China Regulators Approve Acquisition of Australian Coal Company
07 December 2009
China’s National Development and Reform Commission has approved the takeover of Australian coal company Felix Resources Ltd. by the state-owned Yanzhou Coal Mining Co Ltd, China’s fourth-largest coal producer. The multi-billion-dollar deal is the largest approved for a Chinese firm to buy an Australia raw material provider, according to the Shanghai Daily News.
| Felix Resources Mine Locations. Source: Felix. Click to enlarge. |
In 2004, Yanzhou acquired Southland coal mine in Australia (renamed as “Austar Coal Mine”), marking the first successful acquisition of an overseas coal mine by a Chinese coal enterprise.
The remaining Chinese regulatory consent is required from the China Securities Regulatory Commission (“CSRC”). While the exact timing of the CSRC approval is not known, Felix expects this will occur shortly.
The two companies signed an agreement in August that Felix would be sold to Yanzhou Coal for AUD 16.95 per share, making a AUD 3.5 billion deal. The Australian government granted conditional approval for the takeover in October.
Yanzhou says that after the takeover it will have approved coal reserves of 1.5 billion tons in Australia.
China’s sovereign wealth fund, which held almost US$300 billion in assets at the end of last year, is also seeking acquisition chances in resources firms from Indonesia to Canada. The fund has spent more than US$4 billion since September to invest in resource sectors overseas.
Maybe it's just wishful thinking, but this might be a good thing from a GHG perspective.
1. It's a lot easier to tax/restrict coal when it's not being used in your own nation's power plants -- so this could help Aussie coal be used at a slower rate
2. If the coal is to be used in China, it's more expensive to be used in China than Australia, which makes the per ton cost higher (shipping). If the marginal cost of the coal is higher, it's more likely that a greener source (hydro, wind, even nat gas) will replace it sooner.
Wishful thinking?
Posted by: stomv | 07 December 2009 at 04:43 AM
stomv - Your last line is most probably correct.
Coal will remain cheaper than many alternative energy sources for decades unless it is taxed.
Posted by: HarveyD | 07 December 2009 at 10:10 AM