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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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Wednesday, 22 December 10
PEABODY ENERGY TO SOURCE INDONESIAN COAL FROM PT SUPRA BARA ENERGI (SBE) - COAL GEOLOGY
Coal Geology reported that, Peabody Energy has entered into an agreement to source coal from PT Supra Bara Energi (SBE), which will be sold on the e ...
Wednesday, 22 December 10
INDONESIAN COAL LOAD PORT WEATHER CONDITION AND DELAYS
COALspot.com - The several leading shipping agents in Indonesia, said due to rainy season in Indonesia, loading activities in coal loading ports hav ...
Wednesday, 22 December 10
COAL INDIA CLOSE TO BUYING 15% STAKE IN AUSTRALIAN MINE - ECONOMIC TIMES
Economic Times reported that, Coal India (CIL) is close to buying a stake between 10% to 15% in an Australian mine owned by Peabody, a US company.
...
Wednesday, 22 December 10
CAPESIZE FUTURES MARKET RATES ARE EXPECTED TO CONTINUE THEIR DRIFT DOWN IN 2011 - BRS
Nearly two months of weekly declines in the Baltic Capesize Index were finally halted last week with a small 1% increase Friday-to-Friday. The impro ...
Wednesday, 22 December 10
DRY BULK MARKET LOOKING FOR DIRECTION AMID HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry&rs ...
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- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Australian Coal Association
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Planning Commission, India
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
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