CoalWire 12, 14th November 2013

International Energy Agency pricks coal industry bubble

The International Energy Agency’s (IEA) new World Energy Outlook report presents a sobering outlook for the coal industry. “The IEA highlights that coal use in China, the US, European Union and elsewhere is increasingly determined by policies to tackle air pollution, increase renewable energy and reduce CO2 emissions. In the agency’s central forecast, assuming a cautious implementation of announced energy and environmental policies, industrialized countries’ coal use drops by one third in the next 20 years,” writes Lauri Myllyvirta, an energy campaigner with Greenpeace International. (Greenpeace)

campaigns

UN official urged to withdraw from coal industry conference

A coalition of international aid and environmental groups is urging the executive secretary of the United Nations (UN) Framework Convention on Climate Change, Christiana Figueres, to withdraw from speaking at the ‘Coal and Climate’ summit hosted by the World Coal Association, the global coal industry lobby group. The coal industry summit will be held on November 18-19 to coincide with the second week of the UN climate conference in Warsaw. The groups – which include Christian Aid, WWF, Oxfam International and Greenpeace – wrote: “we believe you would give it much more public attention and add your own (considerable) credibility to an event that should not be legitimized.” (Open Letter to Christiana Figueres)

Suggested Tweet: @CFigueres Don’t legitimise World #Coal Assoc conference by speaking at it. Burning more coal is not a #climate solution #COP19

top news

Subsidies pledged to kickstart Galilee Basin projects: The Queensland government has pledged a raft of measures to subsidise and expedite the development of the first ‘mega-mines’ in the Galilee coal basin. Measures include waiving royalty costs, facilitating compulsory acquisition of private land, underwriting road infrastructure, supporting the development of a mine-mouth power station and expediting project approvals. Burning the coal from just two of the proposed mines in the Galiliee Basin would have lifetime carbon dioxide emissions six times greater than the United Kingdom’s annual emissions. (Queensland Government,The Guardian)

BHP Billiton urged to scrap Borneo project: The Indonesian environmental group WALHI is urging BHP Billiton to scrap its proposed Indomet Coal Project in Central Kalimantan. “If BHP continues with its plans for open-cut mines, it will be a disaster for the local people, and it will be a disaster for these fragile ecosystems,” said Arie Rompas, the executive director of WALHI’s central Kalimantan branch. (The Guardian)

Further audits of Indian coal decisions likely: The Ministry of Coal is resisting a proposal from the Central Bureau of Investigation (CBI), the government anti-corruption agency, for an audit of coal allocations to independent power producers. The CBI is proposing to review decisions where the private generators won a project based on a nominated power price, but were responsible for acquiring land, project approvals and sourcing coal from the market.(The Indian Express)

Still no test results after Alberta dam collapse: Two weeks after the billion-litre spill from an Alberta coal mine, the provincial environmental regulator has not publicly released the results of its water sampling. Alberta Environment had promised to release the information within days. (EcoWatch)(Correction: In CoalWire #11 the spill was stated as being a billion cubic metres when it was reported as a billion litres).

World Bank catalogues Eskom’s Medupi failures: An internal World Bank memo has documented a series of problems with the implementation of its US$3.75 billion loan to the South African utility Eskom for the Medupi power project. The memo catalogues substantial delays, quality control problems with the boilers, labour disputes and the utility’s bid to stall the installation of pollution control equipment. The memo also notes that the utility’s demand management program exceeded its target. (Huffington Post)

Indian state suspends coal allocations:The state of Odisha has suspended further coal allocations until the ‘Coalgate’ investigations by the CBI and any related court cases have been concluded. Faced with a coal shortfall for existing and planned steel plants, Jindal Steel & Power and Tata Steel are looking to increase imports. (Reuters)

news

Australia: Whitehaven accused of using misleading information on mine biodiversity offsets.

Australia: Two coal company directors fined US$9300 each for breaking political donations law.

Nigeria: Company lobbies government and African Development Bank to support coal plants.

Pakistan: Incentives offered for private generators to convert oil plants to coal.

Pakistan: Joint venture formed to develop Thar coal mining and power projects.

Thailand: Utility warned investing in end-use efficiency better than a new coal plant.

US: Bishops call for “exhaustive and independent review” of proposed coal export terminal.

US: Expansion of Peabody mine in Indiana faces legal challenge.

“…Thanks to extreme air pollution, foreign arrivals plunged by roughly 50 per cent in the first three-quarters of the year … China should do the inevitable and curb coal use today. Otherwise, the only tourists heading to Beijing in the years ahead will be adventure seekers donning gas masks,”

writes William Pesek in an opinion column for Bloomberg.

companies + markets

Stormy divorce of Indonesian coal miners:The Financial Conduct Authority, which oversees the UK financial services industry, is investigating US$400m of financial transactions between the founding shareholders of Bumi plc. The UK-listed Bumi plc is seeking to sell its 29% stake in Bumi Resources, Indonesia’s largest coal company. If shareholders approve the split, Bumi plc will retain an 85% stake in Berau Coal, the fifth largest Indonesian coal producer. (Financial TimesThe Telegraph)

Indian private power price hike dispute drags on: The electricity utilities of Gujarat and Haryana continue to oppose proposed price hikes to cover the cost of comparatively expensive coal imported from Indonesia by Adani Power and Tata Power. The private generators are also arguing they should be compensated for the impact of the depreciation of the rupee, a position rejected by Haryana utilities. (Business Standard)

Gloom overhangs US lignite projects: Two long-running lignite projects proposed to be built in North Dakota could be required to repay public funding unless they are granted an extension by the end of the year. Eight million dollars in grants were made to support a lignite to synthetic natural gas plant and a coal-to-liquid fuel plant. “They are dead in the water … No progress has been made on either of them and nothing to show for the money they’ve spent,” said Wayde Schafer, a spokesman for the Sierra Club. (Charlotte Observer)

Share price plunge for Russian coal miner: Concern over a restructuring of high debt levels of Mechel have prompted a 40% price fall in a single day of the company’s share price on the Russian stock exchange. The company is currently pressing ahead with the multi-billion development of the Elga metallurgical coal mine. (Reuters)

Wood Mackenzie bullish on met coal demand:  Coal industry consultants Wood Mackenzie is estimating that the seaborne metallurgical coal market could expand by over half by 2035. They estimate that the seaborne trade in metallurgical coal could be 394 million tonnes by 2035 compared to the 261 million tonnes sold in 2012. (Platts)

Go ahead for Russian port expansion:Construction commenced on the near doubling of coal export capacity of the port of Vostochny at the eastern end of the Trans-Siberian Railway. When the expansion is completed in 2020 the port’s export capacity will be 32.5 million tonnes a year. (PortNews)

James River Coal financial nosedive:James River Coal, a central Appalachian coal company, has mothballed four Kentucky mines after announcing increasing losses due to a “soft” coal market. The company, which is at risk of breaching loan agreement conditions, has seen its share price fall by over 60% in 2013. (James River Coal,Google Finance)

“We’ve seen a lot of decisions by particularly the majors to stop development of new projects and similarly, not just in Australia but in other countries, it’s certainly hard to build coal projects,”

Michael Gray, the managing director of coal company Bandanna Energy, told the Australian Broadcasting Corporation.

resources

TVA’s Toxic Legacy: Groundwater contaminated by Tennessee Valley Authority Coal Ash, Environmental Integrity Project, November 2013. (Pdf)

The report, drawing on documents obtained under the Freedom of Information legislation, investigates groundwater pollution at the eleven coal plants owned by the Tennessee Valley Authority (TVA). The report finds that dozens of TVA’s monitoring wells exceeded guideline levels for arsenic, boron, cobalt, manganese, and other pollutants.

“Coldust on Them Whites”, Outlook India.com, November 18, 2013.

A profile of Dasari Narayana Rao sketches one of the people embroiled in the Coalgate scandal. Rao is a film director from Andhra Pradesh who went on to become, on two occasions, the Minister of Coal. The Central Bureau of Investigation has alleged that Rao’s company, Sowbhagya Media, received over US$350,000 from a Jindal subsidiary within a year of allocating a coal deposit to the steel and coal company.