Vedanta mulling bid for Australia's New Hope-sources

Tue Nov 15, 2011

* Vedanta held talks with banks, to appoint advisors-sources
* Yet to begin formal talks with New Hope-sources
* Australian coal miner has put itself up for auction

MUMBAI/SYDNEY, Nov 15 (Reuters) - India-focused British miner Vedanta Resources is considering a bid for New Hope Corp, the $5 billion Australian coal miner that has put itself up for auction, two sources with direct knowledge of the matter said.

Vedanta, controlled by Indian billionaire Anil Agarwal, has held discussions with banks and is expected to appoint advisors "soon", said the sources, who declined to be named as they were not authorised to speak to the media.

"We are yet to begin formal talks," one source told Reuters.

Spokesmen for Vedanta and New Hope were not immediately available for comment.

New Hope is among the last few major coal companies left in resource-rich Australia after a flurry of recent takeovers consolidated the industry.

Among those interested in the Queensland-based thermal coal producer are Indian conglomerates Tata Group, Aditya Birla Group and JSW Steel, China's Yanzhou Coal Mining Co Ltd and London-listed Xstrata.

Energy-starved Indian companies are scouting for overseas coal assets to run thermal power plants to feed their operations or for utilities.

In September, GVK Power & Infrastructure acquired a majority stake in Australian coal mines and a port and rail project owned by heiress Gina Rinehart's Hancock Group for $1.26 billion.

A month earlier GMR Infrastructure, with interests in airports, energy and highways, had signed a pact to acquire a 30 percent stake in Indonesia's Golden Energy Mines.

Vedanta is in the final stages of completing its long-awaited $6 billion deal to take control of oil explorer Cairn India, after securing approval from the Indian government and shareholders.

The deal has inflated the group's net debt, which stood at $7.2 billion during the first half of this fiscal year.

Last week, Vedanta said its underlying attributable profit for the first half dropped more than 34 percent to $186.3 million on the back of losses in its aluminium business and a weakening Indian rupee.

Coal prices have been stable at more than $100 a tonne for most of the past year, aside from brief spikes after the Queensland floods and Japanese tsunami.

(sourced Reuters)

JSW Energy not bidding for New Hope coal assets - Report

Friday, 11 Nov 2011

Power utility JSW Energy is not looking to bid for Australia's New Hope coal assets, but declined to comment for other group firms.

Mr Lalit Kumar Gupta joint MD & CEO told reporters that the company expects to swing back to profit in the current quarter on back of coal prices correcting and tariff hikes.

Earlier, the firm posted a net loss of INR 1.09 billion for July-Sept quarter.

(Sourced from Reuters)

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)

India's Aditya Birla mulls bid for Australia's New Hope-sources

Thu Nov 3, 2011

* Group expects to appoint adviser for bidding soon-sources
* New Hope has market value of $5.2 bln
* Birla group needs thermal coal for aluminium, cement units
By Sumeet Chatterjee

MUMBAI (Reuters) - India's diversified Aditya Birla Group is considering bidding for Australia's New Hope Corp , a $5 billion coal miner that put itself up for auction last month, sources with direct knowledge said on Wednesday.

The group, a telecoms-to-cement conglomerate, requires thermal coal for group companies Hindalco Industries , India's top aluminium producer, and UltraTech Cement , the country's largest cement producer.

The group is expected to appoint an adviser for the bidding process soon, two sources with direct knowledge of the situation told Reuters. They declined to be named as the information is not public yet.

Tuhin Mukherjee, managing director of Aditya Birla Natural Resources, declined to comment.

New Hope is considering a break-up and asset sales amid interest from global resource companies, sources said last month.

Among those interested in the Queensland-based thermal coal producer are India's No.3 steelmaker, JSW Steel , China's Yanzhou Coal Mining Co Ltd and London-listed Xstrata , the sources had said.

Aditya Birla Group, a $35 billion conglomerate that gets 60 percent of its revenue from its overseas operations, is unlikely to face a problem in financing a possible deal, the sources said .

New Hope is among the last few major coal companies left in resource-rich Australia after a flurry of recent takeovers consolidated the industry.

The Australian miner's New Acland mine, west of Brisbane, produces thermal coal used in power plants. New Hope sells about 65 percent of its coal overseas and the remaining to the domestic market.

New Hope's wholly owned port facility makes it attractive to potential suitors, but the sale process is complicated by its ownership structure and the high price tag, bankers and analysts had said last month.

India holds 10 percent of the world's coal reserves but local supplies are falling short of demand as the country builds more power plants, and as domestic coal projects run into environmental and land acquisition delays.

Indian energy firms have been scouting for coal assets overseas to feed power plants at home, and have been raising funds for potential overseas acquisitions and expanding facilities.

The energy-hungry nation aims to halve a near-14 percent peak-hour power deficit within two years .

India's GVK Power & Infrastructure said in September it would pay $1.26 billion for a majority stake in three Australian coal mines and a port and rail project owned by heiress Gina Rinehart's Hancock Group.

In August, GMR Infrastructure , with interests in airports, energy and highways, said its unit has entered into a pact to acquire a 30 percent stake in Indonesia's Golden Energy Mines for $450 million to $550 million in cash.

(sourced Reuters)

Australian coal assets are overpriced - Mr Mende

Saturday, 29 Oct 2011

Bloomberg quoted AMCI Capital LP a private equity investor in coal, iron ore and base metals said Australia coal assets are expensive making acquisitions challenging.

Mr Hans Mende president of Greenwich, Connecticut based AMCI said “We’re always looking but it’s difficult. Australian assets are overpriced.”

He said “Our business model is basically greenfield development. He added that I believe Aquila will get their funding for their share.”

AMCI owns stakes in Australian resources companies including Aquila Resources Ltd and Whitehaven Coal Ltd. AMCI held shares in Felix Resources Ltd which China Yanzhou Coal Mining Co Ltd bought in 2009 for AUD 3.5 billion.

AMCI isn’t interested in buying Australia New Hope Corp a coal producer with mines in Queensland State that last month said it’s starting a formal process for sale after receiving several offers.

AMCI is an equal partner with Aquila in the AUD 5.2 billion West Pilbara Iron Ore Project that includes a mine and port development to ship the steelmaking ingredient from Western Australia Pilbara region. Aquila is selling two projects and is seeking to raise USD 2 billion in debt to help pay for its share in the venture.

(Sourced from Bloomberg)

JSW Steel bidding for Australian coal miner New Hope - Report

Tuesday, 25 Oct 2011

Bloomberg quoted two people familiar with the plans as saying that JSW Steel Ltd is considering a bid for New Hope Corp the Australian coal producer valued at AUD 5 billion.

According to the people with knowledge of the plan who asked not to be identified because the discussions are at an early stage the company is studying the assets and may make an offer.

One of the people said without giving details JSW will look at ways to raise money to fund the acquisition either on its own or through a venture.

Buying New Hope, based in Ipswich, Queensland state, would give JSW thermal coal mines and an export terminal. New Hope which operates the Acland coal mine in Queensland said on October 5 that selected groups will be invited to submit offers in a process that is likely to take months.

Mr Abhisar Jain an analyst at Centrum Broking Pvt in Mumbai said “The New Hope asset is very big and will help the energy unit of JSW to secure raw material. It will be a huge task for someone like JSW to raise money for such an asset.”

(Sourced from Bloomberg)

Flooding hits New Hope coal shipments

March23,2011 12:00AM
By Sarah-Jane Tasker,The Australian

QUEENSLAND coalminer New Hope has reported a jump in its first-half profit to $407.4 million, but widespread flooding is still affecting its shipments.

According to the company, the healthy profit was driven by the sale to Royal Dutch Shell and PetroChina of its 16.7 per cent stake in Arrow Energy, which added a one-off $326m to net profit.

Excluding this benefit, net profit in the six months to the end of January fell 27 per cent to $81.1m, on the back of increased costs, Queensland flooding and a strong Australian dollar.

The miner, which operates three mines in Queensland, said although the heavy rainfall in December and January had only a limited effect on mining operations, damage to the Western Rail Line servicing flagship project New Acland had prevented shipment of coal from that mine.

It said rail transport from New Acland had been curtailed for about 2 1/2 months but was expected to resume later this month.

New Hope has ramped up production at its West Moreton operations and increased truck haulage levels from New Acland.

According to the company, this year's second-half result will be harmed by the unavailability of the Western Rail Line and the flow-on effect to exports from New Acland. It added that revised full-year sales forecasts were expected to be in the range of 4.8-5.2 million tonnes.

Clean-coal production for the half year, fell 2 per cent to 2.8 million tonnes.

The Bureau of Meteorology warned yesterday that the area in southeast Queensland where New Hope has its operations had a 70 per cent chance of higher than median rainfall in the three months to the end of June.

Despite the weather, New Hope managing director Rob Neale said the miner had increased export sales during the first half by 23 per cent to 2.7 million tonnes.

"As a result, we are in a good position to take advantage of firming coal prices once transport infrastructure in the region has been repaired," he said.

"Recent acquisitions in both the coal and energy sector complement a very strong balance sheet and provide New Hope with a solid platform for growth in the short to medium term."

The company was positive on the outlook for the price of thermal coal, with contract negotiations between Swiss giant Xstrata and Japanese power generators to start in the next few weeks.

It is understood Xstrata representatives were in Japan ready to start talks just after the Japanese earthquake and tsunami, which have stalled discussions.(sourced Theaustralian)

New Hope's bid for coal company short: Northern Energy shares jumped 7c yesterday

By Matt Chambers, The Australian

February 01, 2011 12:00AM
COAL junior Northern Energy is most likely to reject a raised $225 million cash bid from New Hope because it remains well below the value ascribed to the target in an independent expert's report.
New Hope has boosted its hostile bid from $1.50 a share to $1.75, which is still less than half the upper range of the diluted value of between $2.70 and $3.99 a share assigned to Northern Energy by independent expert Lonergan Edwards in a recent target's statement.
Northern Energy managing director Kevin Barker said his board had not met to discuss the bid or form a recommendation to shareholders, but his view on the matter was clear.
"It remains significantly below the valuation of the company," Mr Barker said.
Northern Energy shares jumped 7c yesterday to a 2 1/2-year high of $1.74, indicating investors do not expect a competing bidder to value Northern Energy anywhere near as highly as Lonergan had.

Mr Barker said the target was still in discussions with other potential suitors after opening a data room late last year.
New Hope chairman Robert Millner said his new offer, which was at an 84 per cent premium to where the stock traded before the first New Hope bid, was a fair one.
"We think it is a very fully priced bid," Mr Millner said. "There are no other competing bids."
New Hope's bid is conditional on it securing 50.1 per cent of Northern Energy, of which it already has a 4.97 per cent stake.
"There is a risk that the price of Northern Energy may fall to pre-takeover approach levels if the offer does not succeed," Mr Millner said. He said there were significant risks associated with holding Northern Energy shares, particularly in relation to the funding and development of Northern Energy's project pipeline.

New Hope, by contrast, has $2 billion of cash reserves it can use to fund development.
Brisbane-based Northern Energy is planning to start production at is Maryborough coking coal project in 2012 and the Elimatta thermal coalmine in 2014, depending on Queensland infrastructure capacity.
Mr Barker noted that a number of milestones in development of Northern Energy's projects had been announced since the New Hope bid.
Coal prices, and those of coal stocks, had also risen.
"Northern Energy would most likely have responded positively to the changes in the economic environment, regardless of New Hope's offer," the target said.(sourced:theaustralian.com.au)

Queensland's southeastern mines are stopped

News via Coalportal.com Jan 12, 2011

Queensland’s continuing flood crisis has now hit coal mining in the state’s southeast, with the major miner, New Hope Corporation, confirming a halt to operations, sources reported.
New Hope says that while its two open cut pits, New Acland and Oakleigh in the Clarence-Moreton Basin west of Brisbane, are operational, floods have stopped coal shipments, either by road or rail, it noted.
The two mines account for New Hope’s 5Mtpa output, most of it exported through the New Hope-owned Brisbane port coal terminal.
New Hope’s confirmation follows news that global giant Peabody Energy has suspended mining at its Wilkie Creek thermal coal export operation in the Surat Basin that also ships through Brisbane - and a halt to rail shipments to the port from the Syntech Resources company’s Surat Basin Cameby Downs mine, which shipped its first export coal to Brisbane less than two months ago.