CoalWire 8, 10th October 2013

India’s coal bubble

A rapid increase in Indian coal demand has been a central theme in the coal industry’s ‘boom time’ narrative. However, the hype is becoming harder by the day to sustain: coal plants standling idle without coal to burn, the increasing costs of coal, loans souring, the lack of finance for new projects and developers unable to find buyers for part-completed plants. “Now the Indian coal bubble may have popped and no one seems to realize they’re standing in the rubble,” writes Justin Guay, the Associate Director of the Sierra Club’s International Program. (Huffington Post)

campaigns

Protests against World Bank’s fossil fuel funding

The Reclaim Power! Month of Action on Energy kicked off last weekend with protests outside the offices of the World Bank in Washington and Manila and against dirty energy projects in South Africa, India and Indonesia. The month of protests is aimed at highlighting the World Bank’s role in financing destructive energy projects around the world. Whilst the World Bank’s rhetoric suggests a move away from financing coal, its backdoor support for a coal plant in Indonesia and proposed loan for a 600 megawatt (MW) lignite coal power plant in Kosovo paint a different picture. Current loans for the 4,000MW Tata Mundra coal plant in India and the 4,800 MW Medupi coal plant in South Africa are also controversial. (Reclaim Power!)

US activists celebrate 150th plant milestone

With the announcement of the scheduled retirement in 2017 of the Brayton Point Power Station in Massachusetts, the Sierra Club and 100 allied groups are celebrating the 150th announced plant closure since 2010. The 150 plants represent over 60,000 megawatts (MW) of installed capacity and over double the capacity the campaign anticipated would be closed by 2020. The Sierra Club estimates that the 150 coal plant retirements will help to save 4,000 lives every year, and prevent 6,200 heart attacks and 66,300 asthma attacks every year. Three hundred and seventy two coal plants with an installed capacity of 282,000MW remain operating. (Sierra ClubMike Bloomberg,Sierra Club infographic)

top news

Australia: Despite falling prices and slowing demand, Port Waratah Coal Services is seeking approval for a new coal export loader in Newcastle. While the plan has been scaled back from the original 120 million tonnes a year proposal to 70 million tonnes- a-year, the project is encountering strong opposition from the local community. (Newcastle Herald, Newcastle Herald) (See ‘Take Action’ below)

Australia:  Horse stud owners, wineries and farmers have spoken at a public hearing against a plan by Anglo American to expand the Drayton mine and extract an extra 117 million tonnes of coal. Without the expansion, the current Drayton mine is due to close in 2017. (Singleton Argus)

China: The central government has announced a US$818 million fund for Beijing and surrounding provincial government programs to cut air pollution. Hebei province – which aims to cut coal consumption by 40 million tonnes and steel production by 60 million tonnes within five years – is a high priority for the program. (China Daily)

India: The government-owned Ennore Port Ltd is proposing to build a new coal import terminal to cater for increased coal demand by the state-owned power utility, the Tamil Nadu Generation and Distribution Corporation. The board of Ennore Port is proposing to sell tax-free bonds to raise the funds to cover the US$40 million cost of the proposed four million tonnes per annum terminal. (Livemint)

India: The Coal Ministry is seeking government approval to extend what were initially three-year coal allocations to allow private power producers to commission power plants while they developed their own coal mines. The proposal would immediately benefit a small number of companies with over 4,000MW of new plants. (The Hindu)

Philippines: Four civil society groups have called for a moratorium on the development of further coal plants. Twenty-eight coal plants have been approved for construction and another 21 have been proposed. (Sun Star)

United States: Opponents heavily outnumbered supporters at the fourth of five public hearings on the proposal to build a coal export terminal at Longview in Washington state. Millennium Bulk Terminals-Longview is owned by the Australian company, Ambre Energy, and US-based Arch Coal.  (Ventura County Star)

news

Australia: Abandoned exploration licence sale signals end of new export plan.

Australia: Adani refinances Abbott Point coal terminal.

Australia: Sydney water authority wants a ban on longwall mining in water catchments.

Australia: Queensland government to fast-track new coal exploration licences.

China: Datong Coal Mine Group named for breaching environmental laws.

Czech Republic: Five executives convicted of fraud in coal privatisation scam.

Colombia: Bomb blast derails coal train and damages track from Cerrejon mine.

Egypt: Call for United Arab Emirates to replace Turkish firm in Maghara coal mine.

Ireland: Increasing emissions from electricity sector prompt call for coal shut down.

NZ: Activists press Westpac to pull out of funding proposed Denniston mine.

NZ: The government-owned Solid Energy has mothballed its new lignite briquetting plant.

Pakistan: Government publishes tariffs proposed for new private coal plants.

Uganda: Government suggests importingcoal from Mozambique to develop steel mills.

US: Navajo Nation leaders push to buy BHP Billiton’s declining Navajo mine.

US: Ninety businesses sign letter urgingclosure of ageing New Hampshire coal plants.

US: Water extraction for coal bed methane caught in cross-border water dispute.

“The extremists plotting to shut down this industry are very clever. They know delay can kill projects,”

Queensland Resources Council chief executive Michael Roche complained to the Courier Mail.

companies + markets

China considers dropping export tax:  The Chinese government is considering scrapping the ten per cent export tax on coal from January 2014. If the tax is dropped the four major licenced exporters – the China National Coal Group, Shanxi Coal Import and Export Group, Shenhua Group and Minmetals Group – are likely to be more competitive with exports from Australia. (Reuters)

CONSOL ponders restructuring: CONSOL Energy, a US coal and gas company, is considering options for a major restructuring including the sale of some or even all of its coal assets. The company, which produced 56 million tonnes of coal in 2012 from its mines in the US, has confirmed that “all options” are being considered in a corporate restructuring.  (Wall Street Journal, CONSOL Energy)

Moody’s downgrades Bumi: The ratings agency Moody’s has downgraded its rating of the Indonesian coal exporter Bumi Resources. Moody’s bluntly stated that there was a “high probability of near-term default for the thermal coal producer given its substantial upcoming debt maturities.” Moody’s states that Bumi’s restructuring of its US$1.3 billion debt with China Investment Corporation (CIC) will “only provide short-term relief” as a further US$800 million in debt falls due in 2014. (Moody’s)

Banks exposed to coal terminal losses:Australia’s four major banks are exposed to major losses on A$3 billion lent for the construction of part-completed Wiggins Island Coal Export Terminal in Queensland. Even though the terminal may only operate at half capacity when commissioned in early 2015 the coal companies which own it – including Xstrata, Yancoal and Wesfarmers – have entered into ‘take or pay’ contracts with the terminal. “There are very real risks that some of the parties can’t meet their take-or-pay obligations,” said one investment adviser.  (Bloomberg)

Coal India backtracks on reserve estimates: The government-owned coal mining company, Coal India Limited (CIL), has downgraded its estimated coal reserves by 3.5 billion tonnes or sixteen per cent following revelations by Greenpeace that it had overstated its assets. On September 23 Greenpeace filed a complaint with the Securities and Exchange Board of India arguing that CIL was misleading potential investors in a part-privatisation. (Business Standard, Greenpeace)

“The coal industry will not slip quietly into the night. They will fight hard to protect their diminishing market share. But today, as we mark this important milestone, we can say that the sun is setting on the coal era in America – and as a result, our future looks brighter than ever,”

wrote New York Mayor Mike Bloomberg on the announcement of the 150th coal plant scheduled to close.

resources

A guide to Indian scandals under investigation

Which Indian companies are being investigated for their role in various scandals, including ‘Coalgate’? The Business Standardhas compiled a brief overview of the Coalgate scandal and a guide to companies involved in coal and other scandals.

take action

Australia: Help stop the world’s biggest coal export terminal get any bigger 

The Hunter Community Environment Centre (HCEC) is requesting submissions from around the world in opposition to the proposal by Port Waratah Coal Services for a new coal terminal to facilitate the export of billions of tonnes of coal. Both brief and detailed submission guides have been prepared by HCEC but something in your own words will have most impact. Make your submission via the HCEC website. After making your submission please encourage others to do one too.

Suggested Tweet: Make a submission on proposed 4th #coal terminal for Newcastle, Australia http://bit.ly/1cqIiv3 Submissions close Nov 22 but do one now

India: help spread the word on the India coal bubble

Suggested Tweet on ‘India Coal Bubble’: ‘India’s Coal Bubble’ http://huff.to/1cpMIlU  A must-read overview of the financial troubles enveloping #coal power in #India@Guay_JGuay