Australian,Indonesian,African Coal Mines Selling like Hot Cakes amongst Power Hungry Indian,Chinese Comanies
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March 19, 2011Coal Mines in Indonesia,Australia,Africa and North America are selling like hot cakes as Indian,Chinese companies as well as mining conglomerates like Rio Tinto,Vale,BHP Billiton fight to secure raw materials.Note India and China are consuming huge amounts of coal to power their thermal plants.While China consumes a monstrous 3 billion tons,Indian demand is rising at more than 10% a year though on a smaller base.Coal is the cheapest form of power despite its polluting and health hazardous affect.Though Coal Plants in Developed countries are becoming much more expensive to build due to taxes and opposition by environmental groups,there is no stopping their furious growth in countries like China and India.Though India too faces some environmental opposition,massive ultra mega power plants with capacity of 4000 MW are getting built by new Indian private utilities
With domestic coal production rising at a snail’s pace,these companies are racing to secure coal supplies at whatever price they can get.Steel companies too are hungry for coal as it forms a major component of their product.Lanco Solar,Adani Power,Reliance Power,Tata Power,Tata Steel,Coal India have all bought or are in the process of buying coal mines and coal companies in foreign countries.Australian and Indonesian miners are minting top dollar as competition hots up with Rio and BHP Billtion also using thier massive cash hoard into play.Australian coal mining company Whitehaven Coal is the latest to put iself on the selling block with a price tag of more than $3 billion.More than 20 companies are set to be looking into entering the tendering process.
$3.2bn Australian miner: AV Birla to join race
The $29-billion Aditya Birla Group is set to join the race to buy Australian coal mining company Whitehaven Coal.Close to 20 players — including the Anil Dhirubhai Ambani Group and consortia of Korea Resources Corporation and Daewooand China’s Shenhua Energy and Yanzhou Coal — are believed to be interested in the company.
Only half of them are likely to be selected for the formal bid-level discussions starting next month.But at a time when global coal prices are rising due to shortages, acquiring coal assets has become a strategic option for trading purposes as well.Whitehaven has interests in tenements covering 427 sq km in New South Wales.
The company also operates a coal handling and preparation plant and a rail loader.
Whitehaven has four open-cut coal mines — Rocglen, Sunnyside, Tarrawonga and Werris Creek — which produce around 1.5 million tonnes a year.
The Canyon mine is undergoing maintenance and has not produced since July 2009. Another coal mine, Narrabri North, was supposed to start producing in 2010, but did not.