Noble Group Ltd, the Hong Kong-based supplier of energy, food and mining commodities, sees Mongolia as its next opportunity to expand in coal and build on its record 2010 profits.
“We have staff looking at several opportunities” in Mongolia, especially in exploration companies, Chief Executive Officer Ricardo Leiman said on a conference call yesterday. “Mongolia will be an area specifically for quarter two. We look at developing a similar model there to what we have in Indonesia and Australia.”
Noble won exclusive overseas marketing rights for PT Berau Coal, Indonesia’s No. 5 producer, in November, adding to its Australian assets, which include Gloucester Coal Ltd. The Berau deal will “contribute nicely” to 2011 earnings, Leiman said after his company posted record annual net income of $606 million from $57 billion in sales.
Aspire Mining Ltd., which explores for coal in Mongolia, said Jan. 17 that Noble bought 4.1 percent of its shares and is in preliminary talks on how the two can cooperate. Xanadu Mines Ltd., which plans to develop coal and iron ore fields in Mongolia, said Feb .3 it has struck an alliance with Noble. The company has an office in Mongolia and ships coal from the region, Leiman said.
Noble climbed 6.3 percent to S$2.18 at 9:57 a.m. in Singapore trading for its biggest gain in more than five months. The company led gains in commodity suppliers in the city-state, with Olam International Ltd. gaining 1.4 percent and Golden Agri Resources Ltd., the world’s second-largest palm oil planter, adding 3.9 percent
Noble completed 28 deals worth $3.37 billion since January 2000, according to data compiled by Bloomberg, as the company transforms the business from trading to buying and running some energy and food producing assets. Founded by billionaire Richard Elman, a former Southeast Asia chief at 110-year-old commodities trader Phibro, Noble counts China’s sovereign fund among shareholders.
Noble is “well positioned to leverage its supply chain to expand our business further,” Leiman said.
Commodity prices have jumped as adverse global weather, from droughts in Russia to floods in Pakistan, hurt wheat, rubber, cotton and palm oil harvests, and disrupted the flow of commodities including coal and iron ore over the past six months. The Thomson Reuters/Jefferies CRB Index of 19 raw materials rose 16 percent in the last three months of 2010, the fastest since the second quarter of 2008.
Higher prices for its commodities, which include coffee, cotton, grains, coal, iron ore, oil, and aluminum, helped Noble to triple profit to $247.4 million in the three months ended Dec. 31, from $84.9 million a year earlier, the Singapore-listed company said in a statement to the stock exchange yesterday. Sales rose 82 percent to $17.4 billion.