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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 $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Tuesday, 21 December 10
CIL TOLD TO SCOUT MINES ABROAD TO BRIDGE COAL DEFICIT - ECONOMIC TIMES
Economic Times reported that, The government asked state-owned CIL to look for acquiring assets abroad to meet the domestic shortfall of coal.
&q ...
Tuesday, 21 December 10
SHIPPING INDUSTRY RECOVERING, BUT STILL HAMPERED BY OVERSUPPLY OF VESSELS AND DEPRESSED FREIGHT RATES - UNCTAD / HELLENIC SHIPPING
International seaborne trade contracted by 4.5 per cent in 2009, reports UNCTAD´s Review of Maritime Transport 2010 . That decline put seaborn ...
Sunday, 19 December 10
SPOT SUPRAMAX VESSELS WERE FIXED AROUND US$ 13,000 PER DAY FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The freight market continued to be soft with the BDI down by 96 points and closed at 1,999 points, touching below 2,000 points on Fri ...
Friday, 17 December 10
THE PANAMAX MARKET HAS EXPERIENCED A SOFTER TENDENCY THIS WEEK - FEARNBULK
Handy
Monotonous Atlantic markets with little fresh enquiry in Black Sea/Med/Continent. Large Supras are achieving usd 21/22k for TA rounds - 2/3 ...
Friday, 17 December 10
NALCO SHORTLISTS COAL FIRMS FOR INDONESIA PROJECT - BUSINESS-STANDARD
Business-Standard reported that, State-owned NALCO today said it has shortlisted two firms for supply of coal for its Rs 18,000-crore (US$ 3,953,003 ...
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- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Australian Coal Association
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- White Energy Company Limited
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
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