Today, Peabody Energy (BTU) out with news it "hopes" to sign to develop a coal mine in China. Peabody has been one of my picks due to its exposure in Australia (which in turn means exposure to China) but this is the first news I've read of a frontal attack right within China. Looks like Peabody is turning in a global powerhouse. Other coal stocks are up in concert.
- Peabody Energy Corp., the world's biggest listed coal miner, is hoping to sign a deal in the next year to develop a coal mine in China, the world's biggest coal market, its top executive said. "We're very close," Peabody chairman and Chief Executive Gregory Boyce told a small group of reporters Wednesday. "If an opportunity is presented in the next 12 months or so, we're ready to sign."
- St. Louis-based Peabody is searching for a Chinese partner to develop an open-pit coal mine. Such mines cost hundreds of millions of dollars and can produce about 50 million tons of coal a year. Some smaller foreign firms have already announced deals to dig for coal in China.
- Chinese companies, including top coal miner China Shenhua Energy Co. and utility Huaneng Power International Inc., are considering teaming up with Peabody on projects within China, Mr. Boyce said. In exchange, Peabody would join forces with them internationally. Shenhua and Peabody are looking into investing in Mongolia or Australia but talks are in early stages, Mr. Boyce said.
- Peabody executives were in China for the signing of a previously announced $1 billion deal to build a power plant that would capture the greenhouse gasses produced and store them underground. The trapped carbon dioxide would be used to enhance oil recovery in nearby offshore fields. Peabody said Tuesday it has taken a 6% stake in the project, which is led by Huaneng and is set to have the first phase completed by 2009 in the northern coastal city of Tianjin.
- Soaring energy needs from emerging economies like India and China has mean coal consumption has been increase rapidly despite those worries. Countries and companies have been scrambling for a way to lessen the impact of burning coal. China relies on coal for more than 70% of its power, and will surpass the U.S. soon as the world's top emitter of greenhouse gasses.
- China's energy demands are starting to outstrip how fast it can develop its vast domestic coal fields. In the past year, China, a traditional coal exporter, has become a net importer, triggering a domino effect in international coal markets. India is now importing from South Africa, displacing Europe which is now looking to the U.S.
Long Peabody Energy in fund; no personal position
