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Friday, November 4, 2011

Tata Said to Consider Bidding for Australian Coal Miner New Hope

Friday, Nov 4, 2011

Tata Group, India’s largest business entity, may bid for New Hope Corp., the Australian company valued at A$4.9 billion ($5.1 billion), to secure thermal-coal mines, three people familiar with the plan said.

Tata Steel Ltd. (TATA), India’s largest producer of the alloy, and Tata Power Ltd. may jointly make an offer for Ipswich, Queensland-based New Hope, said the people, declining to be identified because discussions are at an early stage. Both Tata Steel and Tata Power require coal to run their plants.

New Hope, which operates the Acland coal mine and an export terminal, is profiting as demand increases from power producers in China and India. JSW Steel Ltd. (JSTL), India’s third-largest producer of the alloy, may make an offer, two people with knowledge of the plan said Oct. 24.

The price of thermal coal, used to produce electricity, is likely to gain in the next two years because of Asian demand, Credit Suisse Group AG said last month.

Tata Steel spokesman Prabhat Sharma declined to comment. Tata Power spokeswoman Shalini Singh didn’t respond to mobile- phone calls and an e-mail seeking comment.

New Hope may attract interest from BHP Billiton Ltd. and Rio Tinto Group, according to Ord Minnett Ltd., as well as energy suppliers in Japan, which is facing a power shortage after the worst nuclear disaster in a quarter century. The miner said on Oct. 5 that selected groups will be invited to submit offers in a process that is likely to take months.

Globally, coal deals gained have reached $35 billion this year, against $21.8 billion in the same period last year, according to data compiled by Bloomberg.

India, the world’s third-largest coal user, had 31 power plants with four days’, or “super critical,” stockpiles on Nov. 1, compared with 10 on Sept. 1, according to the Central Electricity Authority. The normal level should be 15 to 30 days, the state agency said. Overall, the average inventory at India’s 89 coal-based plants was six days. The average at China’s biggest plants was 20 days.

(sourced Bloomberg)

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