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