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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, 31 December 10
STC TO FINALIZE 12 MILLION MT OF COAL IMPORT CONTRACT TO TWO INDIAN AND A DUBAI BASED COAL TRADER - SOURCES
COALspot.com - World's single largest coal import tender floated by STC on behalf of state utility NTPC to finalize its suppliers or already finali ...
Thursday, 30 December 10
DRY BULK MARKET STAYS SUBDUED AT THE END OF 2010 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dy bulk market failed to cheer ship owners across the board as the year draws to an end, thus bringing mixed feelings ahead of 2011. On one hand ...
Thursday, 30 December 10
KANGAROO RESOURCES BUYS INDONESIAN COAL COMPANY
Australian-listed Kangaroo Resources Ltd. said Wednesday it will buy 99% of the Pakar thermal coal project in East Kalimantan, for A$277 million thr ...
Wednesday, 29 December 10
WEATHER IMPACTS RIO TINTO COAL AUSTRALIAS QUEENSLAND OPERATIONS
Press Release - As a result of severe monsoonal rain in central and northern Queensland, force majeure has been declared on coal sales contracts fro ...
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while ...
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- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- White Energy Company Limited
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Minerals Council of Australia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- VISA Power Limited - India
- Marubeni Corporation - India
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
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