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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 $8bn. Several other good-sized companies are expected to become involved in M&A including Consol Energy, Alpha Natural Resources and Arch Coal.
China’s lack of oil and gas reserves makes it difficult for the country to move away from coal, though the country has begun to address this over-reliance through imports and acquisitions of other resources. However, with newly installed coal-fired power plants now coming on line, it seems that China will remain heavily dependent on coal production and imports for the foreseeable future, and this will continue to drive overseas acquisitions of mining firms and coal assets.
Source: Financier World Wide
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Monday, 13 December 10
NALCO TO START WORK ON RS 18K CR ($ 4,010,695,091) INDONESIAN PROJECT BY JUNE - MSN
MSN reported that, State-owned NALCO today said it has selected UAE-based RAK Minerals as JV partner for its Rs 18,000 crore (US$ 4,010,695,091 ...
Monday, 13 December 10
DEUTSCHE BANK RAISES COAL FORECASTS ON MARKET SHORTAGE - BLOOMBERG
Deutsche Bank AG raised price forecasts for thermal coal by as much as 17 percent on expectations that a shortage of the fuel will widen over the ne ...
Monday, 13 December 10
K SERA SERA TO SPEND RS325CR TO BUY COAL,OIL & GAS FIRMS STAKE - LIVE MINT
The company might have to dole out around Rs 225 crore (US$ 50,122,522) for picking up the majority stake in the coal mine in Indonesia and around R ...
Thursday, 09 December 10
OVERSUPPLY OF SHIPS BOUND TO KEEP DRY BULK FREIGHT RATES SUBDUED DURING 2011 SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
An oversupply of vessels is expected to keep freight rates from flying as high as in recent years said a relative shipping report from BIMCO’s ...
Thursday, 09 December 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 103.41 PMT FOR DECEMBER DELIVERY
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
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- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- White Energy Company Limited
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
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