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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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Sunday, 23 January 11
THE AVERAGE CHARTER RATE FOR CAPE SIZE VESSELS WAS AT $ 8,859 PD ALMOST CLOSE TO 2008 LOWS - VISTAAR
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1,370 points. “ In May 2010 the BDI touched ...
Saturday, 22 January 11
POSSIBLE COAL EXPORT RESTRICTIONS ON INDONESIA UNLIKELY TO AFFECT CHURCHILL MINING - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining moved to reassure investors after a fall in its share price, stating that from talks with the au ...
Thursday, 20 January 11
INDONESIA MAY BAN LOW-QUALITY COAL EXPORTS FROM 2014 - BLOOMBERG
Bloomberg reported that, The Indonesian government plans to ban exports of coal with an energy value of less than 5,600 kilocalories a kilogram star ...
Thursday, 20 January 11
SUPRAS ARE DOING USD 7- 8K FOR INDONESIA-INDIA - FEARNBULK
Handy
Negative sentiment for forward positions in the Atlantic market due to lack of cargo availability and too many ballasters from the East. Con ...
Thursday, 20 January 11
ITMG TARGETS TO PRODUCE 25 MILLION TONS OF COAL THIS YEAR - BISNIS INDONESIA
Bisnis Indonesia reported that, Coal producer PT Indo Tambangraya Megah Tbk (ITMG) targets to produce 25 million tons of coal this year, a 13. ...
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- India Bulls Power Limited - India
- Anglo American - United Kingdom
- The University of Queensland
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- GMR Energy Limited - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
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