November 5, 2020
Issue 346  |  View Past Issues

Editor's Note

An article published this week flagged the intriguing question of where the world’s last coal plant might be built. It is a topic that would have seemed fanciful to even discuss a few years ago but entirely within the near-term future now. As further evidence of the shift, the US-headquartered construction and engineering company, Black & Veatch, announced it would not take on any work on new coal plants.

The pronounced shift away from coal among utilities, banks and insurance companies continues to gather momentum.

In South Africa, ResGen’s proposed Boikarabelo coal mine is in doubt after two of the project’s financial backers have retreated due to concern it is no longer viable. Peabody Energy, one of the hardest line advocates for coal power, is also facing a crisis as an insurance company worried about the company’s financial position has launched legal action to force the company to repay US$128 million in bonds.

Coal-heavy utilities, such as in South Africa and Indonesia, are facing formidable hurdles too. Eskom’s latest annual report reveals that even with a massive government bailout spread over two years the company is still far from viable. In Indonesia, PLN is drowning in debt in large part due to new coal power projects. In both countries electricity consumers face the prospects of significant power price increases to cover the mounting losses of the coal-dependent utilities.

Bob Burton


Who will build the world’s last coal plant?

Energy analysts suggest the world’s last coal-fired power plant is most likely to be built in either China or Indonesia, writes Joe Lo in Climate Change News.

China’s coal addiction clashes with Xi’s bold promise

Chinese President Xi Jinping’s stated aim of achieving carbon neutrality by 2060 will have to confront the challenge of how to restructure the coal and power industry while boosting other sectors of the economy, write Christian Shepherd, Emma Zhou and Katrina Manson in the Financial Times.

Cambodian regime chooses coal in rush for power

The Cambodian Government’s support for the construction of two Chinese-backed coal plants comes with a heavy cost for local residents and farmers, write Michael Tatarski and Chan Muyhong in China Dialogue.

Eskom’s quandary — load shedding or crippling charges?

South Africa’s government-owned utility Eskom’s financial position is now so dire that customers will either have to pay significantly higher tariffs or there will need to be even more taxpayer bailouts, writes Ruan Jooste in the Daily Maverick.

Top News

ResGen’s proposed South African coal mine plan founders: The capacity of the Australian and South African stock exchange-listed company Resource Generation (ResGen) to develop the Boikarabelo coal mine in South Africa’s Waterberg region has been thrown into doubt after the withdrawal of two of four key financial backers. In November 2019 ResGen announced agreements for funding the proposed 6 million tonnes-per-year mine. However, by late October the company, which has no operating mines, flagged it would need US$1 million to keep the company operating through to the end of January. Noble Resources has ruled out providing additional funding to get the project to financial close and South Africa’s Government Employees Pension Fund has also withdrawn its support for the proposal. ResGen’s shares have been suspended from trading until November 9 while it seeks to resolve its financial crisis. (Mining Weekly, ResGen, ResGen)

Judge orders coal company to suspend Colorado road construction: A US Federal Court judge has granted an injunction preventing a subsidiary of Arch Coal from continuing construction work on a road in the Sunset Roadless Area of the Gunnison National Forest until a legal challenge brought by a coalition of environment groups has been heard. Despite an adverse appeals court ruling in March 2020, Mountain Coal subsequently bulldozed a one mile (1.6 kilometres) long road into the area. Mountain Coal’s proposed expansion of the West Elk Mine would require six miles (9.6 kilometres) of new roads and the construction of an estimated 50 well pads to allow drilling of methane vents in the coal seams. (Daily Sentinel, Earthjustice)

Guilty pleas in US utility bailout scandal: A former adviser to then Ohio House Speaker Larry Householder and a former lobbyist for FirstEnergy Solutions, Juan Cespedes, have pleaded guilty to racketeering charges over the US$61 million scandal over US$1.3 billion bailout legislation for two nuclear and two coal plants. Three others, including Householder, also face charges and further arrests are considered likely. Following the guilty pleas FirstEnergy announced it had terminated CEO Chuck Jones and two other executives, stating they had “violated certain FirstEnergy policies and its code of conduct.” The company’s President, Steven Strah, has been appointed as acting CEO. However, a shareholder lawsuit alleges Strah authorised cheques paid to Generation Now, a dark money lobby group at the heart of the scandal. Investment analysts CreditSights estimate First Energy, which has not been charged with any offences but is a part of the ongoing investigation, may ultimately face fines and penalties of up to US$500 million over the scandal. (, Energy and Policy Institute, S & P Global)

Pollution from new Vietnamese coal plant forces relocation: One hundred and four families will be forced to relocate due to pollution from the 1200 megawatt (MW) Hai Duong coal-fired power plant in northern Vietnam. Noise and dust pollution during the test firing of the second 600 MW unit at the plant led to the People's Committee of Kinh Mon town to request permission from provincial authorities to be relocated to another village where 142 households were resettled when work on the plant first started. The plant is owned by a consortium of the Malaysian company JAKS Resources and China Power Engineering Consulting Group. The plant was financed in large part with US$1.4 billion in loans from  Industrial and Commercial Bank of China, China Construction Bank, and China Exim Bank. (Dan Viet, Global Energy Monitor)

Protest against coal port plans shuts down Indian railway: Thousands of residents of the port town of Goa occupied the railway tracks in an overnight protest against plans by South Western Railway to duplicate the rail line to cater for a major expansion of coal freight. Mormugao Port Trust says that by 2030 it is planning to shift up to 52 million tonnes of coal a year through the port where Adani Group, JSW Group and Vedanta each have coal terminals. (Indian Express, Deccan Herald)

Coal baron shunned in Queensland election: Despite coal baron Clive Palmer and his companies spending over A$4.6 million (US$3.3 million) promoting candidates for the Clive Palmer’s United Australia Party, it gained just 15,038 votes or 0.61 per cent of the vote. One of Palmer’s companies is proposing a major new coal mine in the Galilee Basin. The incumbent Labor Party, which has backed the expansion of the state’s coal exports and renewable generation, was comfortably re-elected, losing only one Brisbane seat to the Greens and winning other seats from the conservative Liberal National Party. (Guardian, Brisbane Times, Electoral Commission Queensland)

“We asked ourselves ‘Do we really want to build another coal plant that is going to pollute the air for a very long time to come?’ We decided we don’t. It’s time to recognize that this is just the right thing to do,”

said Mario Azar, President of Black & Veatch’s power business, a major contractor for coal plants.


Australia: Minister of Agriculture, David Littleproud, calls for a boycott of ANZ after the bank announced it would cease lending for thermal coal projects by 2030.

Australia: Apollo, a part of the Lloyd’s insurance network, has ruled out providing further coverage for Adani’s Carmichael coal project.

Australia: NSW Independent Planning Commission reaches deal with Australian Pacific Coal which paves the way for reopening of mothballed Dartbrook underground mine.

China: Steel mills told Australian coal cargoes will not be accepted after November 6.

Philippines: Government-owned energy company PNOC-EC seeks exploration permits for two coal blocks in Zamboanga Sibugay province.

South Africa: As coal mining sector shifts to unlisted private companies, accessing information on plans becomes far harder.

Switzerland: Glencore cuts 2020 coal production estimate by 5 million tonnes as global market sours.

US: Derailment results in 2000 tons (1815 tonnes) of coal spilled into the Roanoke River upstream of the main water supply intake for Salem, Virginia.

US: Xcel Energy’s 857 MW Comanche 3 unit, which was commissioned in 2010, has been out of action since January 2020 prompting an investigation by the Colorado Public Utilities Commission.

Companies + Markets

US insurance company demands Peabody repay bonds: Argonaut Insurance has filed a legal action seeking a judge’s order requiring Peabody Energy to repay US$128 million of bonds issued to cover rehabilitation costs at the company’s coal mines in the US and Australia. In August, Argonaut sought the repayment of US$202 million in bonds citing a condition in its 2017 agreement with the company allowing repayment if Peabody Energy’s financial position was believed to be “deteriorating”. Peabody Energy provided US$75 million in collateral but last week Argonaut filed its legal claim seeking an order for the repayment of the balance. Peabody Energy is set to release its latest quarterly results on November 9. (St. Louis Post-Dispatch, Australian Financial Review [paywall])

India’s coal auctions see no interest from global companies: The auctions of five of the 23 coal blocks up for bids have been completed with Hindalco and UK-headquartered Vedanta Resources among the winning bidders. The five mines contain an estimated 572 million tonnes of coal across the states of Maharashtra, Madhya Pradesh, Odisha and Jharkhand. Adani was an unsuccessful bidder but is reported to have bid on 12 coal blocks. Thirty-eight coal mines were initially offered for sale by the Ministry of Coal but there were no bids for 15 of the blocks. The Modi Government originally pitched the auctioning of the coal blocks as a way of attracting foreign investment from global mining companies with experience in the coal sector but none did; interest was largely confined to small Indian companies. The auctions will continue until November 9. (Livemint,  Scroll, Times of India)

Indonesian power and coal sectors rack up losses: Indonesia’s publicly owned power utility, PLN, has reported a loss of 12.2 trillion rupiah (US$872.8 million) for the nine months to the end of September 2020. Despite a marginal increase on electricity sold, PLN recorded losses due to the weakening of the rupiah against the US dollar as payments to overseas fuel suppliers and most independent power producers are denominated in dollars. The Institute for Energy Economics and Financial Analysis estimates PLN would need to raise electricity rates by about 30 per cent to offset losses, an increase the government is unlikely to consider as the country grapples with the fallout from the COVID-19 pandemic. (Jakarta Post)

Analyst warns on Indonesian outlook: The financial analyst Fitch Ratings estimates the ratings of Indonesian coal companies could be at risk if the current downturn on demand for thermal coal persists through to the end of 2020. Indonesia, the world’s largest exporter of thermal coal, has been hit by a downturn in demand from key importing countries such as India and China. While expecting a gradual recovery in the seaborne coal market in 2021, Fitch Ratings warns of “recurring sporadic lockdowns” which would affect demand for thermal coal in key importing countries. (Fitch Ratings)

Eskom announces losses and confirms it needs government bailout: Eskom has announced it ran at a loss of 20.5 billion rand (US$1.3 billion) in the year to March 2020 with electricity sales declining by 1.3 per cent. Eskom estimates losses in the year to March 2021 are likely to be over 26 billion rand (US$1.6 billion) with a further reduction in power demand due to the COVID-19 pandemic. The utility stated it now has a 484 billion rand (US$29.9 billion) debt and is only viable with a total of 105 billion rand (US$6.5 billion) in government bailouts spread over this year and next year. Eskom CEO Andrew De Royter said the National Energy Regulator of South Africa should approve “cost-reflective tariffs.” Eskom is pitching to reduce its debt by up to 200 billion rand (US$12.4 billion) in green financing for a program of decarbonisation. (Reuters, Eskom)

Change to investment rules raises doubts about four Vietnamese coal plants: A report by the Institute for Energy Economics and Financial Analysis (IEEFA) argues Vietnam’s Law on Public-Private Partnership raises doubts about several proposed coal plants if they do not conclude project negotiations by the end of 2020. The law, which comes into effect in 2021, reins in generous concessions on government guarantees and favourable provisions for investors in build-operate-transfer contracts. IEEFA notes four proposed plants — the 1200 MW Nam Dinh 1, 1200 MW Vung Ang 2, 1980 MW Vinh Tan 3 and 2000 MW Song Hau 2 — represent 6380 MW of the 18,060 MW of coal plants still included in Vietnam’s draft new energy plan. (Institute for Energy Economics and Financial Analysis)

Coal construction contractor flags coal exit: Black & Veatch Corporation, a major global coal plant engineering and construction company, has announced it will “cease participation in any further coal-based power design and construction.” In September, General Electric, another major coal plant construction company, announced it would cease involvement in new coal projects. Black & Veatch, an employee-owned company based in Kansas, said it would complete its current project commitments “in the coming months” and would help existing clients “reduce dependence on coal power assets and minimize the impact of those assets to the environment.” Other major companies which remain involved in new coal plant construction include Siemens, Toshiba and Doosan. (Power Magazine, Black & Veatch)