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