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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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Saturday, 08 January 11
DIFFICULT YEAR FOR SHIPPING - TRANSPORT WEEKLY
Transport Weekly reported that, Shipping Corporation of India (SCI) chairman Sabyasachi Hajara says 2011 will be a difficult year because an excess ...
Saturday, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
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- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- PTC India Limited - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
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