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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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Wednesday, 26 January 11
DRY BULK MARKET TAKES YET ANOTHER NOSEDIVE, CAPESIZES LOOK RATHER UNATTRACTIVE AT THE MOMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The downturn of the dry bulk market sees no boundariers, disproving even those who thought that at least for the capesize market, the worst had pass ...
Tuesday, 25 January 11
DRY BULK RATES CONTINUED TO TUMBLE LAST WEEK - BRS
With weather-related problems affecting the short-term outlook, and new building deliveries the longer-term picture, dry bulk rates continued to tum ...
Tuesday, 25 January 11
R-POWER TO INVEST $5BN IN INDONESIA - THE TIMES OF INDIA
The Times of India reported that, In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse $5 billio ...
Monday, 24 January 11
GOVT PROMISES COAL FOR PLN DESPITE PRICE SPIKES - THE JAKARTA POST
The Jakarta Post reported that, the government says state electricity company PT PLN will receive enough coal to fire its power plants, despite pric ...
Monday, 24 January 11
DRY BULK MARKETS DOWNTURN SEES NO RELIEF - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept falling for yet another week, with the industry’s benchmark, the Baltic Dry Index (BDI) losing an additional 4.79 ...
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- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Parliament of New Zealand
- White Energy Company Limited
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Minerals Council of Australia
- ASAPP Information Group - India
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
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