CoalWire 3, 12th September 2013

CoalWire

CoalWire is a weekly news bulletin which summarises the most significant developments affecting the global coal industry and highlights the efforts of groups around the world working on coal-related issues. Suggestions of material for future bulletins should be sent to [email protected].

campaigns

Europe: European Bank Under Pressure to Back Away from Coal Lending

After a campaign by CEE Bankwatch Network and Serbian environmental group CIKOR, the European Bank for Reconstruction and Development (EBRD) announced that it is no longer considering support for the dirty Kolubara B lignite power plant in Serbia. The decision comes as the EBRD is in the process of reviewing its energy strategy. Campaigners have been pushing for the bank to end its coal lending, in line with recent decisions from the World Bank and European Investment Bank.

India: Campaigners Condemn Banks in Coal India Share Offering

Greenpeace, the Rainforest Action Network (RAN), and other members of the BankTrack network called for Bank of America and other U.S. and European banks to withdraw from an upcoming share offering by Coal India Limited, one of the largest coal miners in the world. Credit Suisse, Deutsche Bank, Goldman Sachs, and three Indian banks were also selected for the share offering. Greenpeace has called attention to Coal India’s egregious human rights and environmental record, while RAN targets Bank of America’s financial support for the coal industry. RAN and Greenpeace will be stepping up pressure on these banks in the coming weeks to drop their involvement in the deal.

top news

Australia: Clive Palmer, the proponent of the 40-million-tonne-a-year Galilee Coal Project in Queensland, is likely to win a seat in the lower house of Federal Parliament. Two candidates from his Palmer United Party will share the balance of power in the Australian Senate from July 2014. The new conservative government plans to expedite the approval of new coal projects, abolish the carbon price and curtail renewable energy. (The AgeNews.com)

Bangladesh: The leader of the opposition Bangladesh Nationalist Party has promised that if elected his party will scrap the 1,320 megawatt Rampal power station proposed to be built near the Sundarbans World Heritage site. Elections are due by early 2014. (Dhaka Tribune)

India: The Adani Group should be fined approximately US$3 million for damaging mangroves and the environment at the company’s Mundra Port, a committee established by the Minister of Environment has recommended. In February 2013 Greenpeace documented Adani’s poor environmental track record in India.(Economic TimesGreenpeace)

Indonesia: The Indonesian Coal Mining Association wants an increase of royalties by 6.5 to 7 percent deferred until international coal prices increase from the current US$77 to over US$100. While the increase would only apply to mostly newer and smaller mines, the industry claims the change could cut coal exports by 40 percent. (Reuters)

Mozambique: The engineering company Worley Parsons has been appointed to manage the construction of a new 585-kilometre railway line from Vale’s Moatize mine to the port of Nacala. The railway is planned to carry 18 million tonnes of coal per annum and supplement the lower volume and unreliable Sena railway to the port of Beira.(Worley ParsonsCoalSwarm)

South Africa: The government-owned utility Eskom is investigating alternative ways of raising equity funding to alleviate a funding crisis. Eskom is faced with rapidly growing debt due to the construction of new power stations and lower than expected revenue due to opposition to rate hikes. (FT.com)

United States: Public opposition has prompted the delay of a municipal decision on a proposed US$1.2 billion coal export terminal in Mobile, Alabama. Walter Energy, which has seven metallurgical coal mines in Alabama, is seeking additional export capacity. (Al.com)

Zimbabwe: China Africa Sunlight Energy, a joint venture between Old Stone Investments Ltd of Zimbabwe and the Chinese government-owned Shandong Taishan Sunlight, are promoting plans to spend US$2.1 billion on thermal and metallurgical coal mines and a 2,100-megawatt power station.  The projects have the support of Zimbabwean President Robert Mugabe.(BloombergXinhua)

news

Australia: NSW Minerals Council opposes covering railway coal wagons to reduce pollution.

Australia: Shenua blocks release of documents on projects approved by disgraced Minister.

Canada: Doctors call for phase out of Alberta’s coal power stations.

Canada: As opposition from First Nations grows, coal company flags buyout option.

Germany: Climate protesters camp at Manheim, a town due for demolition for a coal mine.

India: Coal importers seek to delay shipments due to the falling value of the rupee.

India: The Cochin Port Trust is calling for bids to build a 5 million-tonne-a-year coal terminal.

Philippines: The Philippine National Oil Company may cancel two coal projects.

South Africa: Controversy over dumping coal from stricken coal ship.

United States: Indian tribe announces opposition to a new coal export terminal.

United States: The Illinois pro-coal school curriculum is on the rocks.

United States: Montana ranchers oppose new coal mine and railroad plans.

United States: Coal company executive jailed over illegal tip-offs on safety inspections.

New Zealand: Doctors challenge new coal mine over potential health impacts.

Vietnam: Power price rises sought to cover power utility’s debts from rising gas and coal prices.

Vietnam: Coal export tax cut to placate Vinacomin, the government-owned coal company.

“Poor coal. It’s the mineral not even a mother could love. It’s the orphaned rock, dirty to burn and easy to hate,”

wrote David Brett in an editorial defending coal exports from Vancouver. Brett is an adviser with the Canadian PR firm Greenspirit Strategies.

companies + markets

GlencoreXstrata: The world’s largest thermal coal exporter, GlencoreXstrata, has announced the shelving of ten coal projects – seven in Australia, two in Canada and one in South Africa. The most significant of the delayed projects is the US$6.5 billion Wandoan project in Queensland. However, the company has flagged that it will continue with studies on another six projects with a combined resource of 4.7 billion tonnes.(GlencoreXstrata)

Peabody: Two weeks after Moody’s downgraded the credit rating of coal company Peabody, Bloomberg reported that the company is seeking a US$1.2 billion loan to refinance its debt. The company has US$862.5 million of loans due in October 2016 and US$301.8 million of loans loan that mature in June 2015. (Bloomberg)

Tata Power: The financial ratings agency, Standard & Poor’s (S&P), has downgraded the credit worthiness of Tata Power due to weak cash flow from its Indian power stations, higher imported coal costs and the poor performance of its Indonesian coal mines.Tata has reached an agreement with lenders over breaches of loan agreements relating to the troubled 4,000MW Tata Mundra Ultra Mega Project. (Business StandardBloomberg)

Walter Energy: The credit rating of coal company Walter Energy has been downgraded by Standard & Poor’s after the company announced that it wouldn’t proceed with a plan to refinance part of its debt. In August S&P downgraded the company due to weak prices for metallurgical coal. The company has sixteen operations in the United States, Canada and United Kingdom. (Wall Street Journal)

“Current price levels are unsustainable in the medium term, with close to 30 per cent of seaborne thermal production being cash-cost negative,”

GlencoreXstrata, the world’s largest thermal coal exporter told investors.

resources

take action

Citi Research, The Unimaginable: Peak Coal in China, Citi, September 4, 2013.
This 32-page report states that coal consumption in China is likely to peak between 2014 and 2020, and after this China is likely to dramatically cut its demand for coal.
Tata Mundra, the massive 4,000 megawatt coal power project in western India, is in its final phase of review by the International Finance Corporation’s Compliance Advisor Ombudsman (CAO). Indian groups are asking allies from around the world for help in writing to World Bank President, Dr. Jim Yong Kim, asking him to take bold action on the findings of the CAO. For more information and a sample letter contact Soumya Dutta or Joe Athialy.