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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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Wednesday, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
Wednesday, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
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- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- White Energy Company Limited
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Petron Corporation, Philippines
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