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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, 31 December 10
STC TO FINALIZE 12 MILLION MT OF COAL IMPORT CONTRACT TO TWO INDIAN AND A DUBAI BASED COAL TRADER - SOURCES
COALspot.com - World's single largest coal import tender floated by STC on behalf of state utility NTPC to finalize its suppliers or already finali ...
Thursday, 30 December 10
DRY BULK MARKET STAYS SUBDUED AT THE END OF 2010 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dy bulk market failed to cheer ship owners across the board as the year draws to an end, thus bringing mixed feelings ahead of 2011. On one hand ...
Thursday, 30 December 10
KANGAROO RESOURCES BUYS INDONESIAN COAL COMPANY
Australian-listed Kangaroo Resources Ltd. said Wednesday it will buy 99% of the Pakar thermal coal project in East Kalimantan, for A$277 million thr ...
Wednesday, 29 December 10
WEATHER IMPACTS RIO TINTO COAL AUSTRALIAS QUEENSLAND OPERATIONS
Press Release - As a result of severe monsoonal rain in central and northern Queensland, force majeure has been declared on coal sales contracts fro ...
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while ...
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- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- White Energy Company Limited
- VISA Power Limited - India
- MS Steel International - UAE
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
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