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