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Wednesday, June 9, 2010.

From Creamer Media in Johannesburg, I'm Eleanor Seggie.

Making headlines this week:

The global steel industry has returned to a solid growth footing in 2010, following the sharp contractions of 2008 and 2009. But the rising cost of key inputs, such as iron-ore and coal, have been outpacing the more modest recovery in steel prices. A new report by KPMG International's Global Metals Practice says that this is placing pressure on profit margins.

Steel prices have seen a gradual turnaround since the middle of 2009, when the World Steel Association's global composite steel price was recorded at below 600-dollars a ton.

Prices, which had increased to well above 600-rand a ton by February 2010, are also expected to continue to rise.

In the context of a recovering global economy, increased demand and a more productive steel industry, KPMG believes that merger and acquisition activity will also increase.

The RMB/BER Business Confidence index, or BCI, fell by seven points to a level of 36 in the second quarter, having surged to 43 points during the first quarter of 2010. However, the compilers stressed that it would be wrong to interpret the decline in confidence as indicative of a prospective slump in real output, despite the fact that the recovery wasn't yet deeply grounded.

They acknowledged, however, that South Africa's economic growth, which accelerated by 4,6% during the first quarter of 2010, was unlikely to be sustained at that rate on an annualised basis.

The fall follows the publication of a 2,2 point decline in the May BCI released by the South African Chamber of Commerce and Industry on June 3, in which respondents indicated that the outlook had been tainted by recent industrial-relations activity.

South African diversified miner Exxaro says that it plans to develop clean energy power projects with total capacity of 350 MW with the first project expected to come on stream in mid-2012.

Exxaro manager for energy growth Thomas Garner said the capacity for the projects, which are expected to use solar, wind, gas and clean coal to generate electricity, could rise once additional projects, including one it plans in Botswana, are developed.

Garner said Exxaro was also planning to develop two wind projects, one on the west coast and another one inland South Africa, which could bring an extra 200 MW.

Garner said Exxaro was in talks with mining companies, smelter owners and other industry players to tap their waste heat or gas to generate electricity as it seeks to become a major regional power producer.

Also making headlines:

Gautrain's first day delivers 96,7% punctuality and 11 000 passengers.
Greening initiatives are launched to offset World Cup carbon emissions.
South Africa is confident that its transport infrastructure will meet the World Cup needs.
And, Public Enterprises Minister Barbara Hogan had nothing to do with Jacob Maroga's sacking as CEO of Eskom.

That's a round up of news making headlines this week.

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