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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, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited ...
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- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Economic Council, Georgia
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
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