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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, 15 December 10
SMALLER DRY BULK VESSELS ARE LOOKING UP, LARGER ONES FAIL TO DELIVER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market lost further ground at the beginning of the week, in what could prove one of the slowest periods ship owners have been faced. Ye ...
Tuesday, 14 December 10
COAL IMPORTS MAY INCREASE 78% TO CHINA, INDIA: ENERGY MARKETS - BUSINESS WEEK
Business Week reported that, China and India may increase imports of coal by 78 percent to 337 million metric tons next year, further driving up pri ...
Tuesday, 14 December 10
BANPU PLANNING PRODUCTION BOOM - BANGKOK POST
Australian, Indonesian output to lead growth
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, wants to nearly double its coal ...
Tuesday, 14 December 10
THE FREIGHT RATES FROM INDONESIA TO INDIA AND CHINA REMAINED FIRM - CAPT. REDDY
COALspot.com - The freight market continued to be soft with the Cape sector most effected which was down by 289 points and closed at 2,694 poi ...
Monday, 13 December 10
ICE FUTURES EUROPE TO LAUNCH IHS MCCLOSKEY INDONESIAN SUB-BITUMINOUS FOB MARKER COAL CONTRACTS - MONDOVISIONE
Mondovisione reported that, IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over ...
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- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
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