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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, 13 May 09
COAL SUPPLY MAY BE VASTLY OVERESTIMATED - ABC SCIENCE
The world's coal supply suggests reserves may be vastly overestimated and we could be facing an unprecedented global energy crisis, according to a ...
Wednesday, 13 May 09
INDONESIA ADARO NET PROFIT, REVENUE TO RISE IN 2009 - REUTERS
INDONESIA's largest coal producer by market value, PT Adaro Energy Tbk, expects double-digit growth in revenue and net profit this year, an officia ...
Tuesday, 12 May 09
CHINA MINERS CUT COAL PRICE OFFER TO JAPAN UTILITIES - ALIBABA.COM
* Producers cut offer to $75.50 a tonne from over $80
* Negotiations may conclude soon as price gap narrows
* New offer at discount of about 43 pe ...
Tuesday, 12 May 09
INDO TAMBANGRAYA SEES 2010 COAL OUTPUT UP 25 PCT - REUTERS
Indonesian coal miner, PT Indo Tambangraya Megah (ITMG.JK), expects coal output to increase by up to 25 percent next year as production kicks in at ...
Tuesday, 12 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 ...
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- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
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- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
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