pricing of iron ore which, it said indicates a clear monopoly abuse.

The paper quote the legal expert as saying there were two ways to launch an investigation into foreign companies' monopoly. The ‘victim’ firms can file a monopoly case with the government and the government can then start an investigation. But if the monopoly has a negative impact on China's economy, the relevant government departments can initiate the investigation themselves.

Rio, BHP Pilbara Merger May Fail

Rio Shareholders May Demand Bigger Payment

Rio Tinto and BHP Billiton’s planned merger of their iron ore operations in Western Australia’s Pilbara region is likely to collapse unless Rio gets a bigger payment from its partner, a report by Royal Bank of Scotland Group Plc analyst Lyndon Fagan said on Monday.

BHP agreed last year to pay Rio $4.8 billion to equalise ownership of the venture. RBS calculates the payment is now worth $8 billion.

"Rio shareholders will not approve the deal, assuming it makes it through the European Union competition commission, unless a higher payment is negotiated from BHP," Mr Fagan said.

In the event that Rio asks BHP for a higher payment, BHP is likely to weigh up alternatives such as building an outer harbour at Port Headland in Western Australia, he added.

The two companies had planned to combine iron ore operations in Western Australia to save about $10 billion in costs.

Korea, Japan To Oppose Iron Ore Price Hikes

Industries, Government Opposed To Pilbara Merger

South Korea’s government and the country’s steelmakers will hold talks in Tokyo with their Japanese counterparts about the sharp rise in iron ore prices.
The Korea Iron & Steel Association, whose members include Posco and Hyundai Steel Co., will hold talks in Tokyo with its Japanese counterpart to form a consensus, South Korea’s Ministry of Knowledge Economy said today.

The ministry said officials and executives at the joint government-private sector gathering concurred that the 90 percent on-year hikes in iron ore and 55 percent gains in bituminous coal prices will increase steel product prices, which will then cause price rises in other industries.

A joint press release said that "a rise in steel prices will adversely affect autos, shipbuilding and industrial plant sectors that can hurt consumers and overall sales," adding that companies in both South Korea and Japan have agreed to work together to follow price increases being pursued by global miners Vale, Rio Tinto and BHP Billiton. The groups are also concerned about a move to shorter-term contracts.

Chinese and European steelmakers have also made it clear that they oppose the rise in prices.

The bi-lateral talks are part of an annual gathering between the two groups and the countries’ governments. Talk will also focus on cooperation against plans to combine BHP and Rio Tinto’s plans to combine iron-ore assets in Australia claiming that the venture may hinder competition.

Lee Seung-woo, head of the Ministry of Knowledge Economy's steel and chemical industry division, represented South Korea at the meeting, while the Japanese delegation was headed by Masaki Koito, head of steel industry division at the Ministry of International Trade and Industry.

Executives from the Nippon Steel Corporation and the Iron and Steel Institute of Japan also attended the meeting.

Chinese Coal Ship Refloated

Reef Could Take 20 Years To Recover

The Chinese coal carrier, the Shen Neng 1, which ran aground on the Great Barrier Reef off the coast of Queensland, has been refloated and is now lying in safe waters off Great Keppel Island.

However, Australian scientists say that the ship caused miles of damage to the Reef and it could take 20 years for the reef to recover.
The Shen Neng 1 ran aground 10 days previously, on a journey taking Australian coal to China.

Great Barrier Reef Marine Park Authority (GBRMPA) chief scientist David Wachenfeld says the damage is worse than expected and stretches for three kilometres.

"This is by far the largest ship grounding scar we have seen on the Great Barrier Reef to date," he told ABC.

"This vessel did not make an impact in one place and rest there and then was pulled off.

"This scar is more in the region of 3km long and up to 250 metres wide."

Marine park authority chairman Russell Reichelt said toxic paint from the hull of the coal carrier was killing coral around Douglas Shoal, where the ship ran aground. He added that it would be some weeks before the full extent of the damage was known but said that paint that had been scrapped off onto the Reef is killing coral in the vicinity.

"I'm a multiple-use marine park advocate but I do think we have claimed in the past that we've got the best shipping protection in the world," he said.
"If the best isn't good enough - we're still having groundings - we have to do better."

A white plume that had been photographed around the coral was evidence that the ship’s hull was crushing coral as it moved with the wind and the swell of the sea.
Australian environment minister Peter Garrett has asked the marine park authority for a thorough review of the site.

Nyrstar Makes Fresh Offer For CBH Resources

New Offer At 19.5c a share

Belgium’s Nyrstar, the world’s largest zinc miner, has made an offer of 19.5c a share for Australian zinc miner, CBH Resources. Nyrstar has also offered $1000 per CBH convertible loan note.

CBH had previously recommended a joint venture deal and bid for part of the company from its largest shareholder Japan's Toho Zinc.

The Nyrstar proposal is subject to limited due diligence, which has now commenced, and on shareholders not approving the Toho deal at a meeting on April 28.

Last month CBH recommended shareholders accept a proposal to sell stock and bonds to Toho over a previous Nyrstar bid worth A$213 million.

CBH shares ended the day at 18.5c.

Coal India Nearing Peabody Mines Deal

$1 Billion Deal Being Finalised

Coal India Limited is nearing a $US1 billion deal with US miner Peabody Energy that will give CIL a stake in four Australian coalmines, along with other international assets.

Speaking to the Sydney Morning Herald, Phalguni Guha, chief general manager of Coal India's foreign-venture arm, Coal Videsh, said that the deal could include thermal coal and metallurgical coal assets in the United States and Indonesia as well as Australia.

Coal India has appointed DSP Merrill Lynch to assist with finalising the deal structure.

Denham Takes Stake In NZ Iron Ore Operation

Stake Will Enable TTR To Advance Offshore Mining Plan

US-based private equity firm Denham Capital Management has taken a stake in company Trans-Tasman Resources (TTR), which is mining offshore for iron ore from the west coast of New Zealand’s North Island.

TTR holds a prospecting permit covering 6319km of seabed in two offshore areas off the New Zealand coast. Initital prospecting work has found what the company describes as a “very large and low costs” iron ore resource.

Funds from the sale of shares to Denham will enable TTR to advance its plan to set up an offshore dredge mining operation combined with an offshore beneficiation plant located on a fixed rig. Ironsand would be dredged from the seabed, processed in the beneficiation plant, then slurried either to a vessel for shipment to Asia, or to a dedicated local onshore steel mill.

Denham director and head of metals and mining Bert Koth said TTR was in an outstanding position to help meet an expected global shortage of iron ore.

"Its operating and capital costs will be a fraction of those for land-based mining and its transport logistics suffer none of the constraints and costs faced by many, if not most, other iron ore projects."

TTR managing director Paul Berend said the partnership with Denham would enable TTR to fast track the development of its project without the costs and distractions associated with an early initial public offering (IPO).

Queensland Rail To Transport Karara Iron Ore

Ten Year Deal To Freight Ore To Geraldton

Queensland Rail is to transport iron ore from Western Australian miner Gindalbie Metals's $1.8 billion Karara project to Geraldton port.

The rail operator, which moved into Western Australia in 2006, will announce on Monday that it has signed a heads of agreement with Gindalbie for a 10-year deal for 8 million tonnes of concentrate and 3 million tonnes a year of direct shipping ore with an option to take the whole of the 30 million tonnes a year that Gindalbie expects to produce at Karara.

The Karara project is a joint venture between Gindalbie and the Chinese steelmakers Ansteel. The first iron ore is expected to be produced next year.

"This is potentially one of the largest individual long-term contracts which will be awarded for the Karara Project, with a value of several hundreds of million dollars over the initial 10-year period," Gindalbie managing director Garret Dixon said.

Queensland Rail is expected to be privatised later this year.

New Delhi Police Yet To Trace Origin Of Cobalt-60

Police Waiting To Question Shop Owner

Police in New Delhi have yet to trace the origin of Cobalt-60, the radioactive material that caused serious injuries to six persons in a scrap market in the city on Friday.

"There is nothing concrete. We are waiting for Deepak Jain to regain his health. We are also waiting for reports from Atomic Energy Regulatory Board (AERB) and other agencies," Deputy Commissioner of Police (West) Sharad Aggarwal told a news agency that officers were waiting for shop owner Deepak Jain to regain his health before questioning him as to the origin of the cobalt..

Mr Aggarwal said that nobody knew Mr Jain had bought the cobalt. "Normally, scrap dealers never makes public their source of scrap as it will affect their business. So, nobody knows from where he bought it," he said.

AERB experts safely removed eight bunches of metal scraps containing sources of the Cobalt-60 radioactive isotope from Mr Jain’s shop and transported the material to the Narora Atomic Power Station in Uttar Pradesh.

"Investigations are now in progress to ascertain the source of the radioactive cobalt-60, which was recovered from the scrap in a shop in Mayapuri," S A Hussain, Head of Radiological Safety division of AERB, said.

Mr Jain is fighting for his life at the Apollo Hospital while five others -- Gaurav, Rajendra Prasad, Ramjee Yadav, Ram Kalap and Himanshu Jain -- have been admitted to the AIIMS where all are being kept in an isolation ward.

Radioactive Material Found In New Delhi Scrap Market

Material Thought To Be Cobalt-60

Scientists in India are probing the presence of a radioactive material at a New Delhi scrap market.

The material, which was discovered on Thursday night, has caused injuries to five people with two in a critical condition in a local hospital.

Police cordoned off the Mayapuri scrap market in the city and sealed all nearby shops while nuclear scientists from the Bhabha Atomic Research Centre (BARC) and the Narora Atomic Power Plant in Bulandshahr were involved in an operation to identify the source of the radioactive material.

"The experts have identified the material as Cobalt-60. They have also identified six sources of the material from the scrap market," National Disaster Management Authority member and former BARC director B B Bhattacharya said. “Cobalt-60 is used in fabrication work, especially for welding steel. It is also used in radiotherapy for treating cancer.”

However, Cobalt-60 is also one of the nine materials suitable for radiological use for making a so-called ‘dirty bomb’. The metal, along with Caesium-137 surpasses uranium and thorium for its radioactive strength.

The presence of the nuclear material – and in such a public place - has caused fear within India’s security establishment with Prime Minister P Chidamabram being been briefed about the incident.

Experts say while a nuclear weapon obtains its explosive power from nuclear fission, a dirty bomb involves no nuclear fission, and is used like a conventional weapon.

Local scrap dealers said the owner of the shop, Deepak Jain, and his employees Ram Ji Yadav, Ram Kalk Yadav, Gaurav and Rajender Prasad, fell unconscious while they were cutting metal and a white fluid oozed out causing severe burns. Mr Jain had brought the scrap from Faridabad, through Mr Prasad, on 12 March. Mr Prasad first tried to cut open the waste but this led to the withering away of his fingernails. Mr Jain then put the material away but by 25 March he began to have headaches, his hair began to fall out and his skin started to show signs of decay. After consulting a doctor his skin began to turn black and he was admitted into New Delhi’s Apollo Hospital on 4 April. The radiation safety officer at Apollo informed India’s Atomic Energy Regulatory Board (AERB) the next day and two officials were subsequently sent to Khajan Basti at the Mayapuri scrap market.

Doctors say that Mr Jain's bone marrow is significantly suppressed and his condition is quite serious. The condition of the four labourers has also been deteriorating since Friday afternoon and they have been shifted from the city’s Deen Dayal Upadhyay Hospital to the All India Institute of Medical Sciences. Another trader, Himanshu Jain, is also at AIIMS.

Meanwhile local police are trying to find out if the material originated from abroad.