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)

Cockatoo Coal seeks bids for Queensland thermal coal project

Wed, August 10, 2011
By David Winning, Dow Jones Newswires

AUSTRALIAN miner Cockatoo Coal has put its Taabinga thermal coal project in Queensland up for sale, an informed source said today, in the latest sign that deal-flow in the coal sector is accelerating.

Sydney-based Cockatoo - one of a handful of listed Australian companies with producing coal mines - has appointed advisory firm RFC Corporate Finance to handle the sale of the Taabinga project, which has an estimated 252 million tonnes of undeveloped coal resources.

Cockatoo Coal and RFC each declined to comment on the sale.

Miners with Australian coal deposits are seeking to cash in on high asset-valuations and rising interest from overseas buyers, particularly emerging economies like China and India that need to ramp up coal imports to cover a growing supply gap at home.
Thermal coal is used to generate electricity, while coking coal is sought after by rapidly industrialising nations for its use in the steel production.

China's Yanzhou Coal Mining said on August 1 it had agreed to buy Syntech Resources, which operates a thermal coal mine in Queensland's Surat Basin; Yanzhou also acquired some exploration licenses for $202.5m.

In earlier signs of industry consolidation, Rio Tinto and Mitsubishi Corp launched a joint offer on Monday to take full control of Coal & Allied Industries, valuing Australia's sixth-largest coal miner by output at $10.6 billion. The deal echoed Peabody Energy and ArcelorMittal's recent $4.7bn bid for another Australian miner, Macarthur Coal.

Cockatoo Coal aims to attract bidders for the Taabinga project, which lies in the Tarong Basin east of the Surat, by flagging its potential to produce thermal coal for export.

The deposit is close to an existing rail line that runs as far as Gladstone, where a consortium of miners proposes to build the Wiggins Island Coal Terminal. Although export capacity for the first phase of the terminal's construction has already been allocated, Taabinga coal could be exported from 2016 when the port is due to be expanded.

Of the Taabinga project's coal resources, 91mt are in the most reliable "measured" and "indicated" categories. Cockatoo's valuation of the project isn't known.

Cockatoo Coal, which has several South Korean coal consumers on its share registry, operates the producing Baralaba coal mine and has several other projects in Queensland in development.

Shares in Cockatoo Coal jumped 6.85 per cent, adding 3 cents to 39c today as the benchmark S&P/ASX 200 index rose nearly 3 per cent.

3 Indian cos in race to bid for Bandanna Energy's coal assets

Mar18, 2011,03.56AM IST,
By Vinu Lal & MV Ramsurya, ET Bureau

BANGALORE/MUMBAI: Three top Indian companies have joined the race to bid for the coal assets of one of Australia's largest thermal coal explorers - Bandanna Energy - in a deal that could be valued at $1.5 billion. GVK, state-owned consortium ICVL and Reliance Power have shown early interest in bidding for the assets estimated to have reserves of over 1.3 billion tonnes of thermal coal, said people familiar with the development.

Bandanna Energy has initiated an auction process to sell the assets and has mandated UBS to advise it on the transaction. The last date for submission of bids is March 31, 2011.

An information memorandum circulated among bidders, a copy of which is with ET, indicate that the company has $750 million worth assets. A feasibility study on some of its coal assets completed last month, soon after which the sale process was kicked off.

Thermal coal is used by utility coal-fired power plants. Expanding capacities by companies in various industries have led to a rise in power consumption. While India is also rich in thermal coal deposits, high ash content in local coal and reduced production by Coal India, has prompted most user companies to scout global resource rich nations to tap for coal assets.

A GVK spokesperson did not reply to an email query sent by ET. Senior officials from GVK are currently in Australia. A Reliance Power spokesman denied the company is considering bidding for the coal assets. A senior ICVL executive said that the company was evaluating all options with respect to coal assets in Australia. "We have a board meeting scheduled on March 21 where we will take a call on all bids," he added. ICVL comprises of mining major NMDC, utility NTPC , steelmakers SAIL and Rashtriya Ispat Nigam , and Coal India.

Bandanna chairman Jeremy Barlow did not respond to an email query.

Bandanna would look at selling both minority or majority stake in its ongoing projects as well as explore the possibility of selling the entire entity as a whole. According to a person close to the bidder, current discussions initiated by the banker relate to a possible entity level sale rather than piecemeal project-level sale. "It is typical for a project as large as this to initially explore entity level interests than piecemeal selloffs," said the person.

Bandanna Energy has exploration licences for 16 blocks in the Bowen and Galilee Basins in Queensland. The company also has shale gas assets in the region. Six founder shareholders led by chairman Jeremy Barlow, own close to 70% stake in the listed Bandanna Energy.

Local demand for coal reported a compounded annual growth rate of over 8% during a five-year period till FY2010, to reach almost 600 million tonnes last year. The demand from the power sector, which accounts for over 70% of the country's overall coal demand, has been a major driving force, said a recent report by ICRA.