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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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Saturday, 20 November 10
ITALIAN STEAM COAL MARKET HAS RECOVERED - ITALIAN COAL ASSOCIATION
Press Release - This year Italy will import 17 million tons of steam coal, up 3% from 2009, and 5.5 million tons of coking coal and PCI, up 37% over ...
Friday, 19 November 10
WE'LL THINK ABOUT COAL TOMORROW - ANALYSIS
The future of coal generation in Russia is in question. The largest energy companies have abandoned their initial plans to switch their therma ...
Friday, 19 November 10
DRY BULK MARKET ON THE ROPES WITH BDI PLUNGING TO 2,164 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the panamax markets suffering the most this week, but a ray of hope for the capesize market, which appears to be stabilizing after days of fall ...
Thursday, 18 November 10
WORLD COAL ASSOCIATION WELCOMES NEW CHAIRMAN & SHENHUA GROUP AS NEW MEMBER 17 NOVEMBER 2010
Press Release – The premier global coal industry association marks its 25th anniversary with a new Chairman and welcomes China’s lar ...
Thursday, 18 November 10
MUNDRA PORT AWARDED BEST PRIVATE PORT - COMMODITY ONLINE / HELLENIC SHIPPING
Adani Group owned, Mundra Port has been awarded the Annual Indian Maritime Gateway Award for the Best Private Port of the Year for the third consecu ...
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- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Parliament of New Zealand
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- The University of Queensland
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- PTC India Limited - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
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