Active M&A deals in coal seen
By Richard Fu |
October 23, 2010, Saturday
|
Print Edition
Print Edition
MERGER and acquisition activities are set to remain active in China's coal industry over the next five years as the government continues to push for further consolidation in the sector.
The National Development and Reform Commission, China's top economic planning body, wants the number of coal companies, especially small mines, to "fall sharply" from more than 11,200 now, according to a statement released on Thursday. No figure was specified.
A number of giant coal groups with annual capacity of 50 million tons or more will be formed, and they will make up more than half of China's output, the NDRC said, without giving a timetable.
The average annual capacity of individual coal producers will be raised to 800,000 tons each from less than 300,000 tons now, it said.
China's coal industry remains fragmented, polluting and unsafe in many cases, though improvements have been made in recent years.
The industry restructuring efforts could slow coal output growth in China, which was 12.7 percent last year. As a result, coal imports could rise, which is what happened in 2008 when the government last went on a consolidation drive.
"Chinese coal firms should have more say in international markets as imports rise," Daton Securities analyst Chen Wenqian said. "The creation of super big groups could effectively increase China's influence."
Consolidation will be the theme in the coal industry over the 12th Five-Year Plan, which starts next year, and that could benefit large companies, China Merchants Securities analysts wrote in a report.
Coal stocks rose yesterday after the government issued its statement on industry consolidation.
Investors also sought the shares on expectations of rising demand ahead of the peak winter season. Most of China will get its first taste of winter this weekend as a cold air mass moves in, according to the National Meteorological Center.
Shanxi Coal International Energy Co surged 10 percent to 38.36 yuan on a plan to acquire assets from its parent. Datong Coal Industry Co, China's third-largest coal miner, gained 3.82 percent to end at 25.81 yuan. The benchmark Shanghai Composite Index dipped 0.3 percent.
The National Development and Reform Commission, China's top economic planning body, wants the number of coal companies, especially small mines, to "fall sharply" from more than 11,200 now, according to a statement released on Thursday. No figure was specified.
A number of giant coal groups with annual capacity of 50 million tons or more will be formed, and they will make up more than half of China's output, the NDRC said, without giving a timetable.
The average annual capacity of individual coal producers will be raised to 800,000 tons each from less than 300,000 tons now, it said.
China's coal industry remains fragmented, polluting and unsafe in many cases, though improvements have been made in recent years.
The industry restructuring efforts could slow coal output growth in China, which was 12.7 percent last year. As a result, coal imports could rise, which is what happened in 2008 when the government last went on a consolidation drive.
"Chinese coal firms should have more say in international markets as imports rise," Daton Securities analyst Chen Wenqian said. "The creation of super big groups could effectively increase China's influence."
Consolidation will be the theme in the coal industry over the 12th Five-Year Plan, which starts next year, and that could benefit large companies, China Merchants Securities analysts wrote in a report.
Coal stocks rose yesterday after the government issued its statement on industry consolidation.
Investors also sought the shares on expectations of rising demand ahead of the peak winter season. Most of China will get its first taste of winter this weekend as a cold air mass moves in, according to the National Meteorological Center.
Shanxi Coal International Energy Co surged 10 percent to 38.36 yuan on a plan to acquire assets from its parent. Datong Coal Industry Co, China's third-largest coal miner, gained 3.82 percent to end at 25.81 yuan. The benchmark Shanghai Composite Index dipped 0.3 percent.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
