CoalWire 92, June 18, 2015

June 18, 2015
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CoalWire

Indonesia’s Coal-Trafficking Problem Requires Impartial Inquiry

“When corruption is as pervasive as it is today in Indonesia’s coal industry, it is difficult to maintain a national effort to reform it. This is not an uncommon challenge, and is often best addressed by outside parties invited by the authorities to observe, report and enforce change … An external investigation of illegal coal shipping in Indonesia could go a long way to establishing a strong basis for establishing honest reform,” writes Tom Sanzillo from the Institute for Energy Economics & Financial Analysis.

Suggested Tweet: #Indonesia’s #coal-trafficking problem requires impartial inquiry @ieefa_institute’s Tom Sanzillo in Jakarta Globe http://bit.ly/1eiqFE8

Will Vietnam avoid becoming a dumping ground for China’s coal plant builders?

“The news that coal consumption [in China] is now falling, while welcomed by environmentalists, has consequences for a number of other countries, including Vietnam … Vietnam and other countries that have significant economic ties with China are at risk of becoming dumping grounds for coal. They should adopt stricter policies to avoid becoming locked into coal-based development and ending up where China was a few years ago. They need to leapfrog this phase and follow China’s lead by reducing their dependence on coal,” writes Maarten Akkerman in International Institute for Environment and Development

Suggested Tweet: Will #Vietnam avoid becoming a dumping ground for #China’s #coal plant builders? @mjakkerman http://bit.ly/1Bik1Yy pic.twitter.com/aT7N9ccacj

top news

Big cuts in air pollution needed to reduce death rates: A study has found that substantial cuts in outdoor air pollution would be required just to stabilise deaths caused by PM2.5 fine particle pollution. The study’s authors estimated that without any change to current air pollution levels in China and India the deaths per capita from air pollution would increase by between 20 to 30 per cent during the next 15 years. Coal burning is a significant contributor to PM2.5 pollution. (News Medical, Environmental Science & Technology)


‘Dirty dozen’ coal investors with global bootprint: A dozen individuals with major coal investments control deposits containing the equivalent of China’s annual greenhouse gas emissions, according to a Guardiananalysis. Heading the list is Vinod Adani, a major shareholder in Adani Enterprises, which is seeking to develop the Carmichael mine in Australia. Roman Abramovich – best known as the owner of the Chelsea Football Club – is second on the list due to his stake in the Russian coal and steel company Evraz. (Guardian)


Indonesian villagers lodge claim over land near BHP Billiton mine: The villagers of Maruwei have lodged a claim for title to 1000 hectares of land within BHP Billiton’s 350,000 hectare IndoMet coal project area in Central Kalimantan. The villagers have long complained they were tricked into clearing their land by a company agent with some only agreeing to sign a compensation agreement due to threats by local police. BHP Billiton is planning to commission the Haju metallurgical  coal mine in August this year.  (Jakarta Globe, Jakarta Globe)

Indigenous landowners lobby global banks to drop Adani plan: Representatives of the Wangan and Jagalingou (W & J) traditional owners from the Galilee Basin in Australia have completed a world tour lobbying global banks not to fund Adani’s proposed Carmichael mine. In London W & J representatives met with Standard Chartered, which has loaned US$526 million to Adani for the proposed mine. Shortly afterwards it was reported that Standard Chartered withdrew at the “last minute” from a global bond issue for Adani Ports, the flagship subsidiary of Adani Enterprises. (Guardian, Economic Times)


Japanese environment minister opposes new coal plant: Japan’s Environment Minister Yoshio Mochizuki has objected to a proposed 1200 megawatt (MW) coal-fired plant proposed by J-Power and Osaka Gas. “There is a threat to achieving our emission cut target if we continue introducing coal power stations,” he said. The Ministry of Economy, Trade and Industry is scheduled to make a decision on the proposed plant by June 28. (Reuters, Bloomberg)


Australian company prosecuted for underground coal gasification pollution: The Queensland Government has announced that Linc Energy will face five charges over the alleged pollution of 320 square kilometres of land by its underground coal gasification pilot plant at Chinchilla. Linc Energy is dismantling the plant but is investigating new underground coal gasification projects in Africa, Asia, Russia and Poland. (Brisbane Times)

“Coal is the most hated commodity in the world,”

stated the ‘Lex’ column in the Financial Times.

news

Australia: NSW Planning Department proposes approval of 70 million tonne T4 export terminal.


Botswana: Plan floated for 600 MW coal plant, in part to supply a mine in neighbouring Zambia.


Europe: EU estimates its carbon dioxide emissions from burning fossil fuels fell by 5 per cent in 2014.

Philippines: Residents call on Manila City Mayor to close coal dust storage plant.


UK: Coal imports in April fell to an eight-month low, down 50 per cent in a year.


UK: Major Indonesian coal producer fined US$7.3 million for undisclosed related party transactions.

“The coal industry always seems to be looking for a white knight to rescue it from some crisis, and it is perhaps ironic that Indonesia, the world’s largest exporter, is the next great hope that is to save global miners from the current supply glut. The theory is that as Indonesia ramps up domestic coal-fired power generation, it will rotate its exports to meet local demand, thereby removing millions of tonnes from the seaborne market and bringing it back into balance … But white knights have had a somewhat chequered recent history for coal producers and traders,”

writes Clyde Russell in Reuters.

companies + markets

Employees sue US coal companies for not divesting: Former US employees of Arch Coal and Peabody Energy are suing the companies alleging they breached fiduciary duties by keeping employee retirement funds invested in the company’s own declining stocks. The lawsuit against Arch Coal argues that the company’s Employee Thrift Plan lost US$53 million between the end of 2011 and the end of 2013 as it doubled its shareholding in Arch stocks even though the share price dropped by over two-thirds. (Argus Media)


Shell reveals CCS plants can’t get full insurance cover: Shell UK has revealed that it faces significant hurdles gaining insurance coverage for its proposed Carbon Capture and Storage (CCS) project attached to SSE’s gas-fired Peterhead power station in Scotland. Shell states in a submission to the Department of Energy and Climate Change that “undefined liabilities make it difficult for insurers to price the risk, and may thus cause reluctance to underwrite the risk or result in large risk premiums.” (Shell UK, Bloomberg)


Coal carrier oversupply dooms ships for scrap: The rapid decline in Chinese coal and iron imports has resulted in bulk commodity shipping costs falling to one-third of their break even costs, a 29-year low. Coal and iron ore shipping account for about two-thirds of the global bulk commodity fleet. With a quarter of the fleet surplus to requirements, shipping company bankruptcies and ship retirements are increasing. Shipping analysts are hopeful that freight rates may start increasing in 2016. (Wall Street Journal)

Pakistan approves Thar coal plant deal:The Pakistan Government’s Private Power and Infrastructure Board has approved Shanghai Electric’s proposed 1400 MW power plant based on domestic Thar coal. The board also approved letters of support for four other coal projects, two with a proposed capacity of 1350 MW based on domestic coal and two – with a capacity of 2640 MW – based on imported coal. (Daily Times)


Met coal prices tipped to fall further next quarter: Metallurgical coal prices in the seaborne market may fall by over US$14 a tonne to about US$95 a tonne next quarter, according to BB&T Capital Markets analyst Mark Levin. Increased supply from mines in Australia, Mozambique and Russia are adding to the existing over-supply. Despite production cuts in the US “prices will likely remain subdued for a long while to come,” Levin wrote in a briefing note. (SNL)

resources

“Pope to call for global moral solidarity to address ecological crisis”, The Tree, June 16, 2015.


The Pope’s Encyclical on the environment is likely to be a major turning point in the climate change debate. This bulletin provides useful background information and links to a range of resources and actions.


World Energy Outlook Special Report 2015: Energy and Climate Change, International Energy Agency, June 2015. (Pdf) (Executive Summary in English and other languages here.)


The International Energy Agency has flagged a rapid growth of renewables and argues that the use of low-efficiency coal plants should be reduced and the construction of new ones banned to help meet climate targets.


State aid rules in the coal sector and linked energy sector under the Energy Community Treaty and European Law, Bankwatch, June, 2015.


This report argues that proposed investments in coal mines and power plants in Bosnia-Herzegovina, Kosovo, Montenegro, Serbia, and Ukraine are not consistent with the countries’ obligations under the Energy Community Treaty to avoid subsidies distorting the internal European energy market.

The End of Coal?, Four Corners, Australian Broadcasting Corporation, June 15, 2015. (Video)


This 45-minute documentary investigates the prospect of declining demand for Australian coal and the lack of government preparedness for the economic shocks which will affect coal-belt communities.


Jobs After Coal Report: 2015 edition, Coal Action Network Aotearoa (CANA), May 2015. (Pdf)


This is an updated edition of CANA’s report on how communities and workers can prepare for the end of coal mining and move into low-carbon jobs.