CoalWire 122, February 25, 2016

February 25, 2016

editor’s note

Companies and governments which took a bet on new coal projects are increasingly regretting their decisions. China is attempting to reel in huge numbers of new coal plants approved by provincial authorities while Indonesia’s financial regulator has warned against new loans being issued to coal miners in the country’s largest coal-producing province. The Mongolian Government however, is hoping to land a loan from a Chinese bank to build a coal railway, even though China’s appetite for coal is waning.

Meanwhile, new data reveals India’s air quality is rapidly getting worse but the private power producer’s lobby group is complaining about new standards designed to limit coal plant pollution. A new study also notes mercury levels in US rainwater samples have been rising since 2007, with one of its authors suggesting the increase may be because of China’s coal plant boom.

Bob Burton
CoalWire Editor

features

Who’s got the dirtiest air of them all?

Analysis of data from the US National Aeronautics and Space Administration (NASA) reveals that people in India are now breathing air more toxic than Chinese residents, write Zachary Davies Boren and Lauri Myllyvirta

Tweet: #India’s air #pollution now worse than #China’s http://bit.ly/24mf646 @Energydesk #coal https://t.co/PjyuARVAZU

Declining Japanese power demand a signal its coal dependency will wane

The 2.7 per cent fall in Japanese electricity demand in 2015 suggests the country’s coal imports may peak this year, writes Tim Buckley from the Institute for Energy Economics & Financial Analysis

Tweet: As #Japan’s electricity sector evolves, signs its #coal dependency will wane ieefa.org/?p=11002 @TimBuckleyIEEFA @ieefa_institute

Bangladesh’s coal power plans provoke major backlash

Two proposed coal plants near the Sundarbans World Heritage Area in Bangladesh have stirred strong community opposition, writes Apoorva Joshi in Mongabay.

Tweet: Why the opposition to Rampal & Orion #coal plants near the #Sundarbans World Heritage Area in #Bangladesh? Here’s why bit.ly/1TqaW7c

top news

Indonesian bank regulator issues warning on coal loans: The Indonesian financial regulator, Financial Services Authority (OJK), has requested banks not to lend to coal companies operating in East Kalimantan. The head of OJK in East Kalimantan division, Dedi Satriaas, warned that with coal export prices continuing to fall, the risks of loan defaults are too high. East Kalimantan is the largest coal producing province in Indonesia, supplying about 250 million tonnes in 2014. Greenpeace Indonesia has welcomed the OJK’s ruling and urged Indonesian banks to comply with OJK’s request. (Sindonews, Antara)


China vows to crack down on new plant permits: The National Energy Administration (NEA) has announced it will cancel proposed new coal plants in regions which are oversupplied and experiencing falling plant utilisation rates. The central government’s delegation to provincial authorities of decision-making on new plants in 2014 resulted in a spike of approvals of unnecessary plants. The head of the NEA also flagged plants under construction in oversupplied regions should be delayed or slowed down. (Reuters, National Energy Administration)


Controversy over Zuma coal deal grows:President Jacob Zuma’s son has been revealed as the single largest individual shareholder in Tegeta Resources and Exploration which is buying Glencore’s Optimum mine. The mine supplies the government-owned utility Eskom. The other major shareholder is a company owned by the Gupta family, who are close to President Zuma. It has also been revealed that the Mines Minister who brokered the deal has a political adviser with business interests associated with the Gupta family. The joint venture will have the right to export 8 million tonnes through the Richards Bay Coal Terminal. (Bloomberg, M & G Centre for Investigative Journalism)

Scientists suggest mercury from China may travel to the US: Since 2007 mercury levels in rainwater have been increasing by about 2 per cent a year across a region spanning from the Rocky Mountains to the Midwest. Pollution control measures implemented in the US and Canada in the 1970’s had resulted in falling levels across most monitoring stations until 2007. The authors of a study in Science of the Total Environmentsuggest mercury from power plants in China could be carried in the upper atmosphere before being deposited in rain in the lee of the Rocky Mountains.(Scientific American)


Indian coal lobby resists higher standards: New pollution and water consumption standards for power plants, which will take effect at the start of 2017, have drawn complaints from the Association of Power Producers (APP) which represents private power companies including Adani. The new standards seek to cut sulphur dioxide, nitrogen oxide, particulate matter and mercury emissions. APP claim power prices could increase by as much as one-quarter, pollution control technology is not available for India’s high-ash content coal and taking plants offline for retrofitting existing plants could “destabilise the grid.” (Economic Times)



US coal lobby slashes expenditure:Expenditure by US coal companies on external lobbyists has halved since 2012 when they spent US$15 million. In the last year Peabody Energy has cut lobbying expenditures by 20 per cent. The budget of the American Coalition for Clean Coal Electricity has fallen by 51 per cent since 2014. However, coal lobby groups have opted to invest their dwindling resources in legal challenges against Obama Administration measures to cut pollution, albeit with limited success. (Bloomberg)

news

Australia: Court approves destruction of koala habitat for proposed Shenhua mine in NSW.


India: Judge orders corruption charges be laid against former Coal Secretary over coal allocation.


India: Tribunal rejects Ministry of Environment bid to keep Tamil Nadu plant documents secret.

Myanmar: Thai TV crew blocked from filming proposed coal plant site.


Sri Lanka: Government approves 500 MW Sampur power plant.


US: Eight arrested in protest over plans by Dominion to pump coal ash dam effluent into rivers.

companies + markets

Peabody Energy’s sale plan falters:Peabody Energy’s sale of three mines in New Mexico and Colorado for US$358 million is on the brink of collapse as Bowie Resources struggles to raise finance. An anonymous source told Platts that “to say that it [the sale] is on life support is an understatement.” Peabody is relying on asset sales to reduce debt. The delay comes as the federal Office of Surface Mining Reclamation and Enforcement is pressing state regulators in Colorado, New Mexico, Wyoming, Illinois and Indiana to determine whether Peabody Energy has sufficient liquidity to qualify for self-bonding for its rehabilitation liabilities on federal lands. (Platts, Reuters)


US slashes coal reserve estimate: The US Geological Survey (USGS) has recalculated the commercial coal resources of the Powder River Basin in Wyoming and Montana – the largest coal producing area in the country – and estimated that mining may be viable for 40 years at most. Coal industry advocates have long claimed that the US has enough coal to last for over 200 years. However, the USGS estimated that while there is over 1 trillion tonnes in deposits, just 23 billion tonnes was considered commercially viable at or below the prices that prevailed at the time of the May 2015 study. (ABC News,  US Geological Survey)


Vale’s Mozambique coal plan sours: In a bid to offset the declining coal price, Vale has cut thermal coal production by 12.9 per cent and increased metallurgical exports from its Moatize mine. The company is currently commissioning the ‘Moatize II’ expansion which is designed to double production to 22 million tonnes a year. The company’s poor financial position has led it to cut its “variable remuneration” payment to employees at the mine, triggering a strike by 1400 workers. The mine has long been controversial, with about 5000 people displaced for its initial construction. (Vale, Zitamar News)

Mongolia seeks Chinese funding for coal railway: The Mongolian Government is seeking a US$1.3 billion loan from the Export-Import Bank of China for the construction of a 240-kilometre railway from the Tavan Tolgoi coalfield to the Chinese border. The Ministry of Finance may act as guarantor for the project, with a Chinese company appointed to replace the South Korean company Samsung C&T as the construction contractor. Mongolian coal exports to China currently rely on long-distance trucking but demand has fallen in recent years. (Bloomberg)


India coal imports to fall further: Indian coal imports are likely to fall from 185 million tonnes in the current financial year to about 155 million tonnes according to Mjunction services, a commodities trading joint venture between Tata Steel and the Steel Authority of India. The projected decline is attributed to inland power generation companies being able to access increased domestic production.(Economic Times)


Panama Canal expansion to open mid-year: The expansion of the Panama Canal, which will allow for larger and deeper-draught ships, is set to be commissioned mid-2016. When the expansion project began in 2007 it was touted as increasing access to the Pacific coal market for Colombian and US exporters. However, with the collapse in the seaborne price for both thermal and metallurgical coal, the benefit for US and Colombian exporters is uncertain. (Platts)

resources

Clean Air Action Plan: The Way Forward, Greenpeace India, February 2014.

This 10-page report documents the rapid increase in air pollution levels in India at the same time as China’s air quality is improving.

Tweet: @greenpeaceindia National Clean Air Action Plan to cut #pollution https://t.co/fQxeLH36Ic #coal bit.ly/1PTtHMX