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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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Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
Friday, 28 January 11
MPM SEEKS 40K TONS OF INDONESIAN COAL
An Indian paper producer Mysore Paper Mills Ltd., based in Bangalore is looking for 40,000 metric tons of non-coking coal of Indonesian o ...
Friday, 28 January 11
TRADING PERMIT DELAYS THREATEN EXPORTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, an ongoing wrangle over licenses for mining traders could hurt investment, a coal mining association chief said on ...
Friday, 28 January 11
DRY BULK MARKET CLOSING IN TOWARDS CRISIS LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The trials and tribulations of the dry bulk market seem to have no end during the first month of 2011, as the industry’s benchmark, the Baltic ...
Wednesday, 26 January 11
ADANI TO SET-UP RAIL, PORT AND POWER PROJECTS IN INDONESIA - MONEYCONTROL
Moneycontrol reported that, Adani Enterprises, the flagship company of India’s infrastructure conglomerate the Adani Group, today announced th ...
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- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- VISA Power Limited - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- The University of Queensland
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Indian Energy Exchange, India
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