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Tuesday, 21 December 10
CHINA COAL CAP TO BOOST GLOBAL M&A - FINANCIER WORLD WIDE
 Financier World Wide reported that, Chinese state-run media has reported that the Central Government intends to cap domestic coal production for fear of exhausting reserves and failing to meet the needs of the fast expanding economy. At the same time, the National Energy Administration director, Zhang Guobao, has encouraged Chinese mining enterprises to pursue mergers and acquisitions at home and abroad in order to consolidate and modernise the disjointed mining industry and to increase coal imports. The news comes at a time when the global mining sector is witness to record annual M&A transactions. According to Dealogic, over $47.1bn has changed hands in 2010, through 968 deals. China was the target of a record $11.6bn of these deals.
Imports and exports
China’s love affair with coal began amidst the industrialisation of the 1950s, and the country has depended heavily on the fossil fuel ever since. Ninety-seven percent of China’s coal is consumed in power generation, industry, coking, and residential use and heating.
Of these, power supply needs dominate. According to the US Geological Survey (USGS), two-thirds of Chinese electricity generation is from coal-fired plants and power generation accounts for half of China’s coal use.
The pace of Chinese industrial growth saw the country move from being a net exporter of 1.8 million tonnes in 2008, to a net importer of 103 million tonnes in 2009. It is the second largest user of coal next to the US, accounting for 41 percent of the world’s total consumption, and is by far the world’s largest producer of the fuel. Despite this, China’s domestic mining industry is challenged by lack of centralisation, inefficiency and overburdened transport links. Frequent industrial accidents and environmental issues are also major problems.
Domestic and outbound deals
To modernise its mining industry the Chinese government aims to shut down a large proportion of its 11,000 small coal mines while encouraging state owned and private coal mine enterprises to initiate mergers and acquisitions.
Yanzhou Coal Mining Co. recently revealed plans to buy a 51 percent stake in the Inner Mongolia-based Haosheng Coal Mining Ltd. for $980m, and Aluminum Corporation of China will invest $80.5m to establish Shanxi Xiuxin Gugou Coal (Group), merging the assets of five coal companies. The newly established group will have coking coal reserves of 300 million tons which are expected to last up to 75 years.
The government also aims to secure imports through a program of cross-border M&A. In the three years to September 2010, Chinese companies spent $20.96bn on overseas coal industry acquisitions, and activity has continued since the government’s announcement. Australia has been a particularly prized target for Chinese firms of late.
Yanzhou bought Australia’s Felix Resources Ltd. for $2.9bn in August 2009 and has actively been scanning the market for additional acquisitions, particularly coking and thermal coal operations. In November 2010 China Coal Geology Engineering Corp and Wanbei Coal-Electricity Group partnered to explore and develop coal resources in Queensland. They expect to uncover 10 billion tonnes of reserves. November also saw Australia’s Caledon Resources agree to be bought by the Chinese state-owned investment group Guangdong Rising Assets Management Co for £252m.
Global interest
Companies around the world have caught wind of China’s resource fears, and are scrambling to meet the demand. On 16 November, Nat Rothchild’s Vallar paid $3bn for 25 percent of Indonesian coal producer PT Bumi Resources and 75 percent of PT Berau Coal Energy. Just days later, the US coal miner Walter Energy bid $3.2bn for Canada’s Western Coal, with the intention of supplying the Chinese market.
Plenty of others are cashing in too. Caterpillar has spent $8.6bn buying US-based Bucyrus, a manufacturer of excavators used in opencast coal mines. The firm has said the coal industry is one of the principal growth markets that they are now targeting.
Australia has remained a prime target for foreign companies seeking to benefit from growing prices and sales to Asia. 2010 saw $6.7bn of coal acquisitions in the country, compared to $5.9bn for the whole of 2009.
The US is also becoming a major playing field for coal industry M&A deals, due in part to the relatively low price of its thermal coal. Privately held, Alabama-based Drummond and Co. is taking bids for its mines in North Columbia, expecting to fetch up to $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Friday, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
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- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- White Energy Company Limited
- Bhatia International Limited - India
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
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