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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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Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Australian Coal Association
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
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