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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, 02 December 10
INDIA'S COAL SHORTAGE TO DEEPEN NEXT YEAR - MONEY CONTROL
Money Control reported that, India's coal deficit will deepen sharply next year, its coal minister said on Tuesday, forcing Asia's third largest e ...
Thursday, 02 December 10
CIL INCHES CLOSER TO PEABODY STAKE DEAL - THE TELEGRAPH INDIA
The Telegraph India reported that, state-run Coal India Ltd (CIL) hopes to complete negotiations to buy over 10 per cent in Australian miner Peabody ...
Thursday, 02 December 10
DRY BULK MARKET WEIGHED DOWN BY CAPESIZE BLUES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The negative sentiment currently undergoing in the capesize market has kept the dry bulk market’s benchmark, the Baltic Dry Index (BDI) on the ...
Monday, 29 November 10
NUCLEAR SUPERTANKERS TO SHAKE UP SHIPPING - THIS IS MONEY
This is money reported that, plans are under way that could see nuclear-powered supertankers sailing the world’s shipping lanes, refuelling on ...
Sunday, 28 November 10
FREIGHT MARKET SEEMS TO BE NERVOUS - VISTAAR
COALspot.com - The freight market continued to remain uncertain even though only cape index was down by 8.31 pct.
Overall the market seems to be ...
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- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Australian Coal Association
- GMR Energy Limited - India
- CNBM International Corporation - China
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- White Energy Company Limited
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
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