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Wednesday, 13 May 09
ALPHA TO BUY RIVAL, CREATING NEW US COAL HEAVYWEIGHT - MININGWEEKLY.COM
 Alpha Natural Resources, the biggest supplier of metallurgical coal in the US, has agreed to buy Maryland-based rival Foundation Coal for about $1,4-billion in shares, creating what will be the nation's third-biggest coal miner.
The merged company will be better able to weather the short term challenges facing coal producers, as well as to take advantage of an anticipated rebound in demand and prices for coal, said Alpha CEO Michael Quillen.
He has been looking for opportunities to grow by merger or acquisition since bulk-commodities miner Cleveland Cliffs (now Cliffs Natural Resources) broke off plans in November to buy Alpha, because of market uncertainty and opposition from a key Cliffs shareholder.
“This is really the sort of transformational event that Alpha's been talking about for some time now, and we believe that this is also the right time to do it,” Quillen said on Tuesday.
Besides assets in Central and Northern Appalachia, Foundation produces coal from surface mines in the Powder River Basin, in Wyoming, which are not only less expensive to operate, but are also not facing the same regulatory challenges as the Appalachian region, where Alpha has all its assets.
While surface mines in the Eastern US are coming under increased environmental scrutiny and regulatory challenges, operations in Wyoming do not face the same degree of opposition.
The Foundation acquisition “does actually spread out the risk,” Quillen said.
Foundation also produces mainly thermal coal, for power generation, which help diversify Alpha's metallurgical-coal-heavy production mix.
The combined company, which will be 59% owned by current Alpha shareholders and 41% by Foundation, will operate 59 coal mines and 14 preparation plants, and will own more than 2,3-billion tons of coal reserves.
"We're creating a true US leader in the energy sector with balance, size and scale,” Quillen said.
The firms also expect to achieve at least $45-million a year in savings, as a result of synergies, beginning in 2010.
US coal producers, including the two largest – Peabody Energy and Arch Coal – have reduced production levels and sales forecasts for this year, after sales volumes fell sharply because of weak demand for both steel and electricity.
Alpha and Foundation have both also curtailed operations, and Foundation CEO James Roberts indicated last week that the company was expecting some utilities to defer contracted shipments this year.
However, speaking on a conference call on Tuesday, he said that demand for steel and electricity are expected to rebound in 2010 and beyond.
“And when the economy recovers, supply [of coal] will struggle to keep up with demand, so prices will recover,” Roberts said.
Foundation shares leapt 20,74% on Tuesday, to $28,06 apiece by 16:01 in New York. The stock traded as high as $31,54 earlier in the day.
Alpha stock slid 6,24%, to $27,06 a share.
Analysts generally welcomed the deal, with
STRUCTURED TO GROW
Once the Foundation transaction has closed, which is expected to be in the second half of the year, and the businesses are properly integrated, Alpha is keen to take advantage of further acquisition opportunities, Quillen said.
“The way we've structured this balance sheet is to continue to grow, and to take advantage of opportunities – whether they are distressed or whether they are just in different geographic basins,” he said.
“We are still going to be around in the M&A environment going forward.”
After the tie-up, the new company will have about $750 million in cash, cash equivalents and undrawn credit.
Under the terms of a definitive merger agreement, Foundation shareholders will receive 1,084 shares of the new company for each Foundation share held, while Alpha shares will automatically become shares of the combined company.
Alpha Natural will issue about 50-million new shares, and will assume $530-million of Foundation's net debt, for a total transaction value of around $2-billion.
The deal values Foundation stock at $32,73 a share, which was a 37% premium to the company's average closing share price over five days prior to the deal being signed.
The deal requires approval from shareholders representing a majority of the outstanding shares in each company.
Quillen said he was confident of shareholder support for the deal, and did not expect to encounter the sort of difficulties that scuppered the Cliffs transaction.
The new company will retain the Alpha name and will be headquartered in Abingdon, Virginia.
Quillen will be appointed chairperson and Alpha president Kevin Crutchfield will be CEO, while Kurt Kost, Foundation's president and COO, will become president of the combined company.
Source: http://www.miningweekly.com/article/alpha-natural-will-buy-foundation-for-2bn-creating-new-us-coal-giant-2009-05-12
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Wednesday, 27 May 09
NEWCASTLE PORT'S WEEKLY COAL EXPORTS INCREASE 3.6% - BLOOMBERG
Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 3.6 percent last week while the num ...
Wednesday, 27 May 09
EUROPEAN COAL PRICES FOR 2010 SETTLEMENT DROP TO 11-DAY LOW - BLOOMBERG
Benchmark European coal derivatives declined to an 11-day low as oil prices slumped.
Coal for delivery to Amsterdam, Rotterdam or Antwerp with se ...
Tuesday, 26 May 09
NEW MINING PERMITS TO BE OBTAINABLE WITHIN TWO WEEKS' TIME - MAJALAHTAMBANG
The Indonesian government is currently formulating a procedure for companies willing to obtain mining permits (IUP in its Indonesian abbreviation). ...
Tuesday, 26 May 09
KADIN CALLS FOR BIGGER RECOGNITION OF MINING SECTOR - MAJALAHTAMBANG
The Indonesian Chamber of Commerce and Industry (KADIN Indonesia) had called other sectors, particularly the forestry and the land administration se ...
Tuesday, 26 May 09
TUTICORIN PORT TO INVEST RS 700CR FOR COAL HANDLING FACILITIES
Business Standard reported that, The Tuticorin Port will develop coal handling facilities for state-run Neyveli Lignite Corporation (NLC) and Coasta ...
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- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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