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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 $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Thursday, 13 January 11
DRY BULK RATES HIT NEW MULTI-MONTH LOWS ON AUSTRALIAS FLOODS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Floods in Australia’s Queensland has seriously disrupted coal shipments and together with a flood of vessels has pushed freight rates for dry ...
Wednesday, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
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- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- PTC India Limited - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- White Energy Company Limited
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Deloitte Consulting - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Australian Coal Association
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
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