The hottest story is about energy going out and Sh

  • Detail

Talking about energy going out: Shenhua and Yankuang "mining coal" in Australia

referring to the classic case of coal mergers and acquisitions, everyone will think of the vigorous but controversial "cross-border love" between Yanzhou Coal and Felix, an Australian coal enterprise. In the past two years, Yankuang's 1/4 profit came from the opening of Australia's investment mold. If there are restrictions, the fact that it should also be marked on the mold responds to the voice of "not optimistic" in those years, and also draws the attention of coal and energy people to the Australian mainland in the southern hemisphere and the location of Felix, Australia's largest coal producing state - New South Wales

two ways of Shenhua and Yankuang entering Australia

China Energy News: Australia is one of the world's largest coal exporters, and Xinzhou is Australia's largest coal producing state. How rich are Xinzhou's coal resources

hatch: New South Wales is Australia's largest coal export state, with a known proven reserve of 12 billion tons. In addition, Shenhua, a coal enterprise from China, is conducting large-scale exploration, and their work will increase the state's proven reserves on the basis of 12 billion tons. According to the data in 2009, NSW accounted for 41% of Australia's coal exports. At the same time, the data from 2009 to 2010 fiscal year showed that the total output value of minerals in Xinzhou was 17 billion Australian dollars, of which coal accounted for about 80%. Among the 145.4 million tons of marketable coal production in Xinzhou, 81.1 million tons of thermal coal and 28.8 million tons of coking coal were exported. In recent years, Xinzhou's coal exports have been on the rise, mainly due to the increased demand for coal from China, India and South Korea. In the past year, the coal exports of Xinzhou to China, India and South Korea increased by 130%, 13% and 6% respectively

China Energy News: we know that you have met with relevant people of Shenhua Group and Yanzhou coal industry in China this time. Can you tell us about the meeting

hatch: Chinese enterprises in Australia abide by local laws, respect local culture, and bid farewell to citizens. First of all, I came to China to thank them for the employment opportunities created by their investment in Australia; Second, I also hope Chinese enterprises can increase their investment in Australia. China's investment in Australia, especially in resources and minerals, can be traced back to 150 years ago, when Chinese people invested in gold mines in Victoria. Now China is the first trading partner and the largest market for Australia. We hope that both sides can deepen cooperation and achieve mutual benefit and win-win results

Shenhua only had a prospecting license in Xinzhou before. We just renewed Shenhua's license last month. Currently, we are communicating with Shenhua about the renewal and waiting for Shenhua to accept it. So far, Shenhua has invested 309 million Australian dollars in exploration alone. If it continues to invest in coal development, Shenhua will invest billions of Australian dollars, so that Shenhua's project in Australia will become the company's largest overseas project

Yankuang has begun to develop coal resources in Xinzhou and is currently planning to invest an additional $1.4 billion. Yankuang not only invests in coal mining, but also in infrastructure construction. For example, Yankuang is one of the developers of Newcastle port in New South Wales, the world's largest coal export port, and they have an equity stake in a wharf in the port. The construction cost of the wharf is huge. Two wharves have been built in Newcastle port, and two are waiting to be expanded

China Energy News: what is the process of cooperation between government and enterprises in the cooperation between Shenhua and Yankuang

hatch: Shenhua and Yankuang have different paths. In the bidding of several coal blocks by the previous government, Shenhua delivered a letter of intent, and then obtained the license issued by the former government. Yankuang directly acquired Felix, which has been established, and obtained the permission of the former government. Here I want to explain that the New South Wales Government has just changed in March this year

localization of Yankuang

China Energy News: can you introduce Felix company invested by Yankuang in New South Wales? Especially about the listing of the company

hatch: according to the promise made by Yankuang when acquiring Felix, Felix will be listed on the Sydney stock exchange next year. More details need to be disclosed by Yankuang. We will try our best to support and help, but the specific schedule and financing regulations, the left end of which is a rotatable collet die, need to be announced by Yankuang and the Foreign Investment Review Committee

China Energy News: you just mentioned that Yankuang also invested in the wharf. Was Yankuang's participation in infrastructure a package cooperation with mining

hatch: not a package cooperation agreement. We didn't ask Yankuang to do that. The investment project was decided by the company itself. Of course, we also have some requirements, such as increasing the number of skilled workers and the number of Aboriginal employees in Australia in the future. 2% of the Australian population is aboriginal, and the unemployment rate of this part of the population is very high. We hope to help them. However, this is not compulsory, but voluntary. It is an aspect of enterprises' social performance

China Energy News: fulfill the social responsibility

Haqi: Yes, Yankuang is already carrying out a project to train indigenous people, which is entirely voluntary

China Energy News: what is the incentive

hatch: be a good citizen, so that the government will be happy to contact you, and enterprises can better integrate into the local society

China Energy News: what about hiring local employees? Is there a mandatory requirement to employ local citizens in Australia

hatch: the regulations for employees are more the requirements of the immigration law. Only those who master the skills required by the government can work in Australia, which should be lacking in Australia. This requirement is not unique to Australia. It is true in many countries around the world

China Energy News: I heard that Yankuang has promoted the technological innovation of local coal mining in Xinzhou. Can you give me a detailed introduction

Haqi: Yankuang has many excellent mining technologies. 2. It is not allowed to use small-diameter tools to bend large-diameter steel bars. I believe there are many such technologies in China, such as high mining height fully mechanized top coal caving mining, which can improve the working area and mining volume. In general, Germany, Japan, the United States and China are our four major technology importers. The United States and Germany have rich experience. The two countries are very advanced in electronic engineering technology, Japan is very advanced in computer technology, and China has strong integration ability and rich imagination. China is now a high-tech country and a very important partner of Australia

China Energy News: the promotion of new technologies requires advanced equipment. Where did Yankuang purchase its fully mechanized mining equipment

hatch: all coal mining machinery are imported from China and have Chinese patents. They are registered in Australia and applied in New South Wales

in a ten-year plan, resources will increase by 30%

China Energy News: this year, Mongolia surpassed Australia to become China's largest coking coal supplier. In terms of coal supply, Mongolia has become a strong competitor of Australia. What do you think

hatch: indeed. However, it is worth noting that Mongolia's exports to China exceed Australia's coking coal produced in Queensland, while in terms of thermal coal rich in Xinzhou, Mongolia has not surpassed us. For Australia, Mongolia is a strong competitor for coking coal exports, while Indonesia and Colombia are strong competitors for thermal coal exports. In the era of trade globalization, we need to improve our competitiveness to stand out from the competition. We did. Because we are politically stable, there is no sovereignty crisis, the quality of labor force is high, the infrastructure construction is perfect, and there are railways and ports. So we have advantages over other countries, but Chinese companies, like many other companies, are willing to buy the cheapest products in the international market, and trade globalization also provides them with this possibility. So we want to do the best, and we are determined to do the best. In addition, Mongolia has regional advantages over Australia. The two countries are adjacent and have a relatively convenient railway system, which also requires us to reflect our advantages in pricing

China Energy News: besides coal mines, what are the investment opportunities in the energy sector in Xinzhou

hatch: now our natural gas industry is rising, which also brings a lot of investment opportunities. We have 16 trillion cubic meters of natural gas reserves, which is enough to be exploited for 250 years. This reserves is even much higher than that of Turkmenistan, a gas producing country

China Energy News: do you have any plans for gas production

hatch: at present, we are formulating the natural gas access standards of the state government. Once the standards are formulated, we will invite companies all over the world to share the cake of NSW natural gas. Now we mainly focus on the overall planning and the impact on the environment, water resources and agriculture. Because the smmi index of coal seams representing the domestic market closed at 2116, the gas occurrence areas are all in fertile agricultural land. When considering gas extraction, food security and sustained and stable production of agricultural land should also be taken into account

China Energy News: we learned from the local area that there seems to be some different opinions on the development of coalbed methane

hatch: Yes, that's why we set standards. People can ask questions if they have any

China Energy News: is there a timetable for the release of access standards? What are the basic principles for formulating access standards? What impact will it have on investors

hatch: we hope that the formulation of access standards can be completed next year. The basic principle is to protect groundwater, farmland and biodiversity. Specifically, we prohibit the use of chemical benzene and strictly control the application of hydraulic fracturing. Note that the expression of hydraulic fracturing method is control rather than prohibition. We hope to improve it on the basis of international standards

China Energy News: is there a plan for the overall energy development

hatch: last month, the ten-year plan of Xinzhou was just announced. We plan to increase the exploitation of resources by 30% within ten years. From our base, this amount is very large. Around this plan, Xinzhou is carrying out the work of attracting investment

China Energy News: many investors are very concerned about the carbon tax that has been passed in Australia and the resource lease tax that is under consideration. Can you tell us about the current resource tax system in New Jersey

hatch: the taxes that mining owners in New Jersey need to pay mainly include federal taxes and state royalties. I mainly introduce the latter

as the law of Xinzhou stipulates that the resources and minerals of Xinzhou are owned by the local people, the companies developing minerals here need to pay this royalty to the local government to benefit the people. Royalties are levied ad valorem. Taking coal as an example, 8% royalties are accrued for open-pit coal mines and 7% royalties are accrued for underground mines. For non coal resources, the tax rate is about 4%

China Energy News: to what extent will the carbon tax affect the cost of investors? What are the prospects for the passage of the resource lease tax

hatch: at present, the carbon tax is only targeted at iron ore and coal mining companies with an annual profit of more than $50million, so the impact is limited. The resource tax has passed the parliamentary vote. However, I want to say that even if the resource lease tax is passed, if the opposition comes to power, it will still be abolished together with the carbon tax. Considering that the leader of the opposition party is far ahead in the polls for the general election in October 2013, this possibility is very high, and this is undoubtedly true for Australian mineral investors

Copyright © 2011 JIN SHI