According to UBS AG, the pace of coal mining takeovers in Australia the world’s biggest exporter of the fuel is set to slow after the ranks of potential targets were thinned by a surge in acquisitions.

Mr Campbell Stewart head of metals and mining at UBS’s investment banking unit in Melbourne said that “The big wave of coal deals we’ve seen is over. We expect some slowdown in activity because of lower supply.”

According to Bloomberg data, coal mergers and acquisitions in Australia reached the highest in at least five years in 2009 headed by Yanzhou Coal Mining Co Ltd’s AUD 3.5 billion takeover of Felix Resources Ltd. Global producers are looking to expand in the developing world.

Mr Andrew Phillipps executive director of UBS’s M&A origination said that “There’s more interest in the emerging coal basins, whether that’s in Africa or whether that’s in Indonesia.”

According to the data, there were USD 3.9 billion of announced and completed coal takeovers last year in Australia. That compares with USD 3.35 billion so far this year and USD 2.23 billion in 2008.

The demand outlook for steelmaking and power station coal is robust because of the urbanization of China and India, Xstrata Plc said last month.

(Sourced from Bloomberg)