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