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