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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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Thursday, 20 January 11
DRY BULK MARKETS FALL SEES NO END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Pundits indicating that the dry bulk market’s sentiment remains weak were justified, as the industry’s benchmark, the Baltic Dry Index ( ...
Wednesday, 19 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Tuesday, 18 January 11
MINISTRY SEEKS COAL FROM INDONESIA - SUNDAY OBSERVER
Sunday Observer reported that, Ministry of Power and Energy is to explore the possibilities of importing quality coal from Indonesia.
Minister Pa ...
Tuesday, 18 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Sunday, 16 January 11
STANCHART GLOBAL RESEARCH SEES COAL PRICE RISING ON SUPPLY DISRUPTION - BURSA MALAYSIA MARKET NEWS
Bursa Malaysia Market News reported that, Standard Chartered Global Research has upgraded its 2011 forecasts for global thermal coal prices based on ...
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- Minerals Council of Australia
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Parliament of New Zealand
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- ASAPP Information Group - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
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