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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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- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Minerals Council of Australia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
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