Small Canadian Coal miners marching on up
While many American counterparts are selling for 10+ billion, there are Canadian coal miners selling for just 1+ billion like GCE.to or symbol gachf.pk in USA.
Press Release Source: The Bedford Report On Friday November 26, 2010, 11:25 am EST
NEW YORK, NY--(Marketwire - 11/26/10) - In the past month several companies in the coal market have become the subject of Merger and Acquisition speculation. As companies get larger and experience diminishing returns in their core business, they are showing their willingness to utilize their large resource pools to acquire smaller companies in a race to diversify themselves. Given the limited opportunities for meaningful acquisitions, the companies in stronger financial positions, and the willingness to act, stand to gain the most from such activities. The Bedford Report examines the outlook for companies in the surging coal market and provides research reports on Cline Mining Corporation (TSX:CMK - News) and Grande Cache Coal Corp. (TSX:GCE - News). Access to the full company reports can be found at:
This month an official with the China's coal association said the country's demand for coal will continue to increase in the next five years and is expected to reach 3.8 billion tons in 2015. The surprising surge in coal demand has sent coal prices up to two years highs and brought upon a wave M&A speculation.
Canadian Coal companies have been in the spotlight after Walter Energy offered to buy Western Coal Corporation for $3.2 billion. If deal talks are successful, Brean Murray Carret & Co analysts say that the combined firm will be one of the world's biggest providers of metallurgical coal. Walter Energy expressed interest in increasing its access to coal as the company has forecast over 50 percent growth in global steel output in the next decade, boosting consumption of coking coal.
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The news sent the Canadian miners Grade Cache and Cline Mining surging amidst speculation they could also be up for acquisition. A recent report by Reuters states that Grande Cache and Cline together have reserves of about 750 million tons of steelmaking coal, almost double the reserves being touted by the Walter-Western combine.
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