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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 $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Thursday, 09 December 10
DRY BULK MARKET LOOKING FOR DIRECTION THIS WEEK, AS CAPESIZE SHIPS END THEIR MISFORTUNES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk has began the week on a positive note capitalizing on the positive sentiment which finally prevailed during the last days of the previo ...
Monday, 06 December 10
NTPC MAY OPT FOR INDONESIA OVER AFRICA, OZ FOR COAL MINES
Country's largest power producer NTPC, which is scouting for coal properties abroad to fuel its power plants back home, may zero in on Indonesia fo ...
Saturday, 04 December 10
INDONESIA TO INDIA AND CHINA SEA FREIGHT UP BY ABOUT US$ 2.50 PMT - CAPT. REDDY
COALspot.com - The freight market even though remained weak, but towards end of the week the market seemed to firm up.
The BDI was almost at sam ...
Saturday, 04 December 10
OFF WEST COAST OF INDIA TONNAGE IS SEEMINGLY QUITE SPARSE - FEARNBULK
Handy
The Atlantic markets are weak and remained unusually calm after the Thanksgiving ...
Friday, 03 December 10
INDONESIAN LOW RANK COAL IS ATTRACTING COAL BUYERS FROM INDIA AND CHINA
COALspot.com - Bhakti Energi Persada has sold out its whole coal production until the end of 2011, Jeffry Mulyono said during McCloskey Asia P ...
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- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
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