coal junior under takeover speculation

for those interested in adding a junior coal explorer with significant upside potential it may prove a wise move taking the time to deep deeper into the BWN story.

with exploration currently underway at their tennements in the Bowen Basin in Queensland, hoping to uncover vast amounts of Coking/PCI/Thermal coal, so exploration news will be an ongoing for BWN over the short/medium term.

on top of the Bowen Basin exploration the company also holds a 50% interest in significant exploration ground in Indonesia (one of the worlds largest coal exporters)

but what really interested me in BWN was the speculated battle for control of the company, the following article was taken from the Australian today hinting at a possible takeover.


PURE SPECULATION: Robin Bromby | April 28, 2008
THERE aren't many cheap entries into the coal sector remaining. The big producers are trading on pretty hefty valuations, which is not surprising given what is happening to prices and demand.

Just as copper theft around the world has been a sign of the value of that metal, coal smuggling from Vietnam to China is now big business and one involving criminal gangs, showing just how scarce the commodity is becoming. The Vietnamese are concerned because they want to conserve resources as they build new coal-fired power plants.

But, while things are pricey at the producer end, there are a couple of juniors trading modestly.

One is Bowen Energy (BWN) and this has come to our notice because a Mauritius investment company, which represents Indian clients Savni Holding, has bought 13.3 per cent of Bowen on-market. India's Bhushan Steel already holds 10.2 per cent of the junior, along with a swag of options.

The timing is interesting because of the sense that a number of predators are circling the coal sector. Furthermore, Bowen is awaiting drill results from the South Blackwater coking coal project which neighbours the Blackwater mine operated by BHP Billiton (BHP).

Is Savni part of some blocking bid, a positioning to extract the best possible price should an Indian or even South Korean buyer make an offer? If the drilling results are as good as Bowen must be hoping, such a move could be triggered earlier rather than later.



With coal likely to remain a significantly hot sector thanks to supply constraints and rising demand, BWN is certainly well positioned to reward shareholders.

Remember China has only around 12 days coal supply left, prompting the likelyhood of further price increases going forward.