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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, 04 November 10
GVK TALKS WITH MEC FOR INDONESIAN MINES DEAL - DNA INDIA
As reported by DNA India, GVK Power and Infrastructure on Wednesday said it is in talks with Gulf-based MEC Coal to buy its coal mines in Indonesia, ...
Wednesday, 03 November 10
PANAMAX SIZE DRY-BULK CARRIER MARKET IS STRONG - GERSON LEHRMAN
Panamax class vessels have been part of the fluctuation of the broader current dry bulk market. They have experienced occasional steep movements, du ...
Tuesday, 02 November 10
ADDED VALUE REMAINS STAGNANT - MAJALAH TAMBANG
The improvement of added value of mining products in accordance with mandate of the mining law has not been visible. Minerals and coal are still exp ...
Saturday, 30 October 10
THE SUPRAMAX FREIGHT MARKET THIS WEEK REMAINED ALMOST AT LAST WEEK LEVELS - VISTAAR SINGAPORE
COALspot.com: The freight market this week remained almost at same levels except for Panamax index which was up by 191 points.
The feast/SE Asia ...
Friday, 29 October 10
CAPE MARKET STARTED TO BREAK THOUGH THE UPWARDS RESISTANCE LEVEL OF USD 40K DAILY FOR SPOT CARGOS - FEARNLEYS
HANDY
The Atlantic markets remain flat and lackluster. The expectations that the grain ...
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- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- The University of Queensland
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
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