JRCC), a processor and seller of bituminous, steam, and industrial-grade coal through six operating subsidiaries, jumped 7.1% after industry reports said Peabody Energy ( BTU) was considering buying James River. Meanwhile, Arch Coal ( ACI) rose 4.1% past week. The company recently expressed interest in Massey Energy ( MEE), attracted by the latter's large metallurgical coal reserves, as compared to any other U.S.-based company. The company is poised for robust growth as it is tied to the rapid expansion in developing countries including India and Brazil. Besides Arch, ArcelorMittal ( MT) and Alpha Natural Resources ( ANR) have also offered takeover bids for Massey. Alpha Natural Resources gained 4.5%, while Massey Energy added 4% last week.
Yanzhou Coal Mining ( YZC) was the major loser, down 5.5%, after China revealed that it is seeking to tax the coal price spike. With a 10% hike in the price of heating coal since September and an expected further 7% rise by the end of 2010, Beijing has decided to tax coal sales in the country. From the current minimal tax of 1% on coal sales charged to mining companies, the surcharge will be in the range of 3% to 5%. It is likely that such added costs would be passed on to power plant operators, who will have to absorb the surcharge without passing it on to their heavily subsidized subscribers. Nucor ( NUE), manufacturer of steel and steel products, and Horsehead Holding ( ZINC), producer of specialty zinc and nickel-based products, shed 5.2% and 4.2%, respectively.