If there are two dominant coal themes from the last fortnight they are the seemingly endless number of scandals and other controversies companies are involved in and the receding support for coal power and mining among financial and political institutions.
In the US, a senior executive with the Drummond Company has been convicted of bribing a state MP to help oppose a proposed environmental clean-up. In Indonesia, a proposed coal plant has been suspended after the anti-corruption agency arrested an MP allegedly bribed to help facilitate the project. In Bangladesh, a corruption investigation has been launched after the country’s only coal plant was forced to close due to 140,000 tonnes of coal going missing. In India, the CEO of Jindal Steel and Power, Naveen Jindal, is set to face a further charge over a coal allocation. In Canada, controversy has emerged over TransAlta’s hiring of a public health academic who suggested lobbying talking points for the power utility. In Poland, there have been revelations that Europe’s largest coal power station has been massively understating its mercury emissions.
On the financial front, Ireland’s lower house of parliament has voted to divest from all fossil fuels. In Japan, the country’s largest insurance companies are increasingly staking out bolder positions ruling out funding new coal plants anywhere. In France, two more insurance companies have ruled out investing in companies that are proposing new coal plants. In Spain, high coal and carbon prices, combined with the cost of complying with new emission standards, are pushing coal plants to retirement.
Locals in UK coal belt oppose new coal mine
The UK Government’s refusal to veto Banks Group’s proposed Pont valley coal mine has spurred public opposition including from the Durham Miners’ Association, writes Sandra Laville in The Guardian.
Burning brimstone promises fresh hell for coal
If South Korea’s new limits on the sulphur content of thermal coal are adopted elsewhere this will only accelerate the shift away from fossil fuels to renewables, writes David Fickling for Bloomberg.
US coal company executive convicted on corruption charges: Drummond Company Vice President of Government Affairs, David Roberson, and a lawyer from Balch & Bingham who was working for the company, have been convicted on six federal charges relating to bribing Democratic Alabama state politician Oliver Robinson. Robinson has already pleaded guilty to accepting bribes to oppose an Environmental Protection Agency proposal to expand a designated clean-up area around Drummond’s coke processing plant in Tarrant, Alabama. All three have yet to be sentenced. Drummond also operates coal mines in Alabama and Colombia. (Al.com, Al.com)
Proposed Indonesian coal plant suspended after arrests: Indonesia’s state-owned electricity company, PLN, has suspended work on the proposed 600 megawatt (MW) Riau I plant after the Corruption Eradication Commission (KPK) arrested House of Representatives member Ms Eni Maulani Saragih. KPK said Eni was a suspect in an investigation into an alleged US$333,629 bribe paid by Johanes Budisutrisno Kotjo, a shareholder in the Singapore-headquartered BlackGold Natural Resources, a coal company involved in the project. KPK alleges that Eni, who was a member of a parliamentary committee that oversees energy, was bribed to help facilitate the approval of the project. BlackGold insist Kotjo’s role as a consultant ended in June 2018 and that the company’s directors were “not involved whatsoever” in the attempted bribery. KPK has also raided PLN’s offices and seized documents. (Jakarta Post, Jakarta Post, BlackGold Natural Resources)
Indian coal and power CEO to face another bribery charge: A special court of the Central Bureau of Investigation (CBI), India’s anti-corruption agency, has ordered an additional charge be filed against Naveen Jindal, CEO of the Jindal Group, over alleged irregularities in the allocation the Amarkonda Murgadangal coal block in Jharkhand to Jindal Steel and Power Limited (JSPL). The charge of abetment of bribery will be formalised at a court hearing on August 16. The CBI alleges that JSPL spent 20 million rupees (US$290,000) to influence members of the committee overseeing the allocation of coal blocks. Jindal, who was a member of India’s lower house until 2014, has also been charged with criminal conspiracy, cheating and criminal breach of trust. Jindal rejects the allegations. (Economic Times)
As coal starved plant shuts down, Bangladesh launches corruption investigation: The Anti-Corruption Commission (ACC) has launched an investigation after the Barapukuria power station was forced to close down when 145,000 tonnes of coal reportedly went missing from the nearby coal mine. The plant is Bangladesh’s only operating coal power station. Four mining company officials have been suspended pending the completion of the investigation. The mine’s Administration Manager has filed a complaint with local police alleging 19 company employees were involved in stealing the missing coal. An anonymous mine official claimed the discrepancy between mine production since 2005 and current stocks may have been due to a combination of losses due to spontaneous combustion and coal washed away in storms. (Daily Star, Daily Star, Dhaka Tribune)
Canadian utility-funded academic honed corporate talking points: Documents obtained under access to information laws reveal that shortly after Rachel Notley's New Democratic Party (NDP) won the Alberta provincial election, TransAlta paid the University of Alberta C$54,000 (US$41,000) for a study on fine particle air pollution. The privately owned utility, which has five coal plants in Alberta, specified that the study be undertaken by Associate Professor Warren Kindzierski from the University’s School of Public Health or an approved alternative. Notley’s NDP was elected with a policy of phasing out coal plants. Kindzierski’s study, which did not disclose that it was funded by TransAlta, stated coal combustion emissions were only a “small” part of Edmonton’s pollution. A government study found the province was on track to have the worst air quality in Canada. The documents also reveal Kindzierski assisted TransAlta with lobbying materials including talking points on his study. (CBC)
Alarm over discrepancies in Polish mercury emissions data: Concern has been raised that PGE has been underreporting mercury emissions from its 5420 MW Belchatow plant in central Poland to European Union (EU) regulators. The plant is the biggest mercury emitter in the EU. New EU data reveals that mercury emissions from the plant were 18 times higher in 2016 than in 2015. A Polish news outlet subsequently reported that emissions monitoring data for the plant indicated its mercury pollution could have been 4.2 tonnes in 2016 instead of the 2.82 tonnes reported to the EU. New EU standards require emissions to be reported based on actual monitoring data rather than estimates, as used previously. (MetaMag)
“Brown coal is politically and morally worn out,”
said Vlatko Knezevic, the managing director of the public utility serving Cottbus, a city in one of Germany’s major lignite mining areas.
Australia: Citing its support for coal power, Collie Shire Council in Western Australia has voted against a plan to save A$450,000 (US$332,000) over a decade by installing rooftop solar.
Australia: NSW Government renews mining licence for proposed Shenhua mine on Liverpool Plains.
India: Coal India puts on roadshows for investors in the UK, Singapore and Hong Kong as government hopes to sell another five to 10 per cent stake of the company.
Germany: As renewables output increases, VDKi estimates that coal imports may fall by up to 12 per cent in 2018 to 45 million tonnes.
Malaysia: High thermal coal prices have led regulator to approve increased electricity prices.
Myanmar: Over 200 residents protest against pollution from coal-fired antimony refinery plants.
Philippines: Over 200 protest against proposed 1340 MW plant in Luna in La Union province.
Slovenia: HSE shuts 46 year old 275 MW Unit 4 at the controversial Sostanj plant.
Singapore: Coalition of NGOs push local banks to stop funding coal plants.
US: Former coal industry lobbyist now EPA Administrator weakens coal ash management standards.
US: Study reveals one in five miners in West Virginia, Kentucky and Virginia who have worked in coal mines for over 25 years have black lung disease.
US: Eight former officials at now defunct Armstrong Coal have been charged with deceiving federal safety regulators over dust levels in two of the company’s Kentucky mines.
French insurance companies rule out investing in companies with new coal plants: Macif and AG2R La Mondiale, two major French insurance companies, have announced they will no longer invest in companies planning new coal-fired power plants. RWE, the largest coal generator in Europe and largest global lignite miner, will be the company most adversely affected as it accounts for about 70 per cent of the two companies’ coal investments. Once Macif and AG2R La Mondiale’s divestment is complete only two of the eight insurance companies which invested in RWE will remain: BNP Paribas and Munich Re. (Euractiv)
Ireland legislates to dump coal and other fossil fuel investments: The lower house of Ireland’s parliament has, with the support of all parties, passed legislation requiring the €8 billion (US$9.3 billion) Ireland Strategic Investment Fund to sell all investments in coal, oil, gas and peat “as soon as is practicable.” The fund currently has €300 million (US$350 million) invested in 150 companies with fossil fuel investments. The legislation, which blocks the fund investing in companies that derive over 20 per cent of their revenue from fossil fuels, has yet to be voted on by the upper house. (Guardian)
French reinsurance company warns on pollution costs of thermal coal: In a paper on the health impacts of air pollution the French reinsurance company SCOR has recommended that the insurance industry acknowledge the environmental risks the use of thermal coal poses and “support endeavours to disengage from these industries on both the asset management and the underwriting sides.” However, SCOR’s own current policy, which was adopted in September 2017, only excludes support for or investments in new greenfield mines, new “standalone” lignite plants and mines and companies that derive less than 30 per cent of their revenue from thermal coal or power. (SCOR, Unfriend Coal)
Japanese insurance giant backs away from coal: Nippon Life Insurance, Japan’s biggest life insurer with $667 billion in assets, has announced it will not invest in or provide loans for new coal plants at home or abroad due to environmental concerns. The German NGO Urgewald estimates Nippon Life has $1.3 billion invested in bonds and shares of coal plant companies while 350.org estimates Nippon Life provided $82 million in loans for domestic coal plant builders between 2011 and 2016. In May Dai-Ichi Life Insurance announced it would not invest in new coal plants overseas. Subsequently, Sumitomo Mitsui Trust Bank signalled it plans to restrict financing for new coal plants at home and abroad. (Asahi Shimbun, Reuters, 350.org)
Eskom reveals US$1.4 billion in dubious transactions: In its annual financial report for the year to the end of March 2018 South Africa’s debt-laden utility Eskom has revealed 19.6 billion rand (US$1.45 billion) of irregular expenditure which was mostly attributable to breaches in procurement regulations. Eskom also revealed a US$171 million loss, in large part due to the increase in the financing costs and depreciation of plants such the Medupi and Kusile plants. Both are proposed to have a capacity of 4800 MW, though Eskom’s financial woes have prompted calls to suspend construction of the remaining proposed units. Eskom is considering potentially large staff cuts and the sale of non-core assets while the government is considering an increased role for private companies in energy generation. (Reuters, Fin24, Business Day)
Chinese coal company defaults on US$10 billion debt: Wintime Energy, a coal company operating in China’s largest coal producing province of Shanxi, has defaulted on a US$10.8 billion debt, the largest loan default in China in 2018. The company’s debt quadrupled over the last five years after the central government encouraged the growth of bond financing as an alternative to loans from state-owned banks. Despite the default, the company has informed the Shanghai Stock Exchange it has reached an agreement with five banks including China Development Bank and China CITIC Bank to restructure its loans. How the banks respond to Wintime’s default is seen as an indicator of how committed China’s regulators are to cleaning up the country’s bad debt crisis. (Bloomberg)
Investors in General Electric rebel over Kenyan investment plan: Fifty six institutional and individual shareholders in General Electric (GE) have called on the company to drop its plan to buy a 20 per cent stake in the proposed 1050 MW Lamu plant in Kenya. GE’s proposed stake is estimated to be worth about US$496 million. The plant, which is proposed to be located near Old Lamu Town World Heritage site, has generated local and international opposition. Kenya’s High Court has also been petitioned to block GE from participating in the project. (Voice of America, The Star, Standard)
As Spanish coal plant shut-downs continue, EU warned over transition funds: High global thermal coal and EU carbon prices and the looming costs of meeting new pollution standards are increasing financial pressure on coal plants in Spain. The new minority Spanish government has stated it — unlike the previous government — has no objection to the closure of coal plants. Endesa has requested permission to close two 1000 MW plants while Iberdrola wants to shut two smaller plants with a combined capacity of 870 MW. The grid regulator has already approved the closure of the 365 MW Anllares plant owned by Naturgy. Spanish environmental groups are also pressing the European Commission to ensure that the domestic mines granted €2.1 billion (US$2.5 billion) to close by the end of 2018 do in fact shut down or are forced to repay the funds. (Montel, Politico, ClientEarth)
The coal power financing problem at HSBC and Standard Chartered, Global Witness, July 2018. (Pdf)
This 10-page briefing paper details the potential role of HSBC and Standard Chartered in financing or supporting up to six coal plants in Vietnam and Indonesia unless they tighten their polices to be in line with other financial institutions that exclude support for new plants.
Galilee Basin Employment Development Impacts, Australia Institute, July 2018. (Pdf)
This 23-page report argues that development of new thermal coal mines in the Galilee Basin would result in the reduction of several thousand jobs in other Australian mines.
Water Impacts and Externalities of Coal Power, Center for Environmental Rights, July 2018. (Pdf)
This 43-page report argues that the costs of water used for coal mining and coal power need to be accounted for in the development of in South Africa’s Integrated Resource Plan for the electricity sector.