Chinese firm expresses interest in acquiring CoAL shares

Accordingly to  Creamer Media Reporter and miningweekly, Junior miner Coal of Africa Limited (CoAL) has acknowledged that a subsidiary of Beijing Haohua Energy Resource Company, which is listed on the Shanghai Stock Exchange, intends to acquire up to 215-million shares in CoAL at 5.5p a share.

The coal miner reiterated that its ability to continue as a going concern and to pay its debts as and when they were due was dependent on, besides other things, obtaining additional funding from either financial institutions or the equity markets to meet its planned commitments.

CoAL was in discussions with a number of parties, including strategic investors, regarding a possible capital-raising.

The company emphasised, however, that no binding agreements had been entered into yet.

In 2012, CoAL had agreed to a $100-million placement deal with Beijing Haohua Energy Resources subsidiary Haohua Energy International.

Asian seaborne spot coking coal prices hold steady amid thin trade

Ample supplies of coking coal in the Asian spot markets amid steady demand saw seaborne prices unchanged on Tuesday August 19.

"Suppliers want to push up prices but import cargoes are plentiful and there's plenty of domestic supply on offer," a Chinese trader stated.

Top brand premium hard coking coal was reported to have been offered by Australian producers at $124-125 per tonne cfr China, with tradable levels given as $121-122 per tonne cfr.

Sources said that the spread between bids and offers for second-tier hard coking coals was widening in the face of plentiful supply.

BHP Billiton, one of the world's largest producers of coking coal, announced on Tuesday that it planned to de-merge its iron ore and most of its coking coal businesses from its manganese, silver and aluminium operations. The miner will spin off its Illawarra coking coal mine amid its non-ferrous non-core businesses, it said.

Steel First's premium hard coking coal index for material sold on a cfr Jingtang basis was calculated at $121.23 per tonne, down $0.08 per tonne for the day. The cfr Jingtang hard coking coal index edged up by $0.03 per tonne to $105.35 per tonne.

Both fob Australia hard coking coal indices were unchanged. The fob Australia hard coking coal index was at $97.24 per tonne while that for premium materials was at $115.70 per tonne fob.

On the Dalian Commodity Exchange, the most-traded January coking coal futures contract closed 4 yuan ($1) per tonne higher at 796 yuan ($129) per tonne on Tuesday, while the most-traded January coke contract also closed 8 yuan ($1) per tonne higher at 1,105 yuan ($180) per tonne.

The yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of about 35 yuan ($6) per tonne.

Glencore cuts another 100 jobs at Newlands coal operations

Commodities giant Glencore has slashed a further 100 jobs from its Newlands coal operations in Australia, the company said on Tuesday August 12.

The decision was taken as a result of "ongoing difficult market conditions", it said.

"Newlands' annual coal production for 2014 will be reduced as a result of this," Glencore said, but did not give details about how it was expected to fall.

The job losses comprise the second round of cuts Glencore has imposed in the past two years on its Newlands operations, which produces both coking coal and thermal coal.

Last June, the trading and mining major reduced the extent of its open-cut operations at Newlands from three mining areas to one, affecting around 300 employees.

The Newlands mining complex will continue to support a workforce of more than 650 employees after the latest round of cuts, Glencore said.

It continued to review all its coal operations in an "increasingly difficult economic climate", it added.

Coking coal prices have slumped over the past year to levels at which many producers are struggling to survive.

Steel First's premium hard coking coal index fell from more than $130 per tonne fob Australia's DBCT port at the beginning of 2014, to lows close to $95 per tonne in the second week of August.

The low pricing climate has seen a number of producers choose to close coal mines or sell coal assets in the past six months.

Rio Tinto agreed the sale of its Mozambique coal operations to Indian consortium International Coal Ventures Ltd (ICVL) at the end of last month for $50 million, a fraction of the $3.7 billion the major paid for the project in 2011.

And US coal major Peabody Energy lowered the coking coal production rate and sales target from its Burton mine on August 5, citing poor market conditions.