Messrs Rothschild and Bakrie team up to dig coal
COAL is so popular that it makes for odd bedfellows. In November Nat Rothschild, a member of a prominent European banking dynasty, announced a tie-up with one of South-East Asia’s most controversial tycoons. Aburizal Bakrie (pictured) is the patriarch of a scrum of companies with interests in everything from agriculture to shipping. He is also a powerful politician who may well run for Indonesia’s presidency in 2014.
Indonesia is the world’s largest exporter of thermal coal. The Bakrie Group controls some of its choicest mines. Since these are conveniently located a shortish sea trip from the ravenous power plants of China and India, they are tempting to investors. …
What is good news for miners is bad news for the environment
IN RICH countries, where people worry about air quality and debate ways of pricing carbon emissions, coal is deeply unfashionable. Elsewhere demand for the dirty rocks has never been stronger. The International Energy Agency (IEA) reckons world consumption will increase by a fifth over the next 25 years, assuming governments stick to their current climate-change policies. A new age of coal is upon us.
The IEA estimates that China, which generates more than 70% of its electricity with coal, will build 600 gigawatts (GW) of coal-fired power capacity in the next quarter-century—as much as is currently generated with coal in America, Japan and the European Union put together. Nomura, a Japanese bank, thinks that may be an underestimate. It reckons China will add some 500GW of coal-fired power by as early as 2015, and will more than double its current generating capacity by 2020. It expects Indian coal-fired power generation to grow too—though more slowly. …
At 0119 GMT, Straits Asia shares were up 6.4% at S$2.81, with over 9.1 million shares changing hands.
Adventus Holdings unit Adventus NZ says it is terminating a sale and purchase agreement signed with Medha International.
This was because less than 8 million tonnes of recoverable coal reserves were found by its geologists as agreed upon under the deal.
Adventus says it is taking steps to recover the deposit of US$1 million ($1.3 million).
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US private equity firm Texas Pacific Capital (TPG.UL) and Singapore sovereign wealth fund GIC (GIC.UL) invested 2.99 trillion rupiah ($435 million) for a stake in an Indonesia coal contractor, two sources with knowledge of the deal said on Sunday.
TPG and GIC have bought non-voting shares in Northstar Tambang Persada, a special purpose vehicle which owns 40% in PT Delta Dunia Makmur (DOID.JK), according to a statement to Indonesia’s stock exchange, following a report in the Financial Times on Dec 18 about the deal.
Daiwa Securities in a Dec 6 research report says: “We see more challenging y-o-y earnings comps in 2011, with the Felix acquisition rolled in fully and volume growth slowing through 2012. Seasonal factors remain positive for coal prices.
“The opening of a trading floor is evidence of our commitment to the Asia-Pacific market and will build upon the activities of the marketing office that was established in 2008,” Jon Cameron, managing director of RWE’s Singapore trading office, said in a statement today.
At 0154 GMT, Straits Asia shares were up 3.3% at $2.50 with over 2.6 million shares changing hands.
Seroja Investments says subsidiary PT Pulau Seroja Jaya (PT PSJ) has entered into a coal barging agreement with PT Adaro Indonesia.
The coal barging agreement was won by PT PSJ through a competitive bidding process where PT PSJ emerged as the bidding party which made the best offer. Through this deal, PT PSJ will further strengthen and enlarge their strategic relationship with PT Adaro Indonesia, which is one of the largest coal producers in Indonesia.
PTT Pcl, Thailand’s largest energy company, said it agreed to buy the coal assets of Australia’s Straits Resources for A$544.1 million ($703.5 million).
PTT will pay A$1.72 a share for Straits’ 40% stake in PTT Asia Pacific Mining Pty Ltd. following a planned demerger of Straits’ coal and metal assets, it said in a statement today. The deal will give PTT full ownership of PTT Asia Pacific.
Noble Group (N21.SG) +3.9% at $2.11 midday, enjoying robust gains in good volume of 55 million shares ahead of 3Q results tomorrow as global rally in commodity prices amid weak USD, flush liquidity buoys shares.
Gains also come after company announces deal to be exclusive marketing agent for Indonesia’s Berau Coal production exported to international destinations ex-Japan, Malaysia.
DBS Vickers says “this announcement is significant, as it could potentially almost double (Noble’s) coal trading volume from Indonesia”, currently expects Noble to procure around 15 million tons of coal from Indonesia, excluding Berau. Pending 3Q results, DBSV reviewing forecasts to take additional volume into account; also puts recommendation, target (both not stated) under review.
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India’s creaking coal industry celebrates the country’s biggest IPO
GRABBING hot coals is usually a stupid thing to do. But investors who scrambled to buy shares in Coal India, a big state-run firm, thought their fingers safe enough. India’s biggest-ever initial public offering (IPO) was oversubscribed on its second day, October 19th. By selling 10% of its shares, the government raised about 150 billion rupees ($3.5 billion). The world’s largest coal producer, which extracted more than 430m tonnes last year, is one of India’s ten biggest firms by market value. Local newspapers crowed that India was now in the “IPO big league”.
Nearly everyone seems happy. The government has a trainload of cash. Neither unions nor demagogues made much fuss. Reform-minded officials may take this as a green light to carry on quietly privatising other state-run enterprises, albeit slowly. And a few more Indians are now retail investors, encouraged by a small discount on the share price. …
Singapore Exchange (SGX) says it will be the first exchange in the world to clear over-the-counter (OTC) Indonesian Sub-Bituminous Coal Swap from 3 November 2010. The extension of SGX’s OTC clearing service to the Asian coal market offers traders and physical players an effective risk management tool to support its high growth potential.
Jeremy Ang, Executive Director, Commodities at Singapore Exchange, says, “This new service is aimed at meeting the needs of price and counterparty risk management in the growing OTC coal swap market. Participants will gain access to an expanding and readily available pool of counterparties on SGX. This adds to the extensive list of OTC contracts SGX is already clearing.”
Mirach Energy says it has gained the rights to produce and sell coal in an open-pit coal mine in Samarinda, the capital of the Indonesian province of East Kalimantan.
The contract area covers 100 hectares and is located near to operational haulage road, stockyard and conveyor loading jetty. The mine produces sub-bituminous coal of caloric value 5100- 5300 Kcal/kg. This type of coal, also known as steam coal, is generally used for power generation.
Alan Greenspan told the Council of Foreign Relations last week:Fiat money has no place to go but gold.Greenspan also said that supply and demand explanations treating gold like other commodities “simply don’t pan out.”Greenspan also spoke of how, …
Marco Polo Marine, theintegrated marine logistic group, says wholly-owned subsidiary, MP Shipping Co Pte Ltd (MPS), has secured a 2-year coal shipment contract worth about US$15.5 million ($21 million).
The coal shipment contract is secured with an Indonesia coal miner and will commence from September 2010. Under the contract, the group will undertake the shipment of coal from Sumatra in Indonesia to West Malaysia over a period of 2 years.
Straits Asia Resources (AJ1.SG) last flat at $2.13, off $2.16 earlier high, failing to build on initial momentum fuelled by news of Indonesia-based coal miner’s increased coal reserves at its Jembayan mine, says Dow Jones.
While latest coal reserves +21% from end December, Goldman Sachs, which has Sell call with $1.90 target, says increase smaller than expected given substantial rise in drilling activity.
Indonesia-based coal miner Straits Asia Resources says it posted a 107% rise in net profit to $23.24 million for the second quarter 2Q2010 versus $21.43 million for 2Q2009. Revenue rose 9.1% to $191.5 million compared to $175.6 million.
Led by Jembayan Mine which achieved a record production level for the quarter of 2,465kt, total coal production for 2Q was 2,664 kt, exceeding 2Q 2009’s levels by 41% despite poor weather conditions that affected most Kalimantan coal miners in May and June.
