September 21, 2017
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CoalWire

Editor's Note

Legal challenges and a shareholder resolution reflect the growing role of the courts and shareholder activism in curbing the excesses of the coal industry. In India, a Supreme Court ruling may result in a Coal India subsidiary being hit with a US$3.2 billion fine for illegal coal production. This coincides with Coal India unveiling plans to become a multi-commodity mining company as the rise of renewable power is curtailing future demand for coal. In the US, a court has rejected the argument – used in cases around the world – that the rejection of a mining licence would have no climate benefit as other coal would simply be used instead.

In Greece, an environmental group is challenging the government’s use of legislation to put the permits for polluting coal plants beyond legal review. In Australia, a shareholder resolution submitted to BHP urges the company to terminate its membership of coal lobby groups advocating policies inconsistent with the Paris Agreement. In South Africa, the accountancy firm KPMG and the consultancy firm McKinsey are  now embroiled in the ever-growing Eskom-Guptas coal deals scandal. On the upside, the South African Minister for Energy has indicated that 2500 megawatts (MW) of proposed new private coal plants will be put on hold for the moment.

Bob Burton

Features

Inquiry into South Africa’s Eskom to shed light on scandals

A parliamentary inquiry into scandals engulfing Eskom is likely to reveal how a series of deals with the controversial Gupta family companies threatens the utility’s financial viability and its ability to improve the welfare of all its citizens, write Anton Eberhard and Catrina Godinho from the University of Cape Town in Fin24.

BHP under pressure to dump pro-coal lobby groups over climate policy

A shareholder resolution highlighting the chasm between BHP’s stated climate policy and the pro-coal advocacy of the Minerals Council of Australia has pushed the company to reconsider its membership of the group, writes Bob Burton in EndCoal.

Even when it’s sitting in storage, coal threatens human health

The increased health costs of fine particle air pollution from coal stockpiles and transport warrants stricter regulation, writes Akshaya Jha from Carnegie Mellon University in The Conversation.

Top News

Coal India subsidiary may face huge fine over illegal mining: The Supreme Court of India has ruled as illegal all mineral production from iron ore and manganese mines in Odisha which are operating in violation of their forests, environmental and mining licences. The ruling has prompted the Ministry of Environment, Forest and Climate Change to defer the approval of further coal projects in the state. An anonymous official has indicated Mahanadi Coalfields, a Coal India subsidiary which operates in Odisha, has produced over 435 million tonnes of coal in breach of one or more licences since 2000 and could be liable to a fine of up to US$3.2 billion. (Economic Times)

Court directs US agency to reconsider coal’s climate change impact: A US appeals court has directed the US Bureau of Land Management (BLM) to reconsider the climate impacts of issuing four new mining leases to allow the expansion of the Black Thunder and North Antelope Rochelle mines in Wyoming. Together the two mines produced 188 million tonnes of thermal coal in 2015, one-quarter of US production. The BLM had argued the mine expansion would have no net effect on climate change as coal power plants would simply source fuel from elsewhere. The court noted the BLM’s claim was not based on evidence presented to the court. (Pittsburgh Post-Gazette, WildEarth Guardians)

US rolls back coal regulations: The Trump Administration has ordered a two-year delay in the implementation of 2015 standards regulating the discharge of heavy metals from power plants into lakes and waterways. The deadline for meeting the new limits had previously been set for November 1, 2018. In response to lobbying by a utility lobby group, the US Environmental Protection Agency has also announced it will reconsider parts of a separate rule, which was finalised in 2015, regulating the disposal of coal ash waste. (Utility Dive, The Hill)

Greece accused of insulating illegal plants from legal challenges: WWF Greece, represented by ClientEarth, is challenging the Greek Government’s use of legislation to grant and renew permits for coal plants owned by the state-owned Public Power Cooperation. Although the Aarhus Convention requires European Union members to ensure access to environmental justice, Greek legislation of coal plant operating and environmental permits prevent legal review of the projects. If the complaint to the Aarhus Convention Compliance Committee is upheld, PCC’s coal-fired plants may be vulnerable to legal challenges. (Euractiv, ClientEarth)

Adani protests erupt over Australian mine plan: Ten people were arrested on trespass charges after blocking an access road to the Abbot Point coal terminal, which is operated by Adani and is proposed as the export point for coal from the company’s proposed Carmichael mine. The mine and associated railway have yet to gain financial support. However, the Australian Government and the Queensland opposition Liberal-National Party have proposed using government funds to build a new coal plant in North Queensland. (ABC News, Guardian)

“We have confirmed our joint commitment to supporting the global transition away from a reliance on coal as an energy source. Once again, the UK and Canada will lead the way, and I am pleased to announce that the UK will aim to phase out unabated coal by 2025,”

said UK Prime Minister, Theresa May, in a joint press conference with Canadian Prime Minister Justin Trudeau.

News

Bosnia: Chinese company ponders US$1.2 billion deal to fund 430 MW plant and Kamengrad mine.

China: Provincial officials disciplined for poor environmental enforcement ahead of mid-October Community Party conference.

India: Lawsuit requests Delhi High Court oversee investigation of over-invoicing allegations against Adani and other power companies.

New Zealand: Fearing impact on spotted kiwi and pollution impacts, group urges rejection of mountaintop mine near Westport.

Thailand: Human Rights Commissions hears villagers’ complaints against Thai owners of Myanmar coal mine.

US: Despite approvals, the proposed 895 MW Holcomb expansion in Texas is unviable and unlikely to proceed.

US: National Mining Association plans to hold conference at Trump International Hotel in Washington D.C.

“I will suspend operations at aged coal power plants regularly during spring every year and move up their closure as much as possible,”

said South Korea’s President Moon Jae-in on his government’s efforts to cut fine dust pollution.

Companies + Markets

South Africa’s proposed private coal plants frozen: With falling demand and a growing power surplus South Africa’s Energy Minister, Mmamaloko Kubay, has signalled a freeze on plans for 2500 MW of proposed private coal plants until a review of future energy needs has been completed. The government has stated it wants power purchase agreements for renewables projects completed by the end of October, but only if they agree to revise prices down to lower than 7.5 US cents per kilowatt hour. (Bloomberg)

Gupta scandal fells KPMG South Africa: Nine of KPMG South Africa’s executives, including the CEO and Chief Operating Officer, have quit after a damning internal audit of the accountancy firm’s work for the controversial Gupta family companies. The report found the firm did not “adequately deal” with information on the deal to obtain the Optimum coal mine from Glencore which “called into question the integrity of the Guptas.” The rapidly escalating scandal over the role of the Gupta companies in South Africa has caused the collapse of the UK-based PR firm Bell Pottinger, triggered calls for KPMG to be blacklisted by government agencies and put the spotlight on companies such as McKinsey for their role in the deals. (Bloomberg, Bloomberg)

Coal India seeks to diversify away from coal: In a bid to reduce its risk to declining coal demand due to the growth of renewable power the government-owned Coal India has announced it wants to diversity into the production of other minerals. In 2014 the Modi government announced Coal India had a production target of 1 billion tonnes by 2020. However, as power demand growth stalls, this year’s original target of 660 million tonnes has been slashed to 600 million tonnes. (Livemint)

Renewables passing key tipping points: The founder of Bloomberg New Energy Finance (BNEF), Michael Liebriech, told the annual BNEF summit that wind and solar costs were already close to being the cheapest form of new energy almost everywhere in the world. He also argued solar and wind would be cost competitive with existing coal and gas plants before 2030. “Nobody is going to make coal great again,” he said. (BusinessGreen, Michael Liebriech)

Resources

A Resource for Parliament’s Public Enterprises Inquiry Civil Society, Journalists & Engaged Citizens, University of Cape Town’s Graduate School of Business, September 2017. (Pdf)

This 26-page backgrounder provides a concise overview of the main controversies which have dogged Eskom over its governance and alleged instances of ‘state capture’ and corruption.

Corporate Water Risk Assessment Tool: A Look at China’s Coal Companies, Institute of Public & Environmental Affairs, September 2017. (Pdf)

This 45-page report finds China’s 30 largest listed coal mining and power companies are very exposed to water shortages and at significant risk due to the poor management of pollution and legal compliance.

No Country for Coal Gen: Below 2°C and Regulatory Risk for US Coal Power Owners, Carbon Tracker Initiative, September 2017.

This 60-page report details the exposure of each US utility to coal and how phasing-out coal power could save US citizens money and make the economy more competitive.

“Handle with Care: The Local Air Pollution Costs of Coal Storage,” National Bureau of Economic Research, May 2017. (Abstract)

This US paper estimates fine particle pollution spreads up to 25 miles downwind of coal stockpiles, increasing the health impacts in surrounding communities and especially for children.