Tue Nov 22, 2011
BEIJING Nov 22 (Reuters) - China's Yanzhou Coal Mining Company Limited will produce more than 20 million tonnes of coal from its Australia assets in 2011 after the company signed two M&A deals in Australia earlier this year, Zhang Minglin, vice general manager of parent Yankuang Group, said on Tuesday.
If realised, coal output from Australia this year for the company will rise by 67 percent from last year, as Yanzhou aggressively expands business in Australia.
That accounts for about 40 percent of the compay's total coal output last year, which is 49.4 million tonnes, according to Reuters calculation.
Yanzhou Coal has made four successful M&A deals in Australia and is still keen to acquire more Australian coal assets.
In September this year, Yanzhou Coal agreed to buy two coal companies from Australia's Wesfarmers Ltd for A$296.8 million ($288.5 million).
In August, Yanzhou Coal bought 100 percent equity interests in two Australian coal producers, Syntech Holdings Pty Ltd and Syntech Holdings II Pty Ltd, for A$202.5 million ($222.08 million) in cash.
In 2009, Yanzhou Coal bought Australia's Felix Resources Ltd for $2.9 billion, and in 2004 it bought Southland Coal Mine in Australia and renamed it as Austar Coal Mine Pty Ltd.
(sourced Reuters)
Showing posts with label acquire overseas coal mines. Show all posts
Showing posts with label acquire overseas coal mines. Show all posts
Tuesday, November 22, 2011
Thursday, November 17, 2011
JSW undecided on Mozambique block
Thu,November 17, 2011
Mumbai: JSW Steel had plans to transfer thermal coal mine to the power arm, but the boards have yet to discuss the transfer.
Sajjan JindalJSW Steel had plans to transfer thermal coal mine to the power arm, but the boards have yet to discuss the transfer.
One may call it the curious case of the coal mine in Mozambique for the $7-billion diversified JSW Group.
At a time when its power arm, JSW Energy, is severely hamstrung due to the lack of captive coal resources to fire its thermal power portfolio, analysts and company shareholders are puzzled at the delay in transferring an existing coal mine within group companies.
Two years ago, during launch of the Rs 2,700-crore JSW Energy IPO, Sajjan Jindal, chairman of the group, had said JSW Steel was looking at selling the Mozambique coal mines to group company JSW Energy for Rs 300 crore. The decision was taken after it was discovered the majority of coal in the mine was thermal, more suited for power production.
Steel companies use coking coal. Considering JSW Energy did not possess any captive resources, the Mozambique mines were considered strategic.
But in the last two years, neither board has been able to finalise the transfer of the crucial asset.
When asked, Pramod Menon, CFO, JSW Energy, said the respective boards were yet to take up the transfer. "It is an issue which has to be considered by the boards," he said.
When asked why the two boards hadn’t discussed the issue, he said, "They are two separately-listed entities and one of them has an asset which belongs to them. Today, we have not yet considered the asset from the (JSW) Energy's perspective, nor have we got anything from (JSW) Steel if they would like to sell."
A corporate lawyer, who isn't allowed to speak to the media, said, "Since it is a non-core asset there should not be an issue in the deal, provided both boards agree upon the sale and the pricing, etc."
He said it was normal for companies to have such transactions within group companies. "There are a lot of asset transfers that happen within companies. But they have to take care that the deal is at arms-length."
JSW Energy said there were logistic challenges in Mozambique and the company would look at the merits of the projects before it is offered to them. Sajjan Jindal is the chairman and managing director of JSW Steel, as well as JSW Energy.
JSW Steel also has its own captive power plant of 300 Mw, which would be commissioned soon. The company might be keeping the coal block for their own use, Menon said.
Questions sent to JSW Steel remained unanswered.
An analyst tracking the sector and the company, said, "JSW Energy has been looking to acquire coal assets abroad and the Mozambique coal block transfer was definitely a positive story. However, we are yet to see the two companies make the deal."
Volatile coal prices have been consistently denting the profitability of JSW Energy, as even now the company predominantly relies on spot market deals to source raw material, having no long-term fuel security.
Imported coal prices have risen 30 per cent in the last one year and availability from Indian sources like Coal India have become extremely unreliable.
But what seems more odd is the fact, when the resource crunch is severely hurting the company's growth, there is no work ongoing also to develop the Mozambique mines and they are lying idle.
For the quarter ended September, the company's fuel costs grew 86 per cent on soaring spot coal prices, resulting in a net loss ofRs 109 crore, even as its income grew 18 per cent. A depreciating rupee further hit the company's earnings.
In the last one year, JSW Energy stock was down 60 per cent. On Wednesday it closed at Rs 46.4/share.
However, L K Gupta, deputy managing director, JSW Energy, said the company will definitely spring back to profitability in the third quarter as coal prices were coming down and its various expansion plans were getting commissioned.
Talking about efforts being undertaken to identify new sources of coal. Menon said that there is a drop in coal indexes in North and South America and the company is finding very attractive rates to tie up coal. "In terms of acquisitions, we are still looking out for opportunities. As and when we come across any asset which is making economic sense and in terms of size which we can chew, we will look at it. At this point in time we are evaluating assets but there is nothing that we can talk about.""For acquisitions, the question is what kind of landed cost of coal we are looking and if the acquisition can be a long term one.
Our balance sheet is very strong. Our consolidated net debt gearing is 1.7 times. So, in terms of leveraging and buy-outs it will not be an issue. We can look at an acquisition in the region of $250-$500 million," Menon added. Earlier this year, the company made a failed attempt at buying Canadian coal miner CIC Energy's asset in Botswana for $418 million. The company even extended the deadline to complete the deal once but decided to call off the deal. There have been rumours that JSW Energy might bid for New Hope of Australia. However, the company denied the news categorically.
(sourced BS)
Mumbai: JSW Steel had plans to transfer thermal coal mine to the power arm, but the boards have yet to discuss the transfer.
Sajjan JindalJSW Steel had plans to transfer thermal coal mine to the power arm, but the boards have yet to discuss the transfer.
One may call it the curious case of the coal mine in Mozambique for the $7-billion diversified JSW Group.
At a time when its power arm, JSW Energy, is severely hamstrung due to the lack of captive coal resources to fire its thermal power portfolio, analysts and company shareholders are puzzled at the delay in transferring an existing coal mine within group companies.
Two years ago, during launch of the Rs 2,700-crore JSW Energy IPO, Sajjan Jindal, chairman of the group, had said JSW Steel was looking at selling the Mozambique coal mines to group company JSW Energy for Rs 300 crore. The decision was taken after it was discovered the majority of coal in the mine was thermal, more suited for power production.
Steel companies use coking coal. Considering JSW Energy did not possess any captive resources, the Mozambique mines were considered strategic.
But in the last two years, neither board has been able to finalise the transfer of the crucial asset.
When asked, Pramod Menon, CFO, JSW Energy, said the respective boards were yet to take up the transfer. "It is an issue which has to be considered by the boards," he said.
When asked why the two boards hadn’t discussed the issue, he said, "They are two separately-listed entities and one of them has an asset which belongs to them. Today, we have not yet considered the asset from the (JSW) Energy's perspective, nor have we got anything from (JSW) Steel if they would like to sell."
A corporate lawyer, who isn't allowed to speak to the media, said, "Since it is a non-core asset there should not be an issue in the deal, provided both boards agree upon the sale and the pricing, etc."
He said it was normal for companies to have such transactions within group companies. "There are a lot of asset transfers that happen within companies. But they have to take care that the deal is at arms-length."
JSW Energy said there were logistic challenges in Mozambique and the company would look at the merits of the projects before it is offered to them. Sajjan Jindal is the chairman and managing director of JSW Steel, as well as JSW Energy.
JSW Steel also has its own captive power plant of 300 Mw, which would be commissioned soon. The company might be keeping the coal block for their own use, Menon said.
Questions sent to JSW Steel remained unanswered.
An analyst tracking the sector and the company, said, "JSW Energy has been looking to acquire coal assets abroad and the Mozambique coal block transfer was definitely a positive story. However, we are yet to see the two companies make the deal."
Volatile coal prices have been consistently denting the profitability of JSW Energy, as even now the company predominantly relies on spot market deals to source raw material, having no long-term fuel security.
Imported coal prices have risen 30 per cent in the last one year and availability from Indian sources like Coal India have become extremely unreliable.
But what seems more odd is the fact, when the resource crunch is severely hurting the company's growth, there is no work ongoing also to develop the Mozambique mines and they are lying idle.
For the quarter ended September, the company's fuel costs grew 86 per cent on soaring spot coal prices, resulting in a net loss ofRs 109 crore, even as its income grew 18 per cent. A depreciating rupee further hit the company's earnings.
In the last one year, JSW Energy stock was down 60 per cent. On Wednesday it closed at Rs 46.4/share.
However, L K Gupta, deputy managing director, JSW Energy, said the company will definitely spring back to profitability in the third quarter as coal prices were coming down and its various expansion plans were getting commissioned.
Talking about efforts being undertaken to identify new sources of coal. Menon said that there is a drop in coal indexes in North and South America and the company is finding very attractive rates to tie up coal. "In terms of acquisitions, we are still looking out for opportunities. As and when we come across any asset which is making economic sense and in terms of size which we can chew, we will look at it. At this point in time we are evaluating assets but there is nothing that we can talk about.""For acquisitions, the question is what kind of landed cost of coal we are looking and if the acquisition can be a long term one.
Our balance sheet is very strong. Our consolidated net debt gearing is 1.7 times. So, in terms of leveraging and buy-outs it will not be an issue. We can look at an acquisition in the region of $250-$500 million," Menon added. Earlier this year, the company made a failed attempt at buying Canadian coal miner CIC Energy's asset in Botswana for $418 million. The company even extended the deadline to complete the deal once but decided to call off the deal. There have been rumours that JSW Energy might bid for New Hope of Australia. However, the company denied the news categorically.
(sourced BS)
Thursday, November 3, 2011
Coal India Ltd gets Finance Ministry's nod for acquiring unlisted foreign companies
Thu,3 Nov, 2011
KOLKATA: Mining company Coal India Ltd (CIL) has got the Finance Ministry's nod for acquiring stake in overseas unlisted firms.
"We have received Union Finance Ministry's clarifications sought for overseas acquisitions. The ministry permitted (us) to go ahead with acquisition of unlisted firms," CIL chairman N C Jha said on the sidelines of the company's Foundation Day celebrations attended by Coal minister Sriprakash Jaiswal.
However, the Finance Ministry has not given complete relaxation to the norm of minimum 12 per cent internal rate of return (IRR) from such acquisitions.
"The Finance Ministry has said we can go ahead with the proposals even if the return is below 12 per cent if they are for strategic reasons, but those has to be cleared by them," Jha said.
He said CIL received proposals offering IRR between 9 and 12 per cent. The Finance Ministry will scrutinise the deals offering below 12 per cent IRR.
CIL, the world's largest coal miner, failed to strike any deal due to procedural delays in approval by the government. It had sought relaxation in two parameters of overseas acquisition norms, which were allowing them to acquire stake in unlisted firms, including those offering below 12 per cent IRR.
Jha said they would now pursue with some of the proposals lying before them.
(sourced ET)
KOLKATA: Mining company Coal India Ltd (CIL) has got the Finance Ministry's nod for acquiring stake in overseas unlisted firms.
"We have received Union Finance Ministry's clarifications sought for overseas acquisitions. The ministry permitted (us) to go ahead with acquisition of unlisted firms," CIL chairman N C Jha said on the sidelines of the company's Foundation Day celebrations attended by Coal minister Sriprakash Jaiswal.
However, the Finance Ministry has not given complete relaxation to the norm of minimum 12 per cent internal rate of return (IRR) from such acquisitions.
"The Finance Ministry has said we can go ahead with the proposals even if the return is below 12 per cent if they are for strategic reasons, but those has to be cleared by them," Jha said.
He said CIL received proposals offering IRR between 9 and 12 per cent. The Finance Ministry will scrutinise the deals offering below 12 per cent IRR.
CIL, the world's largest coal miner, failed to strike any deal due to procedural delays in approval by the government. It had sought relaxation in two parameters of overseas acquisition norms, which were allowing them to acquire stake in unlisted firms, including those offering below 12 per cent IRR.
Jha said they would now pursue with some of the proposals lying before them.
(sourced ET)
Tuesday, November 1, 2011
Winsway and Marubeni to acquire Grande Cache Coal
Tuesday, 01 Nov 2011
China’s Winsway Coking Coal Holdings Ltd and Japan’s Marubeni Corp. agreed to acquire Canadian metallurgical coal producer Grande Cache Coal Corp. for about CAD 1 billion.
Winsway and Marubeni will pay CAD 10 a share in cash, 112% more than its 20 day volume weighted average trading price. As per report “Winsway and Marubeni are offering CAD 9 a ton of coal reserves, which is more than the average of CAD 2.91 a ton for comparable North American metallurgical coal transactions and less than the CAD 17.86 a ton Walter paid for Western Coal.”
Grande Cache, which mines in west central Alberta, forecast sales of 2.2 million tons to 2.4 million tons in the year ended March 2012.
Winsway imports metallurgical coal into China and Marubeni is Japan’s fifth largest trading company.
The Grande Cache agreement includes a break fee of CAD 50 million payable by Grande Cache if the deal isn’t completed. Winsway and Marubeni will pay Cad 100 million if they scrap the deal.
The acquisition, which requires approval by two-thirds of Grande Cache shareholders and a majority of Winsway shareholders, is expected to close in February.
Deutsche Bank AG and UBS AG are advising Grande Cache and Burnet Duckworth & Palmer LLP is the company’s legal counsel. The acquirers are being advised by Toronto-Dominion Bank and law firm Osler, Hoskin & Harcourt LLP.
(Sourced from Bloomberg)
China’s Winsway Coking Coal Holdings Ltd and Japan’s Marubeni Corp. agreed to acquire Canadian metallurgical coal producer Grande Cache Coal Corp. for about CAD 1 billion.
Winsway and Marubeni will pay CAD 10 a share in cash, 112% more than its 20 day volume weighted average trading price. As per report “Winsway and Marubeni are offering CAD 9 a ton of coal reserves, which is more than the average of CAD 2.91 a ton for comparable North American metallurgical coal transactions and less than the CAD 17.86 a ton Walter paid for Western Coal.”
Grande Cache, which mines in west central Alberta, forecast sales of 2.2 million tons to 2.4 million tons in the year ended March 2012.
Winsway imports metallurgical coal into China and Marubeni is Japan’s fifth largest trading company.
The Grande Cache agreement includes a break fee of CAD 50 million payable by Grande Cache if the deal isn’t completed. Winsway and Marubeni will pay Cad 100 million if they scrap the deal.
The acquisition, which requires approval by two-thirds of Grande Cache shareholders and a majority of Winsway shareholders, is expected to close in February.
Deutsche Bank AG and UBS AG are advising Grande Cache and Burnet Duckworth & Palmer LLP is the company’s legal counsel. The acquirers are being advised by Toronto-Dominion Bank and law firm Osler, Hoskin & Harcourt LLP.
(Sourced from Bloomberg)
Sunday, October 30, 2011
NMDC to bid for Russia's Vincy Coal in 2-3 days
30 Oct, 2011,PTI
NEW DELHI: Looking to buy 2-3 properties overseas by year-end, state-owned NMDC is likely to put a bid for acquiring 100 per cent stake in Russia's Vincy Coal in two or three days.
Bid for Vincy Coal, which is estimated to have coking coal reserves of 70-100 million tonnes, will be submitted by November 1 by NMDC, said a source in the know of the development.
NMDC Board will meet this week before submitting the bid, the source said, adding, "it will be a low cost acquisition and NMDC is eying to acquire 100 per cent stake in Vincy Coal." The source declined to disclose the bidding amount.
Of late, NMDC has been working on acquiring several "low cost" assets and in September, it had entered into a deal to acquire 50 per cent stake in Australia's Legacy Iron Ore for little over Rs 90 crore.
On October 20, it signed a share subscription agreement with Legacy for the acquisition.
This includes, buying "some properties" of one of the iron ore companies in Australia, the source said, adding that properties of Brazil's Greystone Mineracao do Brasil and 50 per cent stake in Wonarah phosphate deposits of Australia's Minemakers are also on NMDC's radar.
However, the Indian mining major has sought some more information from Greystone before entering into a deal, the source said, declining to comment further.
NMDC has been in talks for the past few months to acquire a substantial stake in Greystone Mineracao from London-based Zamin Advisors, a private company controlled by NRI Pramod Agarwal.
The proposed mine area of Greystone is understood to have reserves of 260 million tonne of iron ore.
While for Minemakers' phosphate deposits in Wonarah, NMDC already has an MoU with the Australian firm for acquiring 50 per cent stake, both the companies are currently engaged in a pre-feasibility study of the deposits.
The Indian miner may also repay Minemakers the costs already incurred for Wonarah -- the largest undeveloped rock phosphate project in Australia -- as and when it enters into the deal for acquiring the stake, according to the source.
"All these are going to be low-cost acquisitions, totalling USD 500 million and is aimed to be sealed by the end of this year," said the source.
The NMDC Board had also met on October 10 to decide on the proposals but it could not take a final call as there were "some unanswered issues" related to the acquisitions, the source added.
(sourced
NEW DELHI: Looking to buy 2-3 properties overseas by year-end, state-owned NMDC is likely to put a bid for acquiring 100 per cent stake in Russia's Vincy Coal in two or three days.
Bid for Vincy Coal, which is estimated to have coking coal reserves of 70-100 million tonnes, will be submitted by November 1 by NMDC, said a source in the know of the development.
NMDC Board will meet this week before submitting the bid, the source said, adding, "it will be a low cost acquisition and NMDC is eying to acquire 100 per cent stake in Vincy Coal." The source declined to disclose the bidding amount.
Of late, NMDC has been working on acquiring several "low cost" assets and in September, it had entered into a deal to acquire 50 per cent stake in Australia's Legacy Iron Ore for little over Rs 90 crore.
On October 20, it signed a share subscription agreement with Legacy for the acquisition.
This includes, buying "some properties" of one of the iron ore companies in Australia, the source said, adding that properties of Brazil's Greystone Mineracao do Brasil and 50 per cent stake in Wonarah phosphate deposits of Australia's Minemakers are also on NMDC's radar.
However, the Indian mining major has sought some more information from Greystone before entering into a deal, the source said, declining to comment further.
NMDC has been in talks for the past few months to acquire a substantial stake in Greystone Mineracao from London-based Zamin Advisors, a private company controlled by NRI Pramod Agarwal.
The proposed mine area of Greystone is understood to have reserves of 260 million tonne of iron ore.
While for Minemakers' phosphate deposits in Wonarah, NMDC already has an MoU with the Australian firm for acquiring 50 per cent stake, both the companies are currently engaged in a pre-feasibility study of the deposits.
The Indian miner may also repay Minemakers the costs already incurred for Wonarah -- the largest undeveloped rock phosphate project in Australia -- as and when it enters into the deal for acquiring the stake, according to the source.
"All these are going to be low-cost acquisitions, totalling USD 500 million and is aimed to be sealed by the end of this year," said the source.
The NMDC Board had also met on October 10 to decide on the proposals but it could not take a final call as there were "some unanswered issues" related to the acquisitions, the source added.
(sourced
Thursday, October 27, 2011
Desi companies set to feature among world's top 10 coal miners
Tue, Oct 27, 2011,
MUMBAI: What is common between Anil Ambani, Gautam Adani, Madhusudan Rao and GV K Reddy? In a race to secure coal assets to fuel their power plants, these billionaires are fast emerging as global coal barons. The companies that they run - Reliance Power,Adani Power, Lanco Infratech and GVK - will feature among the top 10 coal miners in the world, behind Peabody and Shenhua Energy, once they start coal production in coming years.
Peabody Energy, which claims to be the world's largest private sector coal producer, had registered sales of 246 million mt in 2010 and Shenhua Energy's coal production is pegged at 256 million mt according to its website.
However , government-owned Coal India is the world's single largest coal producer with an annual production in excess of 430 million mt. At peak production, some of these Indian firms will have excess coal production compared to such global miners as Rio Trinto, Anglo American , Xstrata, Russian Suek and Indonesian Adaro. Adani, with a resource base in excess of 8 billion mt of coal, plans to produce 200 million mt per annum at peak production, while others plan to produce over 100 million mt per annum each in the coming years.
Increasing Imports:
In spite of having the world's third biggest coal resources after US and China, Indian firms are aggressively acquiring coal assets overseas as most of Indian coal reserves lie in forest areas and cannot be mined for environmental concerns.
Indian coal imports are, therefore, seen rising against a stagnant output and rising demand. Total coal imports in 2010 were 55 million mt, which is likely to climb to 186 million mt by 2014 because of aggressive ramp-up plans by steel and power companies. Michael Cooper, associate editor, Platts International Coal Report, has another reason.
"The quality of thermal coal in India is of very low calorific value with high ash content compared to imported coal, which has comparably higher heating values and, when burned, increases power station boilers' efficiency."
Global Acquisitions:
Indian firms have already spent over $10 billion to acquire coal mines overseas and are likely to invest a similar amount in coming years. Adani acquired Linc Energy's Queensland coal tenements in a deal valued at $2.72 billion and agreed to pay another $2 billion in cash for the Abbot Point terminal near Bowen to secure coal delivery. Similarly, Reliance Power has acquired three coal mines in Indonesia with total reserves of 2 billion mt.
The company plans to further invest $500 million to ramp up capacity . "With reserves in excess of 4 billion mt in India and overseas , no doubt we will be among the top 10 coal miners in the world with an annual production of 100 million mt in coming years," Jayarama Prasad Chalasani, Reliance Power CEO, told TOI.
G V Krishna Reddy of GVK Group has also joined the premier league of coal barons. His latest $1.26-billion acquisition in Australia will give him access to 8 billion mt of coal reserves to fuel GVK's power projects in India. Another power company, GMR Energy, had in August agreed to buy a 30% stake in PT Golden Energy Mines for $550 million. The firm had earlier acquired an Indonesian coal company PT Barasentosa Lestari for $100 million.
Others like Lanco with captive coal reserves of 2 billion mt are still scouting opportunities. "Recently, we acquired Griffin coal in Australia for $750 million. We are building a pipeline for acquisitions in Indonesia, Africaand Australia," K Naga Prasad, Lanco's CEO (business development) told TOI. Cooper believes that, going forward, Indian firms will continue to acquire overseas coal assets aggressively.
"India has ambitious plans to expand it steel-making and power-generating capacity and, if its domestic production cannot match this, then it will have to source this coal from overseas or otherwise reduce its targets for steel production and electricity generation," Cooper added.
Undervalued Share Prices :
Indian infrastructure companies may secure the the top 10 global positions by chasing the black diamond overseas, but when it comes to valuations , the stocks of these companies have taken a severe blow.
The fact that shares of Lanco Infratech, Adani Power and Reliance Power are available for discounts of 33% to 75% is because the markets have taken a weak view of their overleveraged acquisitions, litigations and regulatory clearances and possible impact of carbon tax abroad.
(sourced TOI)
MUMBAI: What is common between Anil Ambani, Gautam Adani, Madhusudan Rao and GV K Reddy? In a race to secure coal assets to fuel their power plants, these billionaires are fast emerging as global coal barons. The companies that they run - Reliance Power,Adani Power, Lanco Infratech and GVK - will feature among the top 10 coal miners in the world, behind Peabody and Shenhua Energy, once they start coal production in coming years.
Peabody Energy, which claims to be the world's largest private sector coal producer, had registered sales of 246 million mt in 2010 and Shenhua Energy's coal production is pegged at 256 million mt according to its website.
However , government-owned Coal India is the world's single largest coal producer with an annual production in excess of 430 million mt. At peak production, some of these Indian firms will have excess coal production compared to such global miners as Rio Trinto, Anglo American , Xstrata, Russian Suek and Indonesian Adaro. Adani, with a resource base in excess of 8 billion mt of coal, plans to produce 200 million mt per annum at peak production, while others plan to produce over 100 million mt per annum each in the coming years.
Increasing Imports:
In spite of having the world's third biggest coal resources after US and China, Indian firms are aggressively acquiring coal assets overseas as most of Indian coal reserves lie in forest areas and cannot be mined for environmental concerns.
Indian coal imports are, therefore, seen rising against a stagnant output and rising demand. Total coal imports in 2010 were 55 million mt, which is likely to climb to 186 million mt by 2014 because of aggressive ramp-up plans by steel and power companies. Michael Cooper, associate editor, Platts International Coal Report, has another reason.
"The quality of thermal coal in India is of very low calorific value with high ash content compared to imported coal, which has comparably higher heating values and, when burned, increases power station boilers' efficiency."
Global Acquisitions:
Indian firms have already spent over $10 billion to acquire coal mines overseas and are likely to invest a similar amount in coming years. Adani acquired Linc Energy's Queensland coal tenements in a deal valued at $2.72 billion and agreed to pay another $2 billion in cash for the Abbot Point terminal near Bowen to secure coal delivery. Similarly, Reliance Power has acquired three coal mines in Indonesia with total reserves of 2 billion mt.
The company plans to further invest $500 million to ramp up capacity . "With reserves in excess of 4 billion mt in India and overseas , no doubt we will be among the top 10 coal miners in the world with an annual production of 100 million mt in coming years," Jayarama Prasad Chalasani, Reliance Power CEO, told TOI.
G V Krishna Reddy of GVK Group has also joined the premier league of coal barons. His latest $1.26-billion acquisition in Australia will give him access to 8 billion mt of coal reserves to fuel GVK's power projects in India. Another power company, GMR Energy, had in August agreed to buy a 30% stake in PT Golden Energy Mines for $550 million. The firm had earlier acquired an Indonesian coal company PT Barasentosa Lestari for $100 million.
Others like Lanco with captive coal reserves of 2 billion mt are still scouting opportunities. "Recently, we acquired Griffin coal in Australia for $750 million. We are building a pipeline for acquisitions in Indonesia, Africaand Australia," K Naga Prasad, Lanco's CEO (business development) told TOI. Cooper believes that, going forward, Indian firms will continue to acquire overseas coal assets aggressively.
"India has ambitious plans to expand it steel-making and power-generating capacity and, if its domestic production cannot match this, then it will have to source this coal from overseas or otherwise reduce its targets for steel production and electricity generation," Cooper added.
Undervalued Share Prices :
Indian infrastructure companies may secure the the top 10 global positions by chasing the black diamond overseas, but when it comes to valuations , the stocks of these companies have taken a severe blow.
The fact that shares of Lanco Infratech, Adani Power and Reliance Power are available for discounts of 33% to 75% is because the markets have taken a weak view of their overleveraged acquisitions, litigations and regulatory clearances and possible impact of carbon tax abroad.
(sourced TOI)
Wednesday, October 19, 2011
NTPC to acquire coal mines in Mozambique and Indonesia
Wed, 19 Oct,2011
Live Mint reported that NTPC Limited has appointed a consultant to evaluate two medium sized coal mine acquisitions in Mozambique and Indonesia even as it plans to exit International Coal Ventures Pvt Limited, a consortium of state run firms formed to buy overseas coal mines.
A senior NTPC executive said that "Mozambique and Indonesia deals are at present on the verge of getting materialized."
NTPC needs 166 million tonnes of coal in the year to March 31st 2012, of which around 16 million tonnes has to be imported. The company has already placed orders for importing 12 million tonnes.
NTPC is likely to change its strategy by seeking long term coal supply agreements instead of buying overseas mines, as envisaged in the company’s vision document, NTPC Corporate Plan 2032, drawn up by consulting firm Bain and Co India Pvt Ltd. Bain also advised NTPC to take small stakes in overseas mines to ensure supply security.
Another NTPC executive said that "We never said that if we get a very good opportunity, we will not buy a mine. It all depends upon the opportunity."
Mr Celio Nhachungue, deputy national director of the international relations directorate in Mozambique’s industry and trade ministry, said that there was a lot of interest from Indian companies to enter his country’s mining sector.
Mr Vicente Paulo C Chihale, commercial counselor at Mozambique’s high commission in New Delhi, said that "There are no more coal mines left to be acquired. Foreign companies can now participate in our mining sector through getting into joint ventures with the existing mine holders."
-By livemint
Live Mint reported that NTPC Limited has appointed a consultant to evaluate two medium sized coal mine acquisitions in Mozambique and Indonesia even as it plans to exit International Coal Ventures Pvt Limited, a consortium of state run firms formed to buy overseas coal mines.
A senior NTPC executive said that "Mozambique and Indonesia deals are at present on the verge of getting materialized."
NTPC needs 166 million tonnes of coal in the year to March 31st 2012, of which around 16 million tonnes has to be imported. The company has already placed orders for importing 12 million tonnes.
NTPC is likely to change its strategy by seeking long term coal supply agreements instead of buying overseas mines, as envisaged in the company’s vision document, NTPC Corporate Plan 2032, drawn up by consulting firm Bain and Co India Pvt Ltd. Bain also advised NTPC to take small stakes in overseas mines to ensure supply security.
Another NTPC executive said that "We never said that if we get a very good opportunity, we will not buy a mine. It all depends upon the opportunity."
Mr Celio Nhachungue, deputy national director of the international relations directorate in Mozambique’s industry and trade ministry, said that there was a lot of interest from Indian companies to enter his country’s mining sector.
Mr Vicente Paulo C Chihale, commercial counselor at Mozambique’s high commission in New Delhi, said that "There are no more coal mines left to be acquired. Foreign companies can now participate in our mining sector through getting into joint ventures with the existing mine holders."
-By livemint
Monday, March 14, 2011
NTPC to form JVs for foreign plants in 3 months
Monday, 14 Mar 2011 | Reuters
India's top power utility NTPC plans joint ventures in three months to build USD 3.5 billion power plants in Bangladesh and Sri Lanka.
In August, NTPC agreed with Bangladesh Power Development Board to set up two coal fired power plants of 1320 MW capacity each in an equal partnership venture. NTPC has also agreed to set up a 500 MW plant in Sri Lanka at a cost of about USD 500 million.
Mr Arup Roy Choudhury told Reuters in an interview that NTPC, whose 85% of current 33.2 GW capacity is coal based, has no plans to acquire overseas coal mines for at least two years as supplies for existing plants have been locked in.
I He said that "We plan to sign agreements on these two projects in 2 to 3 months with local joint venture partners.”
He said that NTPC which generates about 30% of the country's power, plans to add 25,000 MWs of electricity by 2017. Mr Roy Choudhury said that "Every third bulb in the country is lit by NTPC.”
While India has the world's fourth largest coal reserves, its coal imports have grown rapidly as Asia's third largest power producer seeks to step up capacities to end blackouts.
Power firms, including Reliance Power, TATA Power Co and Adani Enterprises have acquired coal assets overseas besides importing coal from Russia to power world's second fastest growing major economy.
But NTPC has no such plans at least for next two years.
He said that "We already have order for next two years in hand. I don't expect any overseas coal mine acquisition in at least two years. That might happen after two years, but definitely not now. We are not in a hurry to acquire overseas coal mines at least in two years."
India's coal imports in the current fiscal is estimated at 137 million tonne, junior coal minister Mr Pratik Prakashbapu Patil told lawmakers on Wednesday.
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