intresting22 Dec 2014 16:28
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* Japan is world's second-biggest coal importer
* Trading houses take advantage of depressed coal markets
* Signals some betting market has bottomed
* Assets eyed in Mozambique, Mongolia, Australia and Indonesia
By Yuka Obayashi and Sonali Paul
TOKYO/MELBOURNE, Dec 22 (Reuters) - Only a few months ago, a potential buyer said Japanese trading house Marubeni Corp was prepared to sell a costly stake in a Canadian coal mine for as little as $1.
But a flurry of acquisitions of high-quality coal assets by Japanese firms in recent weeks signals that some trading houses at least are betting a depressed coal market where prices have halved in three years may be bottoming out.
This vote of confidence comes amid signs that coal demand in Japan and emerging markets such as India is holding up well despite weaker demand in markets such as China, where coal imports in the first 11 months fell nearly a tenth.
Japan is the world's second-biggest coal importer behind China, importing almost 200 million tonnes a year.
Recent acquisitions include the first coal investment by Mitsui & Co in 10 years. It is purchasing a stake in a Mozambique mine operated by Brazil's Vale, in which the trading firm has an indirect stake.
"The biggest reason for participating in the Moatize project is to retain excellent quality metallurgical coal that is scarce globally," Tetsuya Fukuda, general manager of Mitsui's coal division, said. "With the resource supercycle, we had been not able to buy any assets."
The partnership will be welcome for Vale, which incurred a coal loss of almost $500 million in 2013, mostly from Mozambique.
Mitsui is paying $763 million to Vale for a stake in the mine and port and rail connections, and is also committed to spending $190 million to expand the mine.
Fukuda said Mitsui also had its eyes on other assets, without elaborating.
Coal prices soared from around $50 to over $200 a tonne between 2005 and 2008, making mining assets expensive.
But prices have halved in three years and are back below $70 as miners invested in new production and demand stalled due to alternative fuel sources and slower growth.
CHEAP ASSETS
The low prices are now triggering interest in buying cheap assets in anticipation of an eventual market pick-up.
"If you are interested in buying assets - they're probably going to be more expensive in six months time from where they
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