CoalWire 87, May 14, 2015.

May 14, 2015

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campaigns

Bank of America to phase out coal investments

After a multi-year campaign aimed at pushing the Bank of America to end its support for coal projects the company unveiled its new coal phase-out policy at its annual general meeting. The bank states that it will help “accelerate the transition from a high-carbon to a low-carbon society and from high-carbon to low-carbon sources of energy” and “continue to reduce our credit exposure over time to the coal mining sector globally.” Amanda Starbuck from Rainforest Action Network welcomed the new policy: “Bank of America has gone from being the worst bankroller of coal to having the strongest global coal mining policy of any major global bank.” (Bank of America, Rainforest Action Network)

Suggested Tweet: After a 4-year campaign @bankofamerica moves to dump #coal http://a.ran.org/f1u pic.twitter.com/vTVrG4lRy2

Alcoa cans obsolete Australian power plant

A sustained community campaign has forced Alcoa Australia to announce that its obsolete 150 megawatt (MW) Anglesea brown coal power station in Victoria will close on August 31. The 46-year-old plant was built to supply power to Alcoa’s nearby Point Henry aluminium smelter. After shutting the smelter in July 2014 Alcoa kept the power station operating in the hope of finding a buyer. However, faced with a high-profile community campaign pushing for the highly polluting plant to be shut, Alcoa failed to attract buyers. Residents and environmental groups are now seeking to ensure the company properly rehabilitates the mine, which is in an ecologically-rich coastal heathland. (The Age)

Suggested Tweet: @Alcoa cans obsolete Australian #coal plant – now it’s time to clean up the mess http://bit.ly/1G4yRlE @SCAA3230 pic.twitter.com/dmkj1G78IM

top news

Norwegian sovereign wealth fund flags ‘coal discount’: Norges Bank Investment Management, which manages Norway’s US$900 billion sovereign wealth fund, has written to mining companies it retains investments in warning that “systematic divestment programs may introduce a ‘coal discount’ within the mining sector.” (A ‘coal discount’ would be investors assigning a lower value to a company because of their coal investments.) The fund also wrote to power producers it has investments in requesting information on their coal phase-out strategy and the timing of it. (Swissinfo.com)


Standard Chartered backpedals on support for Adani: After revelations that Standard Chartered was funding Adani’s proposed Carmichael coal mine in the Galilee Basin – contrary to its public promises – the bank’s chairman, Sir John Peace, said that it would go “no further with this project until we are fully satisfied with all the environmental aspects.” Peace also revealed that the bank was in “active discussions” with the Australian Government over the project but had not yet met environmental groups. (Guardian)

Glencore confirms payments to Colombian military: In response to a civil society critique of the operation of the coal mining company Prodeco, Glencore has confirmed that its Colombian subsidiary paid over US$300,000 to the Colombian military in 2012 for “security services.” The company has also defended the relocation of communities, which are affected by coal dust from mining operations. (MarketWatch.com)


US judge rules mine expansions approved without proper review: A US District Court judge has ruled that the Interior Department’s Office of Surface Mining approved the expansion of the Colowyo Mine in 2006 and the Trapper Mine in 2007 without taking a “hard look” at the environmental impacts. The judge, ruling on a lawsuit brought by WildEarth Guardians, directed the Interior Department to reconsider the mine expansions within 120 days. The two Colorado mines supply Tri-State Generation and Transmission’s Craig power station. (Denver Post, WildEarth Guardians)

“The science is very clear, there is no space for any new coal,”

said Christiana Figueres, the Executive Secretary of the UN Framework Convention on Climate Change.

news

Australia: Complaint lodged with Australian Stock Exchange over inflated Adani mine job claims.


China: In first four months of 2015, coal production fell 6.1 per cent and thermal power dropped 3.1 per cent.


Indonesia: National planning agency head doesn’t “expect to see coal train projects in the future.”

New Zealand: Despite production cuts, government-owned Solid Energy nears collapse.


US: Coal baron announces he will be a candidate for Governor of West Virginia.


US: Ohio newspapers press for defamation law reform after Murray Energy lawsuit.

“I think some of these [US coal] companies are going to have a hard time surviving. Five years from now who knows. Five years ago it [new coal mines] made some sense, it doesn’t now,”

said Gary Buchanan, co-owner of Buchanan Capital LLC in Billings, Montana.

companies + markets

Global coal prices cripple Mozambique project: International Coal Ventures Limited (ICVL) – a consortium of Indian government-owned companies – has cut production at its Benga mine by just under one-third to 3.6 million tonnes per annum (Mtpa). With losses of up to US$10 million a month due to the lack of demand from Indian coal buyers, the company is now pinning its hopes on finding domestic or regional markets. ICVL originally bought the project from Rio Tinto in 2014 assuming that coal exports to India would be viable. (Mining Weekly)


Rio Tinto concedes thermal coal price stuck for years: The chief executive officer of Rio Tinto’s Copper & Coal group, Jean-Sébastien Jacques, has acknowledged that thermal coal prices won’t recover for “a long, long time” and that it could possibly be “even three or four years, before we see an inflection point.” In February 2015 Rio Tinto merged its US$5 billion coal division with the copper group and has signalled its interest in selling some of its coal projects. (Australian Financial Review) (Paywall)


US met coal producer flags bankruptcy risk: In its quarterly report to investors, Walter Energy, a major US metallurgical coal exporter, said there was “substantial doubt” about its continued viability. On May 15 a US$62.4 million interest payment is due to bondholders. If it can’t make the payment or reach agreement to restructure its US$3 billion debt, the company has flagged that it may file for bankruptcy. The company subsequently said it would “be making interest payments” but did not indicate whether it would be the full amount. (Bloomberg, Walter Energy)

Indian Government strips Reliance Power of coal blocks: The Indian Government has stripped Reliance Power of the mining rights to the Chhatrasal mine which, along with the Moher and Moher Amlhori coal blocks, had been allocated to the company for the 4000 MW Sasan Ultra Mega Power Project (UMPP). In 2010, after winning the bidding process for the power plant the year before, the company gained approval to use 9 Mtpa of coal excess to Sasan’s requirements for its proposed adjoining 3960 MW Chitrangi power plant. While the cancellation of the coal blocks won’t affect the Sasan project it may end the company’s hopes for the Chitrangi project. (Economic Times, CoalSwarm)


Bernstein downgrades met coal prospects:  Bernstein Research, a financial analyst firm, has cut its price estimate for metallurgical coal by 10 per cent to US$105 per tonne due to continuing over-capacity in the Chinese steel sector. Bernstein Research says Chinese steel production is likely to fall marginally again this year – in part due to the government anti-pollution crackdown – and remain flat for the next few years. In its latest budget forecast the Australian Government estimates a metallurgical coal price of US$90 a tonne through to 2016-17. (Barron’s, Australian Government)

resources

Asian thermal coal markets remain under pressure due to oversupply, low pricesPlatts, May 2015. (Video)


This 4-minute video gives a brief overview of the key trends affecting thermal coal prices in the Asian market with a particular focus on China, Australia and India.


Northern Grease, Vimeo, May 2015. (Video)


This 15-minute video documents part of the Tahltan Nation campaign to prevent Fortune Minerals’ proposed Actos coal mine in the Sacred Headwaters in British Columbia (BC). In early May a BC government-owned company bought Fortune Minerals’ licences to enable the provincial government to enter into discussions with the Tahltan Nation over the long-term management of the area.

Financing Coal: High Carbon Arithmetic of Turkey, 350Ankara.org and Consumer and Climate Protection Association, April 2015. (Pdf)


This report provides a detailed review of the Turkish coal-fired power generation sector and a brief review of the financing of the proposed fleet of new plants.


Shadow report on the sustainability of Glencore’s operations in Colombia, Pensamiento y Acción Social, Arbeitsgruppe Schweiz-Kolumbien and Misereor, April 2015. (Pdf)


This report provides a detailed review of problems associated with Glencore’s coal mining operations in Colombia.