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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, 15 December 10
SMALLER DRY BULK VESSELS ARE LOOKING UP, LARGER ONES FAIL TO DELIVER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market lost further ground at the beginning of the week, in what could prove one of the slowest periods ship owners have been faced. Ye ...
Tuesday, 14 December 10
COAL IMPORTS MAY INCREASE 78% TO CHINA, INDIA: ENERGY MARKETS - BUSINESS WEEK
Business Week reported that, China and India may increase imports of coal by 78 percent to 337 million metric tons next year, further driving up pri ...
Tuesday, 14 December 10
BANPU PLANNING PRODUCTION BOOM - BANGKOK POST
Australian, Indonesian output to lead growth
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, wants to nearly double its coal ...
Tuesday, 14 December 10
THE FREIGHT RATES FROM INDONESIA TO INDIA AND CHINA REMAINED FIRM - CAPT. REDDY
COALspot.com - The freight market continued to be soft with the Cape sector most effected which was down by 289 points and closed at 2,694 poi ...
Monday, 13 December 10
ICE FUTURES EUROPE TO LAUNCH IHS MCCLOSKEY INDONESIAN SUB-BITUMINOUS FOB MARKER COAL CONTRACTS - MONDOVISIONE
Mondovisione reported that, IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over ...
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- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- The University of Queensland
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
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