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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, 08 January 11
DIFFICULT YEAR FOR SHIPPING - TRANSPORT WEEKLY
Transport Weekly reported that, Shipping Corporation of India (SCI) chairman Sabyasachi Hajara says 2011 will be a difficult year because an excess ...
Saturday, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
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- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Planning Commission, India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
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