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Peabody Energy Corp. Message Board

  • historyrepeats45 historyrepeats45 Aug 23, 2013 11:02 AM Flag

    Unocal

    Many of us remember China's bid for US Oil giant Unocal in 2005. Would the US fight off a similar bid for large US/Australian coal interests or hand it over as with Smithfield?

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    • It costs $1 million per mile to build electrical transmission infrastructure.....like 115kv lines.

      significantly less infrastructure can be build if one has significant quantities of localized base load generators..

      lots of small coal fired generators make for an ideal power grid....effectively distributes the grid and it becomes easy to control. Unlike wind which requires high tech control systems to control the large voltage swings in the grid, its easy to dispatch coal generation.

      Wind and solar also require significant transmission infrastructure sine the resource is seldom in the correct geographic location,

      if I were india with large portions of my population without electricity, I'd buy coal cause its too difficult to do nuke.....so coal is the best alternative.

    • Looks like India is on the prowl to acquire coal mines:

      "Like China, India's domestic energy policy's primary objective is to secure energy sources to meet the needs of its growing economy, as its energy consumption more than doubled between 1990 and 2011. The government, however, may not be able to deliver secure energy supplies to consistently meet demand because of fuel subsidies, increasing import dependency, and inconsistent reform of the country's bureaucratic ridden energy sector.

      A CIL official speaking on condition of anonymity said the most promising sites were in Australia, as the deposits there under consideration have a potential production of about 30 million tons per annum with scope for expansion, and that CIL officials have already been given access to the data room of the Australian mines. The properties are privately owned mines in East Australia, with one valued at $2.25 billion, and CIL is pursuing the possibility of establishing an equal joint venture.

      Besides Australia, CIL is also investigating possibilities in Indonesia and Colombia and is preparing to increase its funds available for developing the coal bloc it acquired in Mozambique in 2009.

      The issue of coal shortages is increasing for India, as the estimated shortage between supply and demand for 2013 of coal, including coking coal, is now projected at 265.5 million tons. In 2012, India imported 137 million tons of coal, the majority of which came from Indonesia, followed by Australia and South Africa.

      ================

      My Comment: One Half of $2.25 billion is a sizeable purchase. I'm not sure what would happen if China or India expressed interest in purchasing a U.S. coal miner. Lack of shipping ports for the coal is one issue. A government that is hostile to coal is another. But if China or India took the patient long-term view, they could purchase a mining outfit and wait for a new administration friendly to coal and willing to push for shipping ports on the west coast.

    • In my view, right now with this administration, they would hand it over.

      Sentiment: Buy

 
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