How Coal Shortages in China Will Spark More Foreign Takeovers of U.S. Assets

[jpak]

http://www.moneymorning.com/2008/07/21/how-coal-shortages-in-china-will-spark-more-foreign-takeovers-of-u.s.-assets/

The recent buyout of Alpha Natural Resources Inc. (ANR) by Cleveland Cliffs Inc. (CLF) could ignite more than $50 billion worth of M&A deals in the U.S. coal industry over the next few years as Mainland China rushes to solve a major energy shortfall.

"In the next 12 months there will be an unprecedented amount of both domestic and cross-border mergers and acquisitions," Wilbur Ross, chairman of International Coal Group Inc. (ICO), told Bloomberg News. "U.S. reserves are undervalued relative to those in the rest of the world."

Ross, the billionaire investor who helped consolidate the U.S. coal and steel industries, considers this the start of a round of mergers that will prove Cleveland-Cliffs prescient in its Alpha bid.

The top eight U.S. coal producers, which are worth more than $50 billion, are possible takeover targets for a country desperate for resources. And compared with China, American coal companies are bargains.

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[fasttense]

1. So they will buy it here and take to it to China to use.

Strip mine and destroy our rivers while they take the natural resource away. Leave behind a mess for us to clean up and even the profits leave the country.

This really works well for the corporations, not so well for the US.

[theoldman]

2. I don't see how it could be economically feasible to ship US

coal to China. However I can understand China buying US coal companies not for the coal but for the profits.

[newfie11]

3. China has been buying Canadian coal for some time