March 16, 2017
Issue 174  |  View Past Issues
CoalWire

Editor's Note

The rejection of a proposed new coal mine in Poland due to the likely impact on groundwater in a protected area is one of this week’s good news stories. As is the largely successful culmination of a long-running legal action by an Indian women’s group seeking cuts to coal dust pollution at a major coal port. In South Africa, alarm at another proposed open cut coal mine near the country’s premier reserve for white rhinos may be forcing a small coal company to backtrack.

Elsewhere, signals of the speed of the shift away from coal power piles up. In India the government is pondering what to do about 17 already partly-built but financially stranded coal plants. Coal India’s stockpiles continue to grow as power demand is not what it thought it would be. For its part the Australian Government has confirmed it is considering a US$750 million loan to a railway to connect the proposed Carmichael coal plant to a distant port. In Europe, old coal giants RWE and E.ON’s coal spinoff Uniper have racked up more losses as renewables devour their inflexible business model.

Bob Burton

Features

Mine plan threatens South African white rhino reserve

Plans by a South African coal company to mine next to the iMfolozi Game Reserve would threaten an iconic African wilderness area designated for the protection of white rhinos and force the relocation of over 240 people, writes Tony Carnie in Business Day.

China’s development bank plans to leave door open for coal

The Chinese-led Asian Infrastructure Investment Bank (AIIB) plans to leave the door open to funding new coal plants in exceptional circumstances, despite claiming to be a clean and green bank. Its first few energy projects are not coal, but are also not necessarily clean energy, write Liu Qing and Tang Damin in China Dialogue.

Campaigns

Polish lignite mine plan rejected

The Regional Director of Environmental Protection in Poznan has rejected an application by ZE PAK to open a new open-cut lignite mine near Oscisłowo. The project was considered highly likely to adversely affect groundwater supply to Lake Wilczynskie in Pojezierze Gnieznienskie, which is a part of the European Union’s Natura 2000 network of protected areas. The mine was considered by the company as critical to ensure lignite supplies beyond 2020 to its current coal plants. The company has 14 days to decide whether to appeal against the decision. (LM.pl [in Polish], WP Finanse [in Polish])

Indian tribunal orders port to cut coal dust pollution

Following a 12-year legal struggle, the National Green Tribunal has ordered Visakhapatnam Port Trust (VPT) – which imports about 30 million tonnes of coal a year – to control coal dust pollution by the end of 2018 or face fines or restrictions on its operations. The court has ordered VPT and the Andhra Pradesh Pollution Control Board to file quarterly reports to ensure the port is operating under legal limits. The secretary of women’s group Chaitanya Sravanthi, Shireen Rehman, welcomed the tribunal decision: “We got 90% of success in the case as the NGT has ordered the port and PCB to bring pollution under permissible parameters to control fugitive dust emission and make it as clean as possible”, she said. (Times of India)

Top News

Israel confirms cancellation of new plant: Israel's Energy and Water and Finance Ministries have confirmed that plans for a fifth coal plant at the state-owned Israel Electric Corporation’s Orot Rabin plant have been cancelled. The decision follows a direction from the Minister for National Infrastructure, Energy and Water, Yuval Steinitz, for coal use at the four existing units to be cut by 15 per cent in 2016 and a further five per cent in 2017. In August 2016 Steinitz said the four existing 350 megawatt (MW) coal units at the Orot Rabin plant would be replaced by gas units by 2022. (Platts)

Court challenge looms over Kenya plant: Save Lamu, which is campaigning against the proposed 1000 megawatt (MW) plant proposed by Amu Power Company, is pinning its hopes on a legal challenge against what could be Kenya’s first coal plant. The group argues pollution from the plant would damage public and environmental health and the viability of the tourism industry of the World Heritage listed town of Lamu. The legal challenge will be heard on March 22 and 23. In September 2016 the plant was suspended by the local county but approved in early March by the Energy Regulatory Commission. (Reuters)

Indonesia vows to revoke licences over unpaid taxes: Indonesia’s Ministry of Energy and Mineral Resources has warned companies which haven’t paid royalties will be deemed in default of their mining licence conditions and have their permits cancelled. The government estimates US$380.2 million was owed in February by companies in both the coal and broader mining sector. The crackdown on non-payment is being driven by a Corruption Eradication Commission investigation into the mining sector. Indonesia is the world’s largest thermal coal exporter. (Jakarta Post)

Adani’s Cayman Island royalty plan: A company owned by the Adani family and registered in the Cayman Islands, a tax haven, is entitled to the payment of A$2 a tonne (US$1.5) after the first 400,000 tonnes a year from the proposed Carmichael mine. With the mine mooted to produce up to 60 million tonnes of coal a year the agreement is worth up to US$2.3 billion. The Australian Minister for Resources, Matt Canavan, has confirmed an Adani request for a loan of up to $US760 million from the government’s Northern Australia Infrastructure Fund towards the cost of its proposed railway from the Carmichael mine to the port at Abbot Point. (ABC, Reuters)

Eskom launches defamation claim against opposition party: Eskom has launched a defamation action against the Democratic Alliance, the largest South African opposition party, over its reference to a 2015 report by the global law firm Dentons which detailed mismanagement within Eskom - including over coal contracts. In early February a heavily redacted version of the report was released to a handful of applicants under South Africa’s freedom of information law but the Democratic Alliance is seeking an unedited copy of the full report and has vowed to defend the defamation action. (Times, Eyewitness News)

Thai utility seeks prosecutions over social media comments on pollution: Stung by growing public opposition to its proposed coal plants the Electricity Generating Authority of Thailand (EGAT) has filed 15 complaints with police over comments made on social media which it claims defamed the utility. The comments which have EGAT agitated were that pollution from coal plants can cause sickness and deaths and that EGAT wasn’t concerned about the health impacts of its planned plants. EGAT’s complaints, which are being processed by police, also allege the Computer Crime Act was breached, a law which provides for a maximum fine of just over US$2800 or five years imprisonment. (Bangkok Post)

News

Australia: Whitehaven Coal fined US$1140 for not providing a “complete set of documentation” during investigation into blasting events.

Japan: Environment Minister flags emissions and business risk of proposed 1000 MW plant at Chiba.

Macedonia: Court orders arrest of coal and media baron on suspicion of falsifying documents to win coal tender.

Tanzania: President strips Australian company of part of coal licence to help Dangote cement plant.

Thailand: EGAT to seek bids soon from consultants for new Krabi environmental and health report.

UK: United Nations rapporteur alarmed by lack of investigation into possible health effects from Welsh mine.

US: Former Southern Company lobbyist turned temporary Trump appointee seeks to bypass hearing of youth climate court challenge.

US: Industry backed bill proposes eliminating safety inspections in West Virginia mines.

Companies + Markets

India flags need to rescue sinking power companies: The Indian Government has requested the Power Finance Corporation Limited and Rural Electrification Corporation Limited investigate the creation of a Stressed Assets Equity Fund and a Stressed Assets Lending Fund as a vehicle to rescue some of the 17 stalled coal plants. The plants, which are partly built, have a combined capacity of 18,420 MW. Falling plant utilisation rates have crippled the sponsoring companies’ ability to attract private finance to complete the projects. (Indian Express)

Coal India stockpiles climb: The Minister for Coal, Piyush Goyal, has advised the Indian Parliament 81 million tonnes of thermal coal is stockpiled with just over 26.15 million tonnes at power plants and a further 54.85 million tonnes at Coal India mines and railheads. Coal India’s stockpiles represent almost 10 per cent of the 570 to 578 million tonnes the company is expected to produce in the year to the end of March. (Economic Times, Livemint)

Uniper posts more coal writedowns: In its first year in operation after being spun off from E.ON, Uniper has recorded a net loss of US$3.4 billion and an impairment charge of US$3.1 billion due to lower estimates of future power prices and “policy issues relating to decarbonisation.” The company also warned legal challenges to mercury emissions from its part-built US$1.5 billion 1100 MW Datteln 4 coal plant in Germany could further delay the commissioning of the plant. (Platts, Uniper)

RWE takes another coal hit: Unveiling its 2016 financial results, RWE, which is the largest carbon dioxide emitter in Europe, revealed wholesale electricity prices for its lignite plants were lower than the previous year and are expected to be “significantly” lower in 2017. The company recorded a US$1 billion impairment on its German fleet of ‘conventional’ power plants, including lignite and hard coal plants. The company flagged its aim of playing a significant role in providing back-up capacity from its conventional generation plants to ensure “security of supply” and expanding into the rapidly growing large scale battery storage market. (Platts, RWE)

UK capacity contracts expensive but unused: A capacity payments market to keep old coal plants online to avoid the risk of winter blackouts cost US$220 million but was not needed. The Supplemental Balancing Reserve, which operated over three winters since 2014, finished at the end of February. Originally envisaged as likely to be required several times a year, the National Grid attributed the lack of use to warm winters in two of the three years. (Times (reg. req’d))

Japanese utilities to be hit with higher coal costs: Japanese power utilities, which rely entirely on imported coal, face a fuel price hike of at least 29 per cent as the prices of the annual coal contracts are renegotiated. In 2016 Japanese utilities paid US$62 a tonne for thermal coal, with market analysts tipping the 2017 price is likely to settle in the US$81-85 a tonne range from April. China’s restrictions on coal production resulted in imports soaring and prices spiking in mid to late 2016. While restrictions were subsequently relaxed, uncertainty remains about the likely impact of China’s policies this year. (Bloomberg)