Obama’s War on Coal will decimate the lives of poorer Americans working in the mines. But not to worry Obama wants to replace them with green jobs for rich kids…
Coal
Article Index
Obama’s War on Coal Attacks All of Us
Now Is The Time to Buy These Oil Refiners and Coal Stocks
Without fail, every year there are January surprises.
They occur when investors receive a pop in selected stocks because of the way fund managers readjust their holdings to dress up their fourth quarter performance.
These improvements don't usually last very long.
In fact, most investors will see the affected stocks decline back to normal levels by mid- to late-January.
But for a few weeks, investors can earn a nice little return as the calendar begins the New Year. This hedge-fund effect will be of special interest to energy investors in 2013.
That's in stark contrast to last year when oil-related stocks were moving in one direction while natural gas stocks were moving in another. What's more, service companies were beginning to come off of their highs at this point in 2011, and King Coal was about to fall off a cliff of its own.
This time around, we have a fiscal cliff soap opera in the U.S., continuing credit concerns in Europe (although with a parallel rise in market optimism emerging on the continent), rising uncertainty again in the Middle East, and a simmering dispute between Japan and China.
In short, even ignoring the Mayans and their approaching December 21 deadline, there is no lack of concern in the market these days.
Still, there will be several beneficiaries in the energy sector as hedge fund managers make their moves over the next few weeks. This is likely to happen across several categories of companies.
In this case, investors would be wise emphasize two segments of the energy market that are currently on the rise: oil refineries and coal stocks.
They occur when investors receive a pop in selected stocks because of the way fund managers readjust their holdings to dress up their fourth quarter performance.
These improvements don't usually last very long.
In fact, most investors will see the affected stocks decline back to normal levels by mid- to late-January.
But for a few weeks, investors can earn a nice little return as the calendar begins the New Year. This hedge-fund effect will be of special interest to energy investors in 2013.
That's in stark contrast to last year when oil-related stocks were moving in one direction while natural gas stocks were moving in another. What's more, service companies were beginning to come off of their highs at this point in 2011, and King Coal was about to fall off a cliff of its own.
This time around, we have a fiscal cliff soap opera in the U.S., continuing credit concerns in Europe (although with a parallel rise in market optimism emerging on the continent), rising uncertainty again in the Middle East, and a simmering dispute between Japan and China.
In short, even ignoring the Mayans and their approaching December 21 deadline, there is no lack of concern in the market these days.
Still, there will be several beneficiaries in the energy sector as hedge fund managers make their moves over the next few weeks. This is likely to happen across several categories of companies.
In this case, investors would be wise emphasize two segments of the energy market that are currently on the rise: oil refineries and coal stocks.
To continue reading, please click here...
Three Glencore Xstrata Takeover Targets: TCK, AAL, FCX
The proposed mega-merger of Glencore International PLC and Xstrata PLC will create a global powerhouse with the potential to shake up the mining industry overnight.
If completed, the $90 billion deal will form a mining behemoth with control over one-third of the global market for thermal coal, and make it the world's largest producer of integrated zinc production. It will also rank as the world's third-largest copper producer and fourth-largest nickel producer.
Basically, the merger would create a super-giant that could compete with the industry's heavyweights - BHP Billiton Ltd. (NYSE ADR: BBL), Rio Tinto PLC (NYSE ADR: RIO), and Vale (NYSE ADR: VALE) - the mining industry's "Big Three."
The merger is certain to spark volatility in the sector, according to Money Morning Global Resources Specialist Peter Krauth, an expert in metals and mining stocks who runs the Global Resource Forecast investment service.
"What observers need to understand is consolidation like this concentrates decision making," Krauth said. "The fewer participants in an industry, the more impact they have.
When output is either increased or decreased by one or more mega producers, it will also have a larger impact on world supplies, and therefore prices."
With that kind of power, the Glencore-Xstrata deal will form a goliath with the appetite - and the muscle - to swallow its weaker rivals.
Plus, both companies are led by aggressive chief executives that have a history of snapping up competitors.
Xstrata has been racking up spectacular growth through acquisitions, although lately it has focused on organic or internal growth to boost production by 50% by 2014.
Glencore, a trader of metals, minerals and oil, has said the main idea behind going public after almost four decades as a private company was to grab acquisitions.
Of course, the new company would have more going for it than sheer size and a forceful management team.
Glencore has a giant global intelligence network of 2,000 employees in about 40 countries. Many of them are traders and marketers that collect extensive data on what commodity buyers want and when.
"Glencore's network makes the CIA look like your grandmother's coffee club," columnist Eric Reguly recently wrote in The Globe & Mail. "It has been adept at forecasting commodity prices based on intimate knowledge of production, demand, regulations, political whims, transport costs and movements everywhere."
Glencore's intelligence network will likely direct it to takeover targets that have iron ore resources, an area where Xstrata currently lacks exposure.
The industry's Big Three control nearly 70% of the one billion-ton annual iron ore seaborne trade, along with contract pricing. Lately they've been dampening prices by flooding the market with iron ore, driving high-cost producers out of the business.
But their mushrooming market shares have triggered more regulatory reviews by concerned governments. That should clear the way for the new Glencore Xstrata entity to target smaller competitors without the Big Three interfering.
If completed, the $90 billion deal will form a mining behemoth with control over one-third of the global market for thermal coal, and make it the world's largest producer of integrated zinc production. It will also rank as the world's third-largest copper producer and fourth-largest nickel producer.
Basically, the merger would create a super-giant that could compete with the industry's heavyweights - BHP Billiton Ltd. (NYSE ADR: BBL), Rio Tinto PLC (NYSE ADR: RIO), and Vale (NYSE ADR: VALE) - the mining industry's "Big Three."
The merger is certain to spark volatility in the sector, according to Money Morning Global Resources Specialist Peter Krauth, an expert in metals and mining stocks who runs the Global Resource Forecast investment service.
"What observers need to understand is consolidation like this concentrates decision making," Krauth said. "The fewer participants in an industry, the more impact they have.
When output is either increased or decreased by one or more mega producers, it will also have a larger impact on world supplies, and therefore prices."
With that kind of power, the Glencore-Xstrata deal will form a goliath with the appetite - and the muscle - to swallow its weaker rivals.
Glencore Xstrata: Hungry for Mergers
Based on estimated 2011 results compiled by Credit Suisse Group AG (NYSE ADR: CS), the new company would have revenue of $211.3 billion and net profit of $7.5 billion. That kind of clout would make its stock valuable currency for more acquisitions.Plus, both companies are led by aggressive chief executives that have a history of snapping up competitors.
Xstrata has been racking up spectacular growth through acquisitions, although lately it has focused on organic or internal growth to boost production by 50% by 2014.
Glencore, a trader of metals, minerals and oil, has said the main idea behind going public after almost four decades as a private company was to grab acquisitions.
Of course, the new company would have more going for it than sheer size and a forceful management team.
Glencore has a giant global intelligence network of 2,000 employees in about 40 countries. Many of them are traders and marketers that collect extensive data on what commodity buyers want and when.
"Glencore's network makes the CIA look like your grandmother's coffee club," columnist Eric Reguly recently wrote in The Globe & Mail. "It has been adept at forecasting commodity prices based on intimate knowledge of production, demand, regulations, political whims, transport costs and movements everywhere."
Glencore's intelligence network will likely direct it to takeover targets that have iron ore resources, an area where Xstrata currently lacks exposure.
The industry's Big Three control nearly 70% of the one billion-ton annual iron ore seaborne trade, along with contract pricing. Lately they've been dampening prices by flooding the market with iron ore, driving high-cost producers out of the business.
But their mushrooming market shares have triggered more regulatory reviews by concerned governments. That should clear the way for the new Glencore Xstrata entity to target smaller competitors without the Big Three interfering.
To continue reading, please click here...
Glencore International, Xstrata Could Make the Next Biggest Deal in Global Commodities
Commodities supplier Glencore International (PINK: GLCNF) could be on the cusp of a multibillion-dollar bet on commodities with mining company Xstrata PLC (PINK: XSRAF). Switzerland-based Xstrata announced today (Thursday) that Glencore approached the company for an all-share offer in a "merger of equals." Glencore already owns 34% of Xstrata and wants to buy the remaining […]
Bixby Energy Systems Catches China's Eye With Coal Processing Technology
As energy policies become more of a global financial and environmental concern, a clean energy company that can successfully develop "green" technologies will be at the forefront of the next energy industry investment wave.
A comment sent in from a Money Morning reader recently addressed a new coal processing technology developed by a U.S. company to make headlines this year.
A comment sent in from a Money Morning reader recently addressed a new coal processing technology developed by a U.S. company to make headlines this year.
China Traffic Jam Just a Brief Bottleneck on the Road to Growth
Besides recently being crowned the world's second-largest economy, China now has the dubious distinction of spawning the world's longest traffic jam. And it's all directly attributable to China's voracious appetite for energy and automobiles.
A line of cars and trucks 60 miles long (100 kilometers) has snarled the road along the Beijing-Tibet 110 Expressway for the past nine days.
The bumper-to-bumper gridlock, which finally began to ease yesterday (Wednesday), was created by a surge in trucks carrying coal from the province of Inner Mongolia to the suburbs of Beijing, where power plants continue to suck up and incinerate millions of tons of the black rock.
A line of cars and trucks 60 miles long (100 kilometers) has snarled the road along the Beijing-Tibet 110 Expressway for the past nine days.
The bumper-to-bumper gridlock, which finally began to ease yesterday (Wednesday), was created by a surge in trucks carrying coal from the province of Inner Mongolia to the suburbs of Beijing, where power plants continue to suck up and incinerate millions of tons of the black rock.
Cold-Weather Investing: Coal, Natural-Gas and Heating-Oil Investments Will Pack a Punch in January
The irony about cold-weather investing is that the biggest profits come to those who position their money during the hottest months of the year - even during the record heatwave Americans have been experiencing this year.
In short, now's the time to start thinking about such winter-related topics as heating bills, and such cold-weather investments as natural gas, heating oil and coal.
According to the American Petroleum Institute (API), natural gas provides heat for 55% of homes in the United States, followed by electricity, which warms 39%. Heating oil, propane and coal play only minor direct roles, although coal is used to fire 49% of America's electric generating plants, with another 20% fueled by natural gas.
That means natural gas is the natural choice of investors looking for winter-related profits - although Dr. Kent Moors, editor of Oil & Energy Investor newsletter and a frequent contributor to Money Morning, cautions that factors other than routine home-heating demand play a major role in setting prices.
In short, now's the time to start thinking about such winter-related topics as heating bills, and such cold-weather investments as natural gas, heating oil and coal.
According to the American Petroleum Institute (API), natural gas provides heat for 55% of homes in the United States, followed by electricity, which warms 39%. Heating oil, propane and coal play only minor direct roles, although coal is used to fire 49% of America's electric generating plants, with another 20% fueled by natural gas.
That means natural gas is the natural choice of investors looking for winter-related profits - although Dr. Kent Moors, editor of Oil & Energy Investor newsletter and a frequent contributor to Money Morning, cautions that factors other than routine home-heating demand play a major role in setting prices.
"A New Age in the History of Energy" as China Tops the U.S. in Consumption
China, powered by years of surging economic growth, is now the world's largest energy consumer, bumping the United States from the top spot for the first time in more than a century, according to new data from the International Energy Agency (IEA).
China consumed 2.25 billion tons of oil equivalent last year, or about 4% more than the United States, which burned through 2.17 billion tons of oil equivalent. China's total energy consumption was just half that of the United States a decade ago.
"The fact that China overtook the U.S. as the world's largest energy consumer symbolizes the start of a new age in the history of energy," IEA chief economist Fatih Birol told The Wall Street Journal. The United States had been the world's biggest overall energy consumer since the early 1900s, he said.
China was expected to become the biggest energy consumer in 2015, but the economic meltdown and green energy programs in the United States accelerated the transition, Birol said.
China consumed 2.25 billion tons of oil equivalent last year, or about 4% more than the United States, which burned through 2.17 billion tons of oil equivalent. China's total energy consumption was just half that of the United States a decade ago.
"The fact that China overtook the U.S. as the world's largest energy consumer symbolizes the start of a new age in the history of energy," IEA chief economist Fatih Birol told The Wall Street Journal. The United States had been the world's biggest overall energy consumer since the early 1900s, he said.
China was expected to become the biggest energy consumer in 2015, but the economic meltdown and green energy programs in the United States accelerated the transition, Birol said.
Australia Reduces Mining "Super Tax," Reviving Profitability of Resource Sector
Australian mining companies declared a huge win today (Friday) when the government announced the proposed mining "super tax" would be reduced, prompting some companies to reactivate shelved projects and reopen merger and acquisition talks.
Australia's Prime Minister Julia Gillard agreed on a compromise plan that would reduce the planned tax to 30% of profits from iron ore and coal, and 40% tax on oil and natural gas, down from the originally proposed 40% tax on all resources. The new plan, called the mineral resource rent tax, would also raise the tax's trigger level to profits that exceed a 12% rate of return instead of 6%.
"The reduction in the headline rate is an amazing concession," John Robinson, chairman of Global Mining Investments Ltd., told Bloomberg. "It's certainly better than I had expected."
Australia's Prime Minister Julia Gillard agreed on a compromise plan that would reduce the planned tax to 30% of profits from iron ore and coal, and 40% tax on oil and natural gas, down from the originally proposed 40% tax on all resources. The new plan, called the mineral resource rent tax, would also raise the tax's trigger level to profits that exceed a 12% rate of return instead of 6%.
"The reduction in the headline rate is an amazing concession," John Robinson, chairman of Global Mining Investments Ltd., told Bloomberg. "It's certainly better than I had expected."
Indonesia Catching China's Eye
It's an open secret that Indonesia's economy is on the rise. In the spirit of March Madness, it's something of a sleeper. That's why China, which is always looking for promising new investments, is looking to make inroads there.
Indeed, China's appetite for commodities makes Indonesia - with its close proximity and abundance of natural resources - an ideal partner.
PetroChina Co. Ltd. (NYSE ADR: PTR), Sinopec, Sinosteel, Minmetals and China Investment Corp (CIC) - Beijing's $300 billion sovereign wealth fund - are all aggressively scouring South East Asia's largest economy for takeover targets and joint venture partners, the Live Trading News reported.
Indeed, China's appetite for commodities makes Indonesia - with its close proximity and abundance of natural resources - an ideal partner.
PetroChina Co. Ltd. (NYSE ADR: PTR), Sinopec, Sinosteel, Minmetals and China Investment Corp (CIC) - Beijing's $300 billion sovereign wealth fund - are all aggressively scouring South East Asia's largest economy for takeover targets and joint venture partners, the Live Trading News reported.
Are Coal Prices Ready to Burn Hot in 2010?
For most of the past 50 years, since the birth of environmental awareness, coal has been the "black sheep" of the power-production family. Now, thanks to more efficient furnaces, better exhaust-scrubbing systems and other technological advances, coal is regaining favor in the world's energy markets.
However, the biggest factor in coal's recent price surge is steadily increasing demand for the fossil fuel in power generation and steel-making process, abetted by rising costs for other types of fuel, like oil and natural gas.
The question for investors, of course, is will this rising demand continue - and how can you profit if it does?
The answer to the first part of that question is almost certainly, "yes," but solving the second part is a little trickier.
However, the biggest factor in coal's recent price surge is steadily increasing demand for the fossil fuel in power generation and steel-making process, abetted by rising costs for other types of fuel, like oil and natural gas.
The question for investors, of course, is will this rising demand continue - and how can you profit if it does?
The answer to the first part of that question is almost certainly, "yes," but solving the second part is a little trickier.
PetroChina, Shell Target Australia's Arrow Energy
Oil companies Royal Dutch Shell PLC (NYSE ADR: RDS.A) and PetroChina Co. Ltd. (NYSE ADR: PTR) yesterday (Monday) made a joint offer for Australian energy producer Arrow Energy Ltd. in yet another demonstration of how China is turning Australia into its personal commodities broker.
The $3.4 billion (A$3.26 billion) deal would give shareholders A$4.45 per share - a 28% premium from Friday's share price - and a share in a new Arrow international-business entity for each current Arrow share.
Market reaction was favorable as Arrow's prices soared 47% Monday following the news, up to A$5.11 on the Australian stock exchange (ASX).
"It's an opportunistic bid and good for Arrow shareholders," Tim Schroeders, Pengana Capital portfolio manager, told CNBC.
The $3.4 billion (A$3.26 billion) deal would give shareholders A$4.45 per share - a 28% premium from Friday's share price - and a share in a new Arrow international-business entity for each current Arrow share.
Market reaction was favorable as Arrow's prices soared 47% Monday following the news, up to A$5.11 on the Australian stock exchange (ASX).
"It's an opportunistic bid and good for Arrow shareholders," Tim Schroeders, Pengana Capital portfolio manager, told CNBC.
Hot Stocks: Coca-Cola's Strong International Sales Serve Up Sparkling Third-Quarter Results
[“Hot Stocks” is a new Money Morning feature that analyzes the investment outlook of global companies that are in the news. This is the fourth installment of this ongoing investment series.] By Jennifer Yousfi Managing Editor Money Morning The Coca-Cola Co. (KO) yesterday (Wednesday) reported a double-digit increase in third-quarter earnings – a showing that […]
How Coal Shortages in China Will Spark More Foreign Takeovers of U.S. Assets
By Jason SimpkinsAssociate Editor 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 […]
Cashing in on Commodities: The Short- and Long-Term Solutions to the Growing Global Energy Crisis
Editor's Note: This is the first installment of a new Money Morning series highlighting investment opportunities created by the global bull market in commodities. By Jason Simpkins Associate Editor Crude oil is grabbing the headlines but it's coal and uranium that together provide nearly half the world's power. So it follows that as worldwide demand […]
- FACEBOOK COMMENTS