Presentation is loading. Please wait.

Presentation is loading. Please wait.

International Coal Scene at Mid-2011 Donald K. Cooper Global Director of Coal Services Behre Dolbear Group, Inc. Society of Mining Engineers - NYC – 10.

Similar presentations


Presentation on theme: "International Coal Scene at Mid-2011 Donald K. Cooper Global Director of Coal Services Behre Dolbear Group, Inc. Society of Mining Engineers - NYC – 10."— Presentation transcript:

1 International Coal Scene at Mid-2011 Donald K. Cooper Global Director of Coal Services Behre Dolbear Group, Inc. Society of Mining Engineers - NYC – 10 May 2011 “We Know the Business of Mining”

2 B EHRE D OLBEAR This Evening’s Presentation  2011 “Coal Industry Lite”  Describe Behre Dolbear and its coal segment  Provide 35,000-ft. view of the industry  Global production and consumption  Markets  Industry trends  Recap some recent Behre Dolbear engagements  Provide a few country “factoids”

3 B EHRE D OLBEAR The Behre Dolbear Group  Since 1911 – oldest mining consultancy on the globe  Started here in New York  Offices in eleven of the world’s most important cities  Full range of:  Services  Mineral commodities  Locations  Client types

4 B EHRE D OLBEAR Behre Dolbear Coal Professionals  15 Senior Associates and Consultants – pure coal  Almost 500 Man-years of commercial experience  Former industry executives – not “consultants”  All disciplines of the industry  Coal experience spans the spectrums:  Peat to anthracite  UK and Germany to Mozambique and Mongolia  Surface–Underground–CBM–Gasification-Coal Waste

5 B EHRE D OLBEAR Typical Coal Engagements  Exploration program management  Scoping, prefeasibility and feasibility studies  Resource and reserve re-categorizations  Advisories to regulatory agencies and exchanges  HKEx, SEC, TMX, DOJ, IRS, MSHA, BLM, etc.  Independent technical reports to support IPOs/POs

6 B EHRE D OLBEAR Typical Coal Engagements (cont.)  Merger and acquisition support  Due diligence  Valuations (and evaluations)  Governmental assistance  Privatization/Monetization  Mining regulations  Litigation assistance and expert witness work

7 B EHRE D OLBEAR Let’s Look at the Industry

8 B EHRE D OLBEAR Corporate Growth Objective Where is Coal Found? World Coal Association – April 2011

9 B EHRE D OLBEAR Production

10 B EHRE D OLBEAR How Do We Mine It?

11 B EHRE D OLBEAR World Coal Production  Found in ±100 Countries (35 are “Producers”)  “Reserves” for ±190 Years (±1.4 Trillion Tonnes)  2010 Global production = ±7.4 Billion Tonnes*  EXACTLY HOW MUCH COAL IS THAT? *Various early estimates: ±2 or 3%

12 B EHRE D OLBEAR It’s a Long Trainload!

13 B EHRE D OLBEAR Exactly How Long is That Train?  It’s a train that wraps the earth ±18 times OR  One that stretches to the moon and back (almost)

14 B EHRE D OLBEAR That’s a Very Long Trainload!

15 B EHRE D OLBEAR Top Six Global Coal Producers – 2010*  China3,680 Million  USA1,000 Million  India 580 Million  Australia 410 Million  Indonesia 350 Million  Russian Fed. 300 Million *Early Approximations - Various Sources (±2 or 3%)

16 B EHRE D OLBEAR Consumption

17 B EHRE D OLBEAR

18

19

20

21 Global Steel Consumption

22 B EHRE D OLBEAR

23

24 MARKETS - PRICING Why Doesn’t Behre Dolbear do Independent Price Forecasting? (Because it makes us look too much like blindfolded drunks throwing darts!)

25 B EHRE D OLBEAR *Australian Benchmark Prices

26 B EHRE D OLBEAR

27

28 Is There a Lesson Here?  Rely less on prognostication and crystal balls  Give weight to historical cost-price relationships  Consider average long-term trends in pricing  Be sure to do some healthy sensitivity analysis

29 B EHRE D OLBEAR Current “Contract” Coal Prices (1)  Hard Coking Coal:US$320 to US$350 per T (2)  Soft Coking Coal:US$240 to US$265 per T (2)  Thermal Coal:US$130 to US$140 per T (Forecasts made recently as Dec-2010 have gone bust) (1) NOW “Quarterly” Australian Benchmark (2) ±35% to 45% increase QoQ

30 B EHRE D OLBEAR Global Coal Movements – 2010* *Generalized - Annualized

31 B EHRE D OLBEAR

32 Recent Coal-Related Engagements  Australia  Botswana  Brazil  Canada  China  Colombia  Germany  India  Indonesia   Mexico   Mongolia   Mozambique   New Zealand   Nigeria   Philippines   Russia   USA   Vietnam

33 B EHRE D OLBEAR Australia  BD doing its standard mix out of Sydney office  Major news – Q’land flood impacts remain  Still expected to be major export powerhouse  Long-term challenges from  Indonesian thermal coal  Mozambique met coal  (Australian taxation fever is not helping much)

34 B EHRE D OLBEAR China  Currently the 2400 lb. gorilla on the globe  Closing hundreds of mines - still @ 17% growth  Word of some areas being declared “Rare” coal  Steel glut inhibiting met coal usage (short-term)  Behre Dolbear doing numerous:  Independent Technical Reviews to support IPOs  Due diligence and evaluations  Valuations and M/A assistance

35 B EHRE D OLBEAR Colombia  BD doing scoping studies and project due diligence  Two tiered industry by geography  Traditional thermal coal in Guajira peninsula  (Potential) met coal in Boyaca, Cundinamarca, etc.  Proving up significant met coal resources  Steeply dipping / difficult to mine  Excellent coking characteristics  Infrastructure and transport are near-term constraints

36 B EHRE D OLBEAR India  Population forecasted to overtake China’s by 2030  Tremendous demand growth  “Ultra-Mega” steel producing projects underway  Generally poor quality indigenous met coal supplies  Outsourcing coal supplies all over the globe  Equity and JV deals abound – steel and power companies  Strong looks at Indonesia, Mozambique, USA, etc.  BD currently doing Mozambique met resource reviews

37 B EHRE D OLBEAR India Will Be (Is?) World’s Largest Coal Importer World Coal Institute

38 B EHRE D OLBEAR Indonesia  Forecast to be world’s fastest growing exporter  Perhaps largest CAPEX increase for coal mines  Sub-bituminous thermal coals, but:  Famous for ultra-low sulfur content  Geographically well positioned for Oceana-Asia sales  BD doing numerous green field evaluations  BD did share valuation to support major litigation

39 B EHRE D OLBEAR Mongolia  Burgeoning energy producer  YTD 2011 coal export value up 180% (YoY)  YTD 2011 = 3.8 million T vs. 2.3 million T (YoY)  Major low-cost surface mining projects  Infrastructure and transportation are issues  BD doing a number of scoping level studies  Just established a Mongolian subsidiary

40 B EHRE D OLBEAR Mozambique  Major attention - new coking coal sources – all export  Major international players in Tete region  Moatize - - Vale  Riversdale - - Rio Tinto/Tata/CSN  Challenges: coal quality and transport (Sena RR)  Operators forecasting growth to 80 MTPY ! !  Concerns about infrastructure, lead time and ramp-up  BD did full-scale review of Moatize for TWB/IFC

41 B EHRE D OLBEAR Nigeria  BD has worked in Nigeria since early 1990’s  Comprehensive mineral inventory  US TDA coal resource and power demand study  Prefeasibility study for small surface mine  Currently in-country mine development advisors  30-year hiatus since demise of NNCC  Finally looking at coal for electricity generation  Woefully inadequate power grid

42 B EHRE D OLBEAR Vietnam  VINACOMIN  BD did ITR for Issuance of High-Yield Bonds  Forecasting 50% increase in annual production

43 B EHRE D OLBEAR Thanks for Your Attention Questions?


Download ppt "International Coal Scene at Mid-2011 Donald K. Cooper Global Director of Coal Services Behre Dolbear Group, Inc. Society of Mining Engineers - NYC – 10."

Similar presentations


Ads by Google