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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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- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- The University of Queensland
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Economic Council, Georgia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
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