yancoal has a $1b war chest for acquisitions

I'm not sure if Yancoal is interested in COK, but can be a possibility. I think a cheaper WHC is more like on the cards for Yancoal though, or AZT.

Yancoal's $1bn war chest to buy more mines

by: Elisabeth Behrmann
From: The Australian
September 30, 2011 12:00AM

YANCOAL Australia, a unit of China's fourth-largest coal producer, Yanzhou Coal Mining, may spend more than $1 billion buying more mines in Australia as the global market turmoil makes assets cheaper.
"We would consider large takeovers (more than $1bn)," Yancoal's managing director, Murray Bailey, said yesterday.

Yancoal, which bought Felix Resources for $3.1bn in 2009, has agreed in the past two months to spend another $500 million buying assets in Australia, the world's biggest exporter of the fuel.

The value of mining companies globally has dropped 30 per cent from an April high, according to the Bloomberg World Mining index, as market turmoil threatens to slow growth and reduce raw-material demand.

"If the market stays like this for a period of time, you could certainly see people look at their projects and decide they're better off selling some of those," Investec Bank Australia resources analyst Colin McLelland said.

Whitehaven Coal and assets of Bandanna Energy might be targets, he said.

There has been $32.4bn worth of coal deals announced this year.

Coal prices have risen as a result of rising demand to feed power stations and steel mills in China, the world's largest user of coal, and global production disruptions, including those from the Queensland floods.

Mr Bailey said market conditions were creating potential opportunities and the company would consider both developed and undeveloped assets in Australia, including either thermal or steelmaking coal.

"There are some opportunities there with companies that are sitting on resources that may not have the capacity to fund their development," he said.

"There are also some producers that might want to be approached."

Yanzhou agreed this week to buy Wesfarmers' Premier Coal mine in Western Australia for $297m, after purchasing Australian coal developer Syntech Resources for $202.5m last month.

The sale price for Premier Coal was broadly in line with Deutsche Bank's valuation of $330m, analysts said.

The deal, subject to regulatory approval, implied an enterprise value to reserves ratio of 2.2 times, less than the 3.3 ratio for the sale of nearby Griffin Coal Mining to India's Lanco Infratech, according to Deutsche.

Whitehaven, with a market value of $2.5bn, might also become a target for Yanzhou again, Mr McLelland said.

Yanzhou board secretary Zhang Baocai said in April that the company had looked at Whitehaven.

Whitehaven's biggest shareholders, First Reserve and AMCI International, sold 65 million shares last month, equivalent to 13.15 per cent of the company.

Whitehaven managing director Tony Haggarty said last month that the miner was not holding talks with interested parties for a takeover and a data room established after corporate interest had been closed since May.

Bandanna, which has put itself up for sale, says it has sold $101m in shares to help develop projects including a port and railroad.

It remains in talks with third parties.

Yancoal was considering listing on the Australian stock exchange and appointing an adviser, Mr Bailey said.

BLOOMBERG

http://www.theaustralian.com.au/business/mergers-acquisitions/yancoals-1bn-war-chest-to-buy-more-mines/story-fn91vdzj-1226152296343