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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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Thursday, 16 December 10
LANCO BAGS AUSTRALIAN COAL MINER GRIFFITH - DNA
As part of its strategy to secure coal supplies for meeting its needs in expanding power generation capacities, infrastructure major Lanco Infratech ...
Thursday, 16 December 10
COAL INDIA IN TALKS WITH INDONESIAN CO TO BUY ITS COAL MINES - APN NEWS
APN News reported that, World’s largest coal producer Coal India is in talks with Indonesia’s Sinar Mas Group for acquiring coal mines i ...
Wednesday, 15 December 10
GOVT SETS NEW MINIMUM LEVEL FOR DOMESTIC MARKET SALES - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal producers are required to sell at least 24.17 percent of their production to the domestic market nex ...
Wednesday, 15 December 10
CAPESIZE RATES ARE NOW AT THEIR LOWEST LEVEL SINCE AUGUST
It was a repeat performance for the market this week, with another increase in earnings for the small sizes but a sharp drop for the Capes. Overall ...
Wednesday, 15 December 10
LARGE ORDERBOOK TO HINDER 2011 DRY BULK MARKET REBOUND DESPITE INCREASED DEMAND SAYS PARAGON SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A large orderbook which currently stands at 53% of the existing fleet is expected to render 2011 another challenging year for the dry bulk marke ...
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- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- PTC India Limited - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- The University of Queensland
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
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