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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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Saturday, 02 May 09
COAL PRICES TO RISE ON CHINESE SUPPLY, INDIAN DEMAND, UBS SAYS
Peter Hickson, an analyst with UBS AG in London, comments on prices for thermal coal, burned to generate power. He commented in a report today.
& ...
Friday, 01 May 09
DEUTSCHE, BECKKETT CLAIMING ADARO WIN - THE JAKARTA GLOBE
Both Deutsche Bank AG and Beckkett, an investment firm controlled by Indonesian tycoon Sukanto Tanoto, claimed victory on Tuesday after Singapore&rs ...
Thursday, 30 April 09
SAN MIGUEL IN TALKS TO BUY STAKE IN ADARO - REUTERS
San Miguel Corp is in talks to buy a stake worth about $500 million in Adaro Energy , Indonesia's largest coal producer by market value, the Philip ...
Wednesday, 29 April 09
BAYAN READY TO OPERATE WORLD'S LARGEST COAL QUALITY IMPROVEMENT FACILITY - MAJALAH TAMBANG
PT. Bayan Resources Tbk. (hereinafter referred to as Bayan), an Indonesian coal manufacturer, announced that they are ready to operate the world's ...
Wednesday, 29 April 09
NEW GOV'T REGULATION SHOULD INCORPORATE CONFLICT SETTLEMENT BODY - ICMA (MAJALAH TAMBANG)
A draft government regulation on mineral and coal is currently in a process of completion. The Indonesian Coal Mining Association (ICMA) proposed th ...
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- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Interocean Group of Companies - India
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
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