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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 $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Thursday, 13 January 11
DRY BULK RATES HIT NEW MULTI-MONTH LOWS ON AUSTRALIAS FLOODS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Floods in Australia’s Queensland has seriously disrupted coal shipments and together with a flood of vessels has pushed freight rates for dry ...
Wednesday, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
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- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Independent Power Producers Association of India
- The University of Queensland
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Deloitte Consulting - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
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