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

Cash rich miners could turn more hostile on acquisition deals

Friday, 05 Aug 2011

Reuters reported that deal advisers warn to expect more hostile deals in resources as cashed up miners turn desperate to snare targets, following Peabody Energy and ArcelorMittal's change of tack this week on their USD 5.3 billion bid for Macarthur Coal.

The pace of resources deals has picked up in recent weeks, putting the sector on track to top a record USD 120 billion in transactions this year, Ernst & Young predicts.

Deals are being fuelled by miners anxious to deploy the spoils from booming commodity markets, with some being forced to move into new sectors or regions, as the number of top tier assets available grows thin.

Mr Tim Day, head of UBS's Perth office, told Reuters that "There are fewer and fewer world class assets out there, so as people get more and more desperate, they may have no choice but to go hostile."

Knowing that suitors are hungry, takeover targets with bullish expectations are holding out for strong offers, while weak equity markets have depressed their shares, making it harder for deals to be sealed.

To help close that valuation gap and get deals done, suitors may have to go hostile, like Peabody and top steel maker ArcelorMittal in their chase for Australian coal miner Macarthur.

Mr Paul Murphy, Asia Pacific mining and metals transactions leader at Ernst & Young, told reporters that "With all the takeovers announced, pretty much all of them have been friendly. That could change."

Mr Day said Australia may still be attractive for Chinese gold investors, like Zijin Mining, China's top gold producer, which has bought just under 17% of Norton Gold Fields, potentially as a beachhead for further offshore expansion.

He said that "Australia makes a lot of sense for Chinese investors from a time zone perspective and offshore investment in gold assets aligns with their strategic diversification away from US dollars."

He predicted there would be more cross border deals in the gold sector, in contrast to the past year, dominated by deals done within Australia and Canada, like Kinross Gold's USD 7 billion takeover of Red Back Mining.

(Sourced from www.reuters.com)

NALCO sells aluminium at $109 premium - source

Mar15,2011, 10:45 AM

BHUBANESWAR, India (Reuters) - India's National Aluminium Co Ltd (NALCO) sold 3,000 tonnes of aluminium ingots at $109 per tonne premium over the average LME cash price on a cost, insurance and freight basis, a company source said on Tuesday.

The buyer, Switzerland-based Alaska Metals will get the metal in one batch by April, the senior official with direct knowledge of the deal said, but cited company policy to stay unidentified.

NALCO, whose tenders serve as a global benchmark, last sold 7,500 tonnes of aluminium ingots in February to the same company at a premium of $106.51 per tonne over the average LME cash price on a delivered basis. (Reporting by Jatindra Dash; Editing by Harish Nambiar,sourced:Reuters)

Australia says China changes investment tack, tensions gone

Wed, Mar09,2011 5:51am GMT

CANBERRA, March 9 (Reuters) - Chinese companies wanting to invest in Australian resource firms have reassessed how they approach deals, and tensions over the last few years have evaporated, Australian Resources Minister Martin Ferguson said on Wednesday.

"I think China has now reassessed how it goes about investment. You look at the investment over the last three years out of China. It's huge across a range of commodities, from magnetite (iron ore), to coal, to uranium, LNG. They've had a lot of success," Ferguson told Reuters in an interview.

"The so-called tension has largely disappeared. It's all about a learning process and they have a properly focused understanding on how to actually succeed with the investment," he said.

"I frequently meet the Chinese ambassador and different companies, talking about how to go about their investment. They now have discussions with FIRB (Foreign Investment Review Board) even before they lodge applications, get an assessment of what is required."