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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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Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
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- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Australian Coal Association
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
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