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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, 24 December 10
DRY BULK OWNERS COULD SOON RECONSIDER SCRAPPING OLDER VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market close to its lowest levels in months and indeed close to 2010 lows, ship owners could be heading towards scrapyards in a bi ...
Thursday, 23 December 10
SOUTHGOBI RESOURCES CLOSES STRATEGIC INVESTMENT IN ASPIRE MINING LIMITED
Press Release – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878), announced today that it has completed the private placement with Aspire Mining ...
Thursday, 23 December 10
CESC EYES COAL MINES IN INDONESIA, S AFRICA - TEHELKA
Company has already set a target of adding 6,000 MW power generation by the end of the 12th Plan in 2017
Tehelka reported that, CESC Ltd, the fla ...
Thursday, 23 December 10
SANTA CLAUSE DID NOT COME EARLY THIS YEAR - FEARNBULK
Handy
Not much fresh enquiry this week and quite dead in Bl.Sea/Med. Nevertheless ...
Thursday, 23 December 10
STERLITE ENERGY LIMITED TO BUY 0.6 MLN MT OF COAL FOR 2011
COALspot.com - Sterlite Energy Limited (SEL) is a part of Vedanta Resources plc , a London listed FTSE 100 diversified metals and mining major with ...
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- The University of Queensland
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- Energy Development Corp, Philippines
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- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Romanian Commodities Exchange
- Australian Coal Association
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
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- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
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- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
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- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
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- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
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- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
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- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
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- GAC Shipping (India) Pvt Ltd
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- Australian Commodity Traders Exchange
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- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
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- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Minerals Council of Australia
- Indian Oil Corporation Limited
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
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