Emerging Markets' Coal Demand Heats up

What's dirty and out of fashion, but everybody wants it? That would be coal, both the coking kind used to make steel, and the thermal coal used to fire power plants. Over the past year or so, coal consumption has climbed on emerging market demand. To the industry's surprise, it's been enough to push global prices to a two-year high. The Wall Street Journal reports that China even worries it may run out of coal someday. So the government may cap domestic output to keep from running down the country's reserves too quickly. Intent on meeting that demand, companies everywhere are busy merging and acquiring. In fact, just in the last few weeks, $15 billion in deals have been announced. That includes Walter Energy WLT, with its $3.3 billion bid for Canada's Western Coal. And Caterpillar CAT spent $8.6 billion buying Bucyrus BUCY, which makes mining equipment such as the gigantic excavators used in opencast coal mines. Continue reading the article.