Felix's great future of coal

YANZHOU Coal Mining shareholders approved the takeover of Felix Resources on Friday, while Felix managing director Brian Flannery can see signs of excessive steel production in China.
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Felix Resources co-founder and current White Energy managing director Brian Flannery.

Staff Reporter

The Australian government has already conditionally approved Yanzhou’s $A18 a share offer, which includes special dividends, and Felix shareholders will vote on the deal on December 8.

At Felix’s AGM on Friday, Flannery referred to the GFC as the “great future of coal”

He said it was likely Australia would export record coal tonnages for 2009 and also chipped in on the domestic thermal coal scene.

“Eighty five per cent of Queensland’s electricity and 90 per cent of New South Wales electricity comes from coal,” he said.

“Electricity costs jumped 11 per cent in the September quarter and we haven’t started with the Carbon Pollution Reduction Scheme or anywhere near the 20 per cent renewables target.”

Flannery predicted China would become a net importer of coal back in 2007 and while this was not the case in 2008, leading producer China Shenhua Energy said the country’s total imports had reached an unprecedented 86.48 million tonnes for the first nine months of 2009, a jump of 167.2% year-on-year.

“They need a lot more electricity-generating capacity but I am a bit concerned that their steel production per capita is exceeding typical developed country consumption,” Flannery said in his address.

“Something to watch for in 2010-11. Remember the saying when the USA sneezes, the world catches a cold. Maybe we can change that to China.”

BHP Billiton chief executive Marius Kloppers recently reaffirmed the company’s view that restocking of commodities in China was essentially complete and there were signs of a demand pullback.

Shares in Felix were trading at $A17.37 this morning.

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