The Asian Coal “Battle Royale”

India’s coal firms are fighting each other for overseas supply.

Reports today show that Indian major Jindal Steel and Power has taken up 31.5% in rival Gujarat NRE’s Australian coal assets.

Gujarat controls two coal Australian coal mines with over 650 million tonnes of resource. The assets are owned through an Australian subsidiary–which Jindal is buying control of through a hostile bid.

This is a sign of the times. India’s coal imports are rising. Competing with China’s ravenous import demand, which rose 30% last year.

And this head-to-head match recently became a “battle royale”. With Japan announcing its top power utilities will increase coal use by nearly a quarter next year.

This is a lot of Asian coal demand. With limited supplies to meet it. America is exporting more coal–but shipping it to Asia costs 4 or 5 times as much as supply sent from Indonesia or Australia. South Africa, another major Asian supplier, is facing down a crisis in its mining sector.

Good coal projects in places near (or semi-near) to Asia are going to be in demand. Indonesia and Australia will be “go-to” spots. But importing nations will likely need more.

Anyone with an answer is going to do well over the next couple of years.

Here’s to winning the battle,

Dave Forest

dforest@piercepoints.com

 

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