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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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Friday, 22 May 09
CHURCHILL DOUBLES INDONESIAN COAL PROJECT RESOURCE ESTIMATE - STEEL GURU
Mining Weekly quoted Churchill Mining as saying that the resource at its East Kutai coal project in Indonesia has more than doubled to 3.18 billion ...
Friday, 22 May 09
INDONESIA`S BUKIT ASAM TO HAVE POWER PLANT IN 2011 - ANTARA
The construction of a power plant in South Sumatra by coal mining company PT Tambang Batubara Bukit Asam will be completed in April 2011.
T ...
Friday, 22 May 09
NOBLE WINS CONTROL OF AUSTRALIA'S GLOUCESTER COAL - BLOOMBERG
Noble Group Ltd., a Hong Kong- based commodity supplier, won control of Australia’s Gloucester Coal Ltd. after last week raising its cash bid ...
Thursday, 21 May 09
FBR STARTS COVERAGE OF SHIPPING SECTOR - REUTERS
Friedman Billings Ramsey began coverage of the shipping industry, saying the sector, which is amidst a deep cyclical downturn, is poised for a recov ...
Thursday, 21 May 09
INDONESIAN COAL PRODUCTION IN Q1 BELOW TARGET - STEEL GURU
Mr Bambang Gatot Ariyono director for coal and mineral development at the Energy and Mineral Resources Ministry said that the coal production in the ...
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- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- The University of Queensland
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
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