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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 $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Monday, 13 December 10
NALCO TO START WORK ON RS 18K CR ($ 4,010,695,091) INDONESIAN PROJECT BY JUNE - MSN
MSN reported that, State-owned NALCO today said it has selected UAE-based RAK Minerals as JV partner for its Rs 18,000 crore (US$ 4,010,695,091 ...
Monday, 13 December 10
DEUTSCHE BANK RAISES COAL FORECASTS ON MARKET SHORTAGE - BLOOMBERG
Deutsche Bank AG raised price forecasts for thermal coal by as much as 17 percent on expectations that a shortage of the fuel will widen over the ne ...
Monday, 13 December 10
K SERA SERA TO SPEND RS325CR TO BUY COAL,OIL & GAS FIRMS STAKE - LIVE MINT
The company might have to dole out around Rs 225 crore (US$ 50,122,522) for picking up the majority stake in the coal mine in Indonesia and around R ...
Thursday, 09 December 10
OVERSUPPLY OF SHIPS BOUND TO KEEP DRY BULK FREIGHT RATES SUBDUED DURING 2011 SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
An oversupply of vessels is expected to keep freight rates from flying as high as in recent years said a relative shipping report from BIMCO’s ...
Thursday, 09 December 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 103.41 PMT FOR DECEMBER DELIVERY
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
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- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- VISA Power Limited - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- The University of Queensland
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
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