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Tuesday, 21 December 10
CHINA COAL CAP TO BOOST GLOBAL M&A - FINANCIER WORLD WIDE
 Financier World Wide reported that, Chinese state-run media has reported that the Central Government intends to cap domestic coal production for fear of exhausting reserves and failing to meet the needs of the fast expanding economy. At the same time, the National Energy Administration director, Zhang Guobao, has encouraged Chinese mining enterprises to pursue mergers and acquisitions at home and abroad in order to consolidate and modernise the disjointed mining industry and to increase coal imports. The news comes at a time when the global mining sector is witness to record annual M&A transactions. According to Dealogic, over $47.1bn has changed hands in 2010, through 968 deals. China was the target of a record $11.6bn of these deals.
Imports and exports
China’s love affair with coal began amidst the industrialisation of the 1950s, and the country has depended heavily on the fossil fuel ever since. Ninety-seven percent of China’s coal is consumed in power generation, industry, coking, and residential use and heating.
Of these, power supply needs dominate. According to the US Geological Survey (USGS), two-thirds of Chinese electricity generation is from coal-fired plants and power generation accounts for half of China’s coal use.
The pace of Chinese industrial growth saw the country move from being a net exporter of 1.8 million tonnes in 2008, to a net importer of 103 million tonnes in 2009. It is the second largest user of coal next to the US, accounting for 41 percent of the world’s total consumption, and is by far the world’s largest producer of the fuel. Despite this, China’s domestic mining industry is challenged by lack of centralisation, inefficiency and overburdened transport links. Frequent industrial accidents and environmental issues are also major problems.
Domestic and outbound deals
To modernise its mining industry the Chinese government aims to shut down a large proportion of its 11,000 small coal mines while encouraging state owned and private coal mine enterprises to initiate mergers and acquisitions.
Yanzhou Coal Mining Co. recently revealed plans to buy a 51 percent stake in the Inner Mongolia-based Haosheng Coal Mining Ltd. for $980m, and Aluminum Corporation of China will invest $80.5m to establish Shanxi Xiuxin Gugou Coal (Group), merging the assets of five coal companies. The newly established group will have coking coal reserves of 300 million tons which are expected to last up to 75 years.
The government also aims to secure imports through a program of cross-border M&A. In the three years to September 2010, Chinese companies spent $20.96bn on overseas coal industry acquisitions, and activity has continued since the government’s announcement. Australia has been a particularly prized target for Chinese firms of late.
Yanzhou bought Australia’s Felix Resources Ltd. for $2.9bn in August 2009 and has actively been scanning the market for additional acquisitions, particularly coking and thermal coal operations. In November 2010 China Coal Geology Engineering Corp and Wanbei Coal-Electricity Group partnered to explore and develop coal resources in Queensland. They expect to uncover 10 billion tonnes of reserves. November also saw Australia’s Caledon Resources agree to be bought by the Chinese state-owned investment group Guangdong Rising Assets Management Co for £252m.
Global interest
Companies around the world have caught wind of China’s resource fears, and are scrambling to meet the demand. On 16 November, Nat Rothchild’s Vallar paid $3bn for 25 percent of Indonesian coal producer PT Bumi Resources and 75 percent of PT Berau Coal Energy. Just days later, the US coal miner Walter Energy bid $3.2bn for Canada’s Western Coal, with the intention of supplying the Chinese market.
Plenty of others are cashing in too. Caterpillar has spent $8.6bn buying US-based Bucyrus, a manufacturer of excavators used in opencast coal mines. The firm has said the coal industry is one of the principal growth markets that they are now targeting.
Australia has remained a prime target for foreign companies seeking to benefit from growing prices and sales to Asia. 2010 saw $6.7bn of coal acquisitions in the country, compared to $5.9bn for the whole of 2009.
The US is also becoming a major playing field for coal industry M&A deals, due in part to the relatively low price of its thermal coal. Privately held, Alabama-based Drummond and Co. is taking bids for its mines in North Columbia, expecting to fetch up to $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Thursday, 20 January 11
DRY BULK MARKETS FALL SEES NO END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Pundits indicating that the dry bulk market’s sentiment remains weak were justified, as the industry’s benchmark, the Baltic Dry Index ( ...
Wednesday, 19 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Tuesday, 18 January 11
MINISTRY SEEKS COAL FROM INDONESIA - SUNDAY OBSERVER
Sunday Observer reported that, Ministry of Power and Energy is to explore the possibilities of importing quality coal from Indonesia.
Minister Pa ...
Tuesday, 18 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Sunday, 16 January 11
STANCHART GLOBAL RESEARCH SEES COAL PRICE RISING ON SUPPLY DISRUPTION - BURSA MALAYSIA MARKET NEWS
Bursa Malaysia Market News reported that, Standard Chartered Global Research has upgraded its 2011 forecasts for global thermal coal prices based on ...
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- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
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