July 7th - South Africa: June exports from South Africa totaled 4.02 mm MT (down 12.12% seq and down 27.31% yoy), while inventories grew 913K tons from May’s two year low following the transportation strike. Exports for the first half of the year totaled 27.96 mm MT, in line with the same period in 2009, but 4% behind ’08 and 11% behind ’07. Despite the recent expansion to handle 91 mm MT/year, annualized exports total just 56.23 mm MT, 8% below 2009 and 15% below 2007. We’ll be watching July figures closely to see if they improve or further encroach upon the low of 3.57 mm MT in Jan 2008. As is evident in the graph below, Richards Bay exports have been extremely erratic recently, so we are not worried about June’s weakness just yet.

July 6th - CLF/INR Energy Follow Up: We did some more poking around about CLF’s announced acquisition of private coalco INR Energy, and consensus seems to agree with our belief that CLF overpaid for the acquisition. We were a bit surprised that management did not face more scrutiny about the price tag on their call to discuss the acquisition. We were, however, pleased to hear that it looks like CLF will keep INR’s team in place and allow them to operate the company as a subsidiary. Regarding reserves, it was noted in the call that 1/3 of their reserves are permitted, and while all 68 mm tons of met reserves are high vol, approx 2/3 of the met would be considered grade ‘B’ high vol and test would be grade ‘A’ high vol (and a cream of the crop ‘A’ at that). Management also mentioned that they would have the opportunity to market some of the steam coal production as a PCI coal if the demand for PCI is there.