Arch Coal (NYSE:ACI), Cloud Peak Energy (NYSE:CLD) and Peabody Energy (NYSE:BTU) stand to benefit strongly from the proposed Washington State coal export terminal by Ambre Energy.
The company proposes to build a coal export terminal on the Columbia River in Longview, Washington. Once operational it would deliver over 5 million tons of coal to the coal-hungry nations of China, Japan, South Korea, and India, where demand for coal continues to grow.
The state granted a permit for Ambre to convert a former aluminum smelter into an export terminal.
Radical environmentalists, as usual, oppose the terminal, citing the tired old lie of global warming or climate change as the reason it shouldn't be allowed to go forward.
A typically clueless lawyer for Earthjustice named Jan Hasselman, said, "How are we going to get to the climate goals that
scientists have said are necessary? These decisions are being made by others, such as the coal companies, by default."
Hasselman needs to do some homework, as scientists haven't come to any type of consensus to there even being such a thing a man-made global warming, as a matter of fact, tens of thousands say the so-called science behind it is flawed and inaccurate.
Even the e-mails discovered from global warming proponents saying they had made up some of their data supporting man-made global warming hasn't stopped the fanatical true believers from continuing to spew their unprovable assertions.
As a matter of fact, data show the earth has been cooling for over a decade, and will probably be entering into a much colder period of time than it has been even recently.
One way or the other there will be delivery terminals for coal to Asia, as the demand will be there for decades, and it would be irresponsible not to meet that demand with American coal.
As for Arch Coal, Cloud Peak Energy and Peabody Energy, they will be among the top beneficiaries of a coal-exporting terminal in the short term, which would probably attract much more investment to meet the energy needs of Asia.
Cloud Peak Energy closed Friday at $23.66, down $0.52, or 2.15 percent. Peabody Energy closed at $63.48, down $1.31, or 2.02 percent. Arch Coal closed Friday at $33.50, down $0.48, or 1.41 percent.
Showing posts with label Coal Supply. Show all posts
Showing posts with label Coal Supply. Show all posts
Monday, February 7, 2011
Monday, December 6, 2010
Rio Tinto (NYSE:RIO), Walter Energy (NYSE:WLT) Continue Coal M&A Trend
With demand for coal continuing to rise, led by China and India, a large number of mergers and acquisitions have bee taking place, with 34 underwritings in the sector in November alone, with Rio Tinto (NYSE:RIO) and Walter Energy (NYSE:WLT) part of bigger deals.
FBR commented, "We came back from our Australia trip very bullish on the coal space due to very active and high risk underwriting activity in November (34 underwritings in the mining space). We believed that M&A trends would accelerate as these underwritings were underpinned by projects that had 2-5 year production pipelines behind them. Several of the companies we met with are being or potentially being taken out (Caledon, Riversdale, and Whitehaven). The Chinese and Indians are fueling much of this action, driven by a scarcity factor. The US coal market continues to be impacted by rising environmental rules and regulation; the emerging markets are truly the place to be for investors. Our thesis remains bullish for US steam coal exports to drive rising US coal prices but the domestic market remains challenged by pending Transport rules and other rising EPA regulation. We expect every US company to raise its export focus and grab as much port capacity to capitalize the rest of the world's need for coal."
Rio Tinto was trading at $70.25, up by $0.18, or 0.26 percent. Walter Energy was at $113.93, gaining $3.43, or 3.10 percent.
FBR commented, "We came back from our Australia trip very bullish on the coal space due to very active and high risk underwriting activity in November (34 underwritings in the mining space). We believed that M&A trends would accelerate as these underwritings were underpinned by projects that had 2-5 year production pipelines behind them. Several of the companies we met with are being or potentially being taken out (Caledon, Riversdale, and Whitehaven). The Chinese and Indians are fueling much of this action, driven by a scarcity factor. The US coal market continues to be impacted by rising environmental rules and regulation; the emerging markets are truly the place to be for investors. Our thesis remains bullish for US steam coal exports to drive rising US coal prices but the domestic market remains challenged by pending Transport rules and other rising EPA regulation. We expect every US company to raise its export focus and grab as much port capacity to capitalize the rest of the world's need for coal."
Rio Tinto was trading at $70.25, up by $0.18, or 0.26 percent. Walter Energy was at $113.93, gaining $3.43, or 3.10 percent.
Tuesday, November 23, 2010
Massey (NYSE:MEE) Announces Official Sale Process Launched
Massey Energy's (NYSE:MEE) board of directors announced Monday they've began an official sales process, although there are no guarantees at this time the company will be sold and no targeted date to get the job done.
FBR said, "Last night after the close, Massey board announced an official sale process with no timetable set and guarantee of a sale. We had downgraded the stock yesterday morning due to limited upside for new MEE buyers and upside capped due to Friday evenings new PPOV list released (with more to come). We also believe that the company would be successful in a sale process and that's why we raised our target price as well.
"We believe the met coal is very tight and known but believe the steam coal prices are poised to rise, as Chinese and other international steam coal prices have been rising, Newcastle ships queues lengthen. After a lackluster steam export year, we expect the stage is set for 2011 US steam coal exports will rise meaningfully and US utilities will have to search other basins to contract coal in 2H11. The coal stocks have performed very well over the past four months driven by a solid broader market (QE2), rising met and steam coal prices, and increased consolidation activity. Our trip to Australia highlighted the high pace of financing activity sponsored by Indian and Chinese coal buyers trying to bridge the expected coal shortfall over the next 3-5 years."
Massey is trading at $49.11, dropping $1.41, or 2.79 percent at 11:57 AM EST.
FBR said, "Last night after the close, Massey board announced an official sale process with no timetable set and guarantee of a sale. We had downgraded the stock yesterday morning due to limited upside for new MEE buyers and upside capped due to Friday evenings new PPOV list released (with more to come). We also believe that the company would be successful in a sale process and that's why we raised our target price as well.
"We believe the met coal is very tight and known but believe the steam coal prices are poised to rise, as Chinese and other international steam coal prices have been rising, Newcastle ships queues lengthen. After a lackluster steam export year, we expect the stage is set for 2011 US steam coal exports will rise meaningfully and US utilities will have to search other basins to contract coal in 2H11. The coal stocks have performed very well over the past four months driven by a solid broader market (QE2), rising met and steam coal prices, and increased consolidation activity. Our trip to Australia highlighted the high pace of financing activity sponsored by Indian and Chinese coal buyers trying to bridge the expected coal shortfall over the next 3-5 years."
Massey is trading at $49.11, dropping $1.41, or 2.79 percent at 11:57 AM EST.
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