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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, 08 May 09
INDONESIAN STATE AUDIT BOARD COULD ONLY REACHED A SMALL NUMBER OF KP AND PKP2B - MAJALAHTAMBANG
THE LACK of personnel and the very limited time period have been the reasons why the 2nd semester of the special purpose audit for coal mining ...
Friday, 08 May 09
B.C.'S MINING INDUSTRY HIGH COAL PRICES TO RECORD 2008 PROFITS - PAGUNTAKA
AGGREGATE pre-tax earnings rose to $3.2 billion, the highest amount in the 41-year history of a PricewaterhouseCoppers survey.
B.C.’s minin ...
Thursday, 07 May 09
ASIA COAL-PRICES EASE TO NEAR $63 ON DEMAND CONCERNS - REUTERS
AUSTRALIAN thermal coal prices, a benchmark for Asia, edged lower to around $63 a tonne on concerns over demand, after hitting a two-week high of $6 ...
Thursday, 07 May 09
RICHARDS BAY COAL SHIPMENTS FALL MOST IN 9 MONTHS - BLOOMBERG
RICHARDS BAY Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments fell 24 percent last month, the biggest drop in nine mo ...
Tuesday, 05 May 09
NEWCASTLE PORT'S WEEKLY COAL EXPORTS INCREASE - BLOOMBERG
COAL shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 18 percent last week while the numb ...
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- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
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