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Wednesday, 13 May 09
ALPHA TO BUY RIVAL, CREATING NEW US COAL HEAVYWEIGHT - MININGWEEKLY.COM
 Alpha Natural Resources, the biggest supplier of metallurgical coal in the US, has agreed to buy Maryland-based rival Foundation Coal for about $1,4-billion in shares, creating what will be the nation's third-biggest coal miner.
The merged company will be better able to weather the short term challenges facing coal producers, as well as to take advantage of an anticipated rebound in demand and prices for coal, said Alpha CEO Michael Quillen.
He has been looking for opportunities to grow by merger or acquisition since bulk-commodities miner Cleveland Cliffs (now Cliffs Natural Resources) broke off plans in November to buy Alpha, because of market uncertainty and opposition from a key Cliffs shareholder.
“This is really the sort of transformational event that Alpha's been talking about for some time now, and we believe that this is also the right time to do it,” Quillen said on Tuesday.
Besides assets in Central and Northern Appalachia, Foundation produces coal from surface mines in the Powder River Basin, in Wyoming, which are not only less expensive to operate, but are also not facing the same regulatory challenges as the Appalachian region, where Alpha has all its assets.
While surface mines in the Eastern US are coming under increased environmental scrutiny and regulatory challenges, operations in Wyoming do not face the same degree of opposition.
The Foundation acquisition “does actually spread out the risk,” Quillen said.
Foundation also produces mainly thermal coal, for power generation, which help diversify Alpha's metallurgical-coal-heavy production mix.
The combined company, which will be 59% owned by current Alpha shareholders and 41% by Foundation, will operate 59 coal mines and 14 preparation plants, and will own more than 2,3-billion tons of coal reserves.
"We're creating a true US leader in the energy sector with balance, size and scale,” Quillen said.
The firms also expect to achieve at least $45-million a year in savings, as a result of synergies, beginning in 2010.
US coal producers, including the two largest – Peabody Energy and Arch Coal – have reduced production levels and sales forecasts for this year, after sales volumes fell sharply because of weak demand for both steel and electricity.
Alpha and Foundation have both also curtailed operations, and Foundation CEO James Roberts indicated last week that the company was expecting some utilities to defer contracted shipments this year.
However, speaking on a conference call on Tuesday, he said that demand for steel and electricity are expected to rebound in 2010 and beyond.
“And when the economy recovers, supply [of coal] will struggle to keep up with demand, so prices will recover,” Roberts said.
Foundation shares leapt 20,74% on Tuesday, to $28,06 apiece by 16:01 in New York. The stock traded as high as $31,54 earlier in the day.
Alpha stock slid 6,24%, to $27,06 a share.
Analysts generally welcomed the deal, with
STRUCTURED TO GROW
Once the Foundation transaction has closed, which is expected to be in the second half of the year, and the businesses are properly integrated, Alpha is keen to take advantage of further acquisition opportunities, Quillen said.
“The way we've structured this balance sheet is to continue to grow, and to take advantage of opportunities – whether they are distressed or whether they are just in different geographic basins,” he said.
“We are still going to be around in the M&A environment going forward.”
After the tie-up, the new company will have about $750 million in cash, cash equivalents and undrawn credit.
Under the terms of a definitive merger agreement, Foundation shareholders will receive 1,084 shares of the new company for each Foundation share held, while Alpha shares will automatically become shares of the combined company.
Alpha Natural will issue about 50-million new shares, and will assume $530-million of Foundation's net debt, for a total transaction value of around $2-billion.
The deal values Foundation stock at $32,73 a share, which was a 37% premium to the company's average closing share price over five days prior to the deal being signed.
The deal requires approval from shareholders representing a majority of the outstanding shares in each company.
Quillen said he was confident of shareholder support for the deal, and did not expect to encounter the sort of difficulties that scuppered the Cliffs transaction.
The new company will retain the Alpha name and will be headquartered in Abingdon, Virginia.
Quillen will be appointed chairperson and Alpha president Kevin Crutchfield will be CEO, while Kurt Kost, Foundation's president and COO, will become president of the combined company.
Source: http://www.miningweekly.com/article/alpha-natural-will-buy-foundation-for-2bn-creating-new-us-coal-giant-2009-05-12
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Friday, 22 May 09
CHURCHILL DOUBLES INDONESIAN COAL PROJECT RESOURCE ESTIMATE - STEEL GURU
Mining Weekly quoted Churchill Mining as saying that the resource at its East Kutai coal project in Indonesia has more than doubled to 3.18 billion ...
Friday, 22 May 09
INDONESIA`S BUKIT ASAM TO HAVE POWER PLANT IN 2011 - ANTARA
The construction of a power plant in South Sumatra by coal mining company PT Tambang Batubara Bukit Asam will be completed in April 2011.
T ...
Friday, 22 May 09
NOBLE WINS CONTROL OF AUSTRALIA'S GLOUCESTER COAL - BLOOMBERG
Noble Group Ltd., a Hong Kong- based commodity supplier, won control of Australia’s Gloucester Coal Ltd. after last week raising its cash bid ...
Thursday, 21 May 09
FBR STARTS COVERAGE OF SHIPPING SECTOR - REUTERS
Friedman Billings Ramsey began coverage of the shipping industry, saying the sector, which is amidst a deep cyclical downturn, is poised for a recov ...
Thursday, 21 May 09
INDONESIAN COAL PRODUCTION IN Q1 BELOW TARGET - STEEL GURU
Mr Bambang Gatot Ariyono director for coal and mineral development at the Energy and Mineral Resources Ministry said that the coal production in the ...
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- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- McConnell Dowell - Australia
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Planning Commission, India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
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