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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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Wednesday, 13 May 09
COAL SUPPLY MAY BE VASTLY OVERESTIMATED - ABC SCIENCE
The world's coal supply suggests reserves may be vastly overestimated and we could be facing an unprecedented global energy crisis, according to a ...
Wednesday, 13 May 09
INDONESIA ADARO NET PROFIT, REVENUE TO RISE IN 2009 - REUTERS
INDONESIA's largest coal producer by market value, PT Adaro Energy Tbk, expects double-digit growth in revenue and net profit this year, an officia ...
Tuesday, 12 May 09
CHINA MINERS CUT COAL PRICE OFFER TO JAPAN UTILITIES - ALIBABA.COM
* Producers cut offer to $75.50 a tonne from over $80
* Negotiations may conclude soon as price gap narrows
* New offer at discount of about 43 pe ...
Tuesday, 12 May 09
INDO TAMBANGRAYA SEES 2010 COAL OUTPUT UP 25 PCT - REUTERS
Indonesian coal miner, PT Indo Tambangraya Megah (ITMG.JK), expects coal output to increase by up to 25 percent next year as production kicks in at ...
Tuesday, 12 May 09
INDIKA EXPECTS TO INCREASE COAL PRODUCTION BY 12.68% IN 2010 - THE JAKARTA POST
Energy and infrastructure company PT Indika Energy, the parent company of Indonesia's third largest coal producer PT Kideco Jaya Agung, expects its ...
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- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- The University of Queensland
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Independent Power Producers Association of India
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