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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, 22 December 10
PEABODY ENERGY TO SOURCE INDONESIAN COAL FROM PT SUPRA BARA ENERGI (SBE) - COAL GEOLOGY
Coal Geology reported that, Peabody Energy has entered into an agreement to source coal from PT Supra Bara Energi (SBE), which will be sold on the e ...
Wednesday, 22 December 10
INDONESIAN COAL LOAD PORT WEATHER CONDITION AND DELAYS
COALspot.com - The several leading shipping agents in Indonesia, said due to rainy season in Indonesia, loading activities in coal loading ports hav ...
Wednesday, 22 December 10
COAL INDIA CLOSE TO BUYING 15% STAKE IN AUSTRALIAN MINE - ECONOMIC TIMES
Economic Times reported that, Coal India (CIL) is close to buying a stake between 10% to 15% in an Australian mine owned by Peabody, a US company.
...
Wednesday, 22 December 10
CAPESIZE FUTURES MARKET RATES ARE EXPECTED TO CONTINUE THEIR DRIFT DOWN IN 2011 - BRS
Nearly two months of weekly declines in the Baltic Capesize Index were finally halted last week with a small 1% increase Friday-to-Friday. The impro ...
Wednesday, 22 December 10
DRY BULK MARKET LOOKING FOR DIRECTION AMID HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry&rs ...
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- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Planning Commission, India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- MS Steel International - UAE
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
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