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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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Saturday, 16 May 09
FREIGHT MARKET HAS BEEN EXTREMELY BUOYANT - VISTAAR SINGAPORE
COALspot.com (Singapore): The week saw the BDI rally continuing and the market freight market has been extremely buoyant, VISTAAR Shipping Pte Limit ...
Friday, 15 May 09
INDIKA EXPECTS TO INCREASE COAL PRODUCTION BY 12.68% IN 2010 - THE JAKARTA POST
ENERGY and infrastructure company PT Indika Energy, the parent company of Indonesia's third largest coal producer PT Kideco Jaya Agung, expects its ...
Thursday, 14 May 09
INDONESIA 2009 COAL OUTPUT REVISED DOWN - REUTERS
* Indonesia coal output seen at 240 million tonnes in 2009
* Coal exports down 11.2 pct to 44.79 mln tonnes in Q1 2009
* Production down 1.4 pct t ...
Thursday, 14 May 09
PAKISTAN WILL IMPORT 3.2 MILLION TON OF COAL IN 2009 - SEATRADE
COALspot.com (Pakistan) - SEATRADE Group of pakistan a single largest imported coal supplier in Pakistan, forecasting Pakistan steam coal imports wi ...
Wednesday, 13 May 09
ADARO, ITM EXPECT COAL GROWTH IN 2009
Adaro, which has a market capitalization of $3.64 billion, sells to 48 customers in 18 countries worldwide, including power utilities Thai Power and ...
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- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Planning Commission, India
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- PTC India Limited - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
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