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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, 24 December 10
DRY BULK OWNERS COULD SOON RECONSIDER SCRAPPING OLDER VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market close to its lowest levels in months and indeed close to 2010 lows, ship owners could be heading towards scrapyards in a bi ...
Thursday, 23 December 10
SOUTHGOBI RESOURCES CLOSES STRATEGIC INVESTMENT IN ASPIRE MINING LIMITED
Press Release – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878), announced today that it has completed the private placement with Aspire Mining ...
Thursday, 23 December 10
CESC EYES COAL MINES IN INDONESIA, S AFRICA - TEHELKA
Company has already set a target of adding 6,000 MW power generation by the end of the 12th Plan in 2017
Tehelka reported that, CESC Ltd, the fla ...
Thursday, 23 December 10
SANTA CLAUSE DID NOT COME EARLY THIS YEAR - FEARNBULK
Handy
Not much fresh enquiry this week and quite dead in Bl.Sea/Med. Nevertheless ...
Thursday, 23 December 10
STERLITE ENERGY LIMITED TO BUY 0.6 MLN MT OF COAL FOR 2011
COALspot.com - Sterlite Energy Limited (SEL) is a part of Vedanta Resources plc , a London listed FTSE 100 diversified metals and mining major with ...
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- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Central Java Power - Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
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