http://www.theaustralian.com.au/business/opinion/thermal-coal-loo...

http://www.theaustralian.com.au/business/opinion/thermal-coal-looms-as-a-hot-prospect/story-e6frg9ex-1226158184446

THERMAL coal ? that?s when the energy action is.

Foster Stockbroking analyst Craig Brown says in his latest note that the past three weeks have been an exciting time in the coal mergers and acquisitions space with three key transactions totalling just shy of $2 billion.

He says there is now a significant focus on thermal coal assets as opposed to metallurgical coal because of the rush to secure longer term electricity supplies.

India and other parts of Asia are looking to lock in thermal supply, hence India’s GVK buying Hancock Coal, Banpu buying Centennial Coal and then bidding for Hunnu Coal (HUN).

“We continue to remain positive on the long term demand for thermal coal and believe there is enough reason globally to expect thermal prices will continue to outperform,” said Brown.

Start of sidebar. Skip to end of sidebar.


End of sidebar. Return to start of sidebar.

Here are the top picks from Foster Stockbroking.

Their favoured producers are New Hope Coal (NHC) which will ramp up to 10 million tonnes a year, Whitehaven Coal (WHC) which has an aggressive expansion program and recently secured additional port capacity, and Cockatoo Coal (COK) which is seen as a potential takeover target and has some big players on the register including South Korea’s POSCO.

For companies in development, the picks are Aston Resources (AZT) which is aiming for 2013 production and is a potential takeover target, Coalspur Mines (CPL) which has a world-scale reserve in Alberta and low cash costs, and Nucoal Resources (NCR) which the potential as a long-term supplier of quality semi-soft thermal coal.

Down among the explorers, the preferred stocks are Guildford Coal (GUF) with its large asset base and is expecting an initial resource in Mongolia this month and MetroCoal (MTE) which now has a strategic Chinese investor on its register and a large resource in the Surat Basin.