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Coal price hike to weaken asset procurements, says TerraCom


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Coal price hike to weaken asset procurements, says TerraCom

Australia-listedminer TerraCom Ltd.says the recent spikein global coal prices is resulting in weakened asset procurements in the sector,Reuters reported Sept. 27.

Accordingto Terracom, rallying coal prices imply that mines producing the commodity arealso becoming more costly. "There would have been more (industry wide)M&A activity if the price had stayed low a bit longer," the reportquoted Cameron McRae, the company's chairman, as saying.

S&PGlobal Market Intelligence data shows that international alone from January 2015through April of this year totaled $1.23 billion.

Terracomaims to produce coking coal in Mongolia and Indonesia. Traders on Sept. 27quoted spot prices of around $206 per tonne, the report said.

Thecoal price rebound has been largely attributed to China's regulated domesticproduction and increasing imports, as well as to a series of which recently took place inAustralia.

China'scoking coal importssurged 60% year over year to about 6.5 million tonnes in August, according to Nikkei Asian Review's Sept. 27 report.

Floodingcaused by El Nino, creating delivery issues, also prompted coal prices tobolster, according to the publication.