CoalWire 53, 4th September 2014

September 4, 2014

Uncertainty, rising costs cloud Indian coal sector after landmark supreme court rulings

“India’s coal bubble is perilously close to bursting. This week the Indian court system handed down three landmark energy rulings. While an ultimate decision still looms, the combined weight of these initial rulings reaffirms one thing — it’s time to diversify away from coal,” writes Justin Guay from the Sierra Club. The Indian Supreme Court ruled 218 coal allocations since 1993 were illegal, stayed an order by a tribunal allowing two coal power plants to raise their prices due to increases in the cost of imported coal, and rejected a bid to retroactively reduce the value of solar power agreements in Gujarat.

Suggested Tweet: Despite what the industry would have you believe, all is not well with #coal in #India http://huff.to/1qNIKZd @Guay_JG

campaigns

Adani & GVK ponder retreat from dumping in the Great Barrier Reef

Faced with strong opposition from the tourism industry, scientists and the local community, Indian coal companies GVK and Adani are reported to be considering backing away from sea dumping of dredging waste in the Great Barrier Reef Marine Park from the proposed expansion of the Abbot Point coal terminal in Queensland.  Last week the local conservative member of parliament, George Christensen, stated that he had “got it wrong” on the sea dumping option and would push for land disposal. The Australian Marine Conservation Society said that while a shift would be welcome, “there is a long way to go before the Reef is protected from port expansions.” (ABC, Australian Marine Conservation Society)

top news

Uncertainty surrounds Indian Supreme Court ‘Coalgate’ decision: The Indian government has argued before the Supreme Court that coal allocations found to have been illegally allocated after 1993 should be cancelled with the exception of 40 which are in production and a further six which have mine-mouth plants nearing completion. One of the two petitioners who initiated the case has argued that all the allocations should be cancelled. The Supreme Court will resume hearing the case on September 9. (Economic Times)

Marubeni picked as preferred bidder on Croatian plant: The Japanese construction company Marubeni has been selected as the preferred bidder on the proposed 500 megawatt (MW) Plomin C plant. The Croatian national power provider HEP is hoping to conclude negotiations with Marubeni by the end of the year with the aim of commissioning the plant by 2019. The proposed plant is slated to replace the existing 125 MW Plomin 1 unit. (Dalje.com)

Troubles with Sri Lanka’s first coal plant continue: Ever since the Chinese built and financed Lakvijaya Power Plant was commissioned in 2011 Sri Lanka’s first coal plant has been plagued with breakdowns. The latest shutdown, which is likely to be for ten to 15 days, is due to a swarm of jellyfish clogging the seawater intake filters. Two units also shut down due to an electrical fault. The Ceylon Electricity Board is aiming to have the plant fully operational by September 16, when the Chinese President Xi Jinping is scheduled to attend the commissioning ceremony for the third 300 MW unit. (The Nation, Sunday Times)

Vietnamese leader wants ban on new coal plants near World Heritage site:  Dang Huy Hau, the Vice Chairman of the provincial People’s Committee in Quang Ninh province is pressing for a ban on new coal-fired power stations and expansions of existing ones within 15 kilometres of the boundary of the Ha Long Bay World Heritage area. Coal mines for the power stations and cement plants have also been identified as one of the major sources of pollution in the province.(Eco-Business)

Indonesian Corruption Commission zeroes in on mining: A meeting of industry and government officials convened by the Indonesian Corruption Eradication Commission (KPK) was told that 23 coal licence holders – including Adaro Energy and Bumi Resources – hadn’t paid government license fees and royalties, and would risk having their licenses cancelled if the fees weren’t paid by the end of October. The KPK also raised concerns about the allocation of coal licences by district governments and suggested they be the responsibility of provincial governments. (Jakarta Globe)

Report into Australian coal mine fire finds fault with company and government: An inquiry into the February 2014 Hazelwood brown coal mine, which burnt for 45 days and generated hazardous levels of smoke in neighbouring towns, has found numerous flaws with the policies and preparedness of the subsidiary of GDF Suez and the Victorian government. While the report notes that the fire would have been prevented if disused parts of the mine had been properly rehabilitated, the panel made no recommendation on ensuring this work is accelerated. (The Age, Environment Victoria)

“We were absolutely shell-shocked when one of the banks, about six years ago, all of a sudden said ‘no’ [to a loan request]. We thought, ‘Well that’s just silly, no other bank will have that problem,’ but it became very contagious at all banks – not wanting to invest in what was perceived as dirty coal,”

Caroline Henry, the treasurer of the South African government-owned utility Eskom told Risk magazine.

news

India: Tourist cruise ships avoid Goa rather than use dusty coal port facilities.

New Zealand: Bathurst Resources writes off US$374 million Buller metallurgical coal project.

Pakistan: Bid deadline for 6800 MW Gaddani Power Park extended in hope of investor interest.

Peru: 7.7 tonnes of cocaine hidden in coal shipment destined for Europe.

Sri Lanka: Ceylon Electricity Board seeks investors in 500 MW Sampur plant.

Vietnam: Ship carrying 2700 tonnes of coal sinks near Ha Long Bay World Heritage site.

“Corruption here [in China’s Shanxi province] has become even worse than in other provinces, much worse … It has coal; coal brought money; that brought corruption … With all the money around, officials threw themselves into buying and selling posts, and with the posts, they could get more coal and more money,”

Gao Qinrong, a former journalist who spent eight years in prison after reporting on corruption in Shanxi, told the New York Times.

companies + markets

Indian power companies aim to overturn court decision: After a Supreme Court decision staying power price rises on Tata Power and Adani power stations at Mundra, the companies have shut down eight key coal-fired plants citing technical and financial problems. The restrictions have triggered a power crisis in the western and northern grids, triggering blackouts. Indian Power Minister Piyush Goyal convened emergency talks in the hope of having the five states drop their objections to the companies’ power price increase. (Times of India, Times of India)

 

Colombian port expansion commissioned:The Cerrejon Coal Company – a joint venture between BHP Billiton, Xstrata and Anglo American – has commissioned new coal loading facilities at its Puerto Bolivar coal export terminal in Colombia. The company is nearing the completion of its US$1.31 billion P-40 expansion of the Cerrejon mine, railway and port facilities to cater for an extra eight million tonnes per annum (Mtpa) in exports. A company official stated earlier in the year that it may reach the 40 Mtpa capacity goal in 2015 or 2016 depending on global prices of thermal coal. (Platts)

 

Rio Tinto throws Mongolian subsidiary a lifeline: Rio Tinto’s majority-owned subsidiary, Turquoise Hill Resources, has agreed to defer debt repayment obligations of SouthGobi Resources, which it has a 56% stake in. SouthGobi Resources has warned that with coal prices in China “likely to remain under pressure” for the remainder of 2014 that “there can be no assurance that the company will have sufficient funding for the balance of 2014 to be able to continue as a going concern.” SouthGobi Resources owns and operates the Ovoot Tolgoi coal mine.(SouthGobi Resources, Bloomberg)

Polish miner plans mass layoffs to avoid bankruptcy: The government-owned coal company, Kompania Weglowa SA, has foreshadowed that it will have to cut its workforce by one-third – or 20,000 employees – and keep production at its current 30 Mtpa to avoid bankruptcy. The company is planning on selling four of its 14 mines, reducing stockpiles and hoping to export coal to war-affected Ukraine.(Bloomberg)

 

Indonesian coal miner bailed out by lenders: Indonesia’s beleaguered coal miner, Adaro Energy, has secured a US$1 billion loan from 14 international banks to allow it to refinance its debt. However, in the first half of 2014 the company reported a 31% fall in pre-tax profits even though it increased the volume of coal produced by 14 per cent.(Adaro Energy, Jakarta Post)

 

Indian government to allow major mine expansions without public input: The Ministry for the Environment has decided to allow mines producing over 20 Mtpa to expand by up to six Mtpa without any public hearing. The only caveat was that the increased coal volume be moved by rail or conveyor systems. In July the agency had capped the increase from existing leases at one Mtpa but increased it after a request from the Ministry for Coal. (IANS)

resources

“In Pictures: India’s coal miners”, BBC, August 31, 2014.This is a BBC photo essay on Indian coal miners.

Coal and eMalahleni’s poisoned peopleMail & Guardian.This is a Greenpeace photo essay on the communities living in the shadow of coal mines and power stations in the Malahleni (Witbank) area in South Africa.

Condemned, Ecodefense Art Production, September 2014. (11-minute YouTube video)

This video documents the struggle of Siberian indigenous people against being displaced by coal mines in the Kuzbass region.

Suggested Tweet: 11 min doco on local opposition to #coal companies in Siberia/Kuzbassin #Russia by Ecodefense (English subtitles)http://youtu.be/m6numrY6rSk

Hazelwood Mine Fire Inquiry Report, Victorian Government, September 2014.This is the final report of the panel investigating the 45-day fire at the Hazelwood brown coal mine in Victoria, Australia.

“Commitment accounting of CO2 emissions”, Environmental Research Letters, August 26, 2014.This paper documents the rapid growth of coal and gas plants over the past decade and argues for the need for the full up-front accounting for lifetime emissions of electrical plants at the time that decisions are being made.

Beehives or elephants: How should India drive its solar transformation?, Bridge to India and Tata Solar Power, September 2014. (Large pdf)

This detailed and ground-breaking report maps out possible pathways for solar power in India and in particular compares it to the rising costs and other impacts of coal-fired generation.