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China Cuts Coal Mine Deaths, But Count in Doubt – by Michael Lelyveld (Radio Free Asia – March 16, 2015)

http://www.rfa.org/english/

China has announced continuing progress in reducing coal mine fatalities, although doubts remain about death counts and cover-ups in one of the most dangerous industries in the world.

On March 10, the director of the State Administration of Work Safety (SAWS) told a Beijing press conference that coal mine accidents claimed 931 lives last year, as the death toll dropped below 1,000 for the first time.

“The situation has been greatly improved,” said the SAWS director, Yang Dongliang, according to Agence France-Presse. Speaking on the sidelines of China’s annual legislative sessions, Yang mixed praise for safety advances with a promise that the agency was determined to do more.

The most recent fatality figure represented an 86.7 percent decline from the toll of some 7,000 in 2002, the official Xinhua news agency reported. “The nation is still confronted with grave and complicated challenges in coal mine work safety, as the authorities aim to achieve a zero-death target,” Yang said.

There seems little doubt that China has made major steps forward in lowering the casualty count in an industry that accounts for half the world’s coal output.

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Parliament passes bills to allow mine auctions – by Krishna N. Das and Nigam Prusty (Reuters India – March 20, 2015)

http://in.reuters.com/

NEW DELHI – (Reuters) – Parliament passed two bills on Friday to auction mines that produce minerals such as coal, iron ore and bauxite, in a boost for Prime Minister Narendra Modi’s bid to kickstart an industry that has languished for years.

The Mines and Minerals Development and Regulation, and Coal Mines Special Provisions bills were seen as a test of the government’s ability to secure support from opposition parties in the upper house of parliament where the ruling Bharatiya Janata Party (BJP) lacks a majority.

BJP has an overwhelming hold over the lower chamber, Lok Sabha, due to Modi’s resounding election victory 10 months ago. The bills have to be approved by President Pranab Mukherjee for them to become law – likely to be a formality.

India’s mining sector has been mired in controversy over the illegal allocation of resources, causing a near standstill in granting permits to open new mines, including an iron ore exploration licence for South Korean steel giant POSCO that wants to set up a steel plant in India.

Asia’s third largest economy was once the world’s third-largest exporter of iron ore but now has to import heavily due to court action on illegal mining. The Supreme Court has eased some of the curbs, but state officials have been slow to renew mining licences, fearing charges of corruption.

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Here’s What Coal Mining Is Doing to Communities in the Navajo Nation – by Laura Dattaro (Vice News – March 18, 2015)

 

https://news.vice.com/

For sixty years, the billions of tons of coal found beneath Arizona’s Black Mesa have powered the cities of the Southwest. But getting at all that coal has meant the displacement of more than 12,000 people of the Navajo Nation, one of the largest removals of Native Americans since the 19th century. For those that have remained, the mining process has compromised their health and their environment.

The mesa rises up from the dry Arizona landscape a few miles south of Kayenta Township, where Peabody Energy operates a mine that in 2013 produced nearly eight million tons of coal. The company proposed in May 2012 to expand its excavation, a plan that needs approval from the Interior Department’s Office of Surface Mining, Reclamation, and Enforcement (OSMRE). Locals are concerned because that would add 841 acres of land to the Kayenta Mine complex — which would displace even more Navajo and ensure continued air and water contamination for decades to come.

A VICE News crew traveled to the Black Mesa area to document the effects of coal mining on their health, the environment, and the local economy.

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COLUMN-Commodity price boom over, volume boom gathers pace – by Clyde Russell (Reuters U.S. – March 19, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, March 19 (Reuters) – It’s become conventional wisdom that the commodities boom is over, and while the era of rising prices is gone, figures from the Australian government suggest the surge in volumes is well under way.

Exports of iron ore will jump 22.5 percent between the 2014-15 fiscal year and 2019-20, while liquefied natural gas (LNG) shipments will triple, according to the latest quarterly report from official forecaster, the Department of Industry.

Even the pressured coal sector is expected to post gains, with thermal coal exports climbing 16.6 percent over the period and those of metallurgical grades rising 7.3 percent.

Australia is the world’s top shipper of iron ore and metallurgical coal, number two in thermal coal and soon to take the lead in LNG, once the seven gas projects under construction are completed. But while the report, released on Wednesday, is relatively bullish about the outlook for export volumes, it’s another matter when it comes to prices.

Iron ore will average $60.40 a tonne in 2015, dropping to $56.80 next year before recovering to $64.60 in 2017, the department said. It expects the price recovery to continue to 2020, when it will reach $81.80 a tonne.

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UPDATE 1-Investors fret as India defends reopening coal mine bids – by Krishna N. Das (Reuters India – March 17, 2015)

http://in.reuters.com/

(Reuters) – India’s coal ministry said it will decide this week the fate of nine winning mine bids it is re-examining to rule out any price discrepancies, despite criticism that its move to reopen some of the tenders will hurt business sentiment.

The government, which last month started auctioning off coal mine sites after a court said a previous method of awarding concessions was illegal, is re-examining “outlier” bids for the 33 mines auctioned so far, Coal Secretary Anil Swarup said.

The winning bids for the nine mines were the highest in their individual auctions, but were considered low when compared with the winning bids for other similar blocks.

“We are not even looking at somebody doing wrong,” Swarup told Reuters on Tuesday. “We are looking at whether the price that was quoted is good enough for the government or not, and whether we could get a better price.”

Swarup said if any discrepancy is found, the mines may be re-auctioned, given to states or handed over to government-owned Coal India Ltd. This has left some companies, including Jindal Steel and Power Ltd, uncertain as to the status of what had appeared to be winning bids in the auctions.

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More Coal Cuts Needed as Demand for Steel Slows: Commodities – by Liezel Hill and Tim Loh (Bloomberg News – March 12, 2015)

http://www.bloomberg.com/

(Bloomberg) — In the last year, mining companies eliminated about 15 million tons of production capacity for the coal used to make steel, while outlining plans to double those cuts in the near future. It won’t be near enough.

That’s the determination of Chief Executive Officer Don Lindsay at Teck Resources Ltd., the world’s second-biggest exporter of metallurgical coal. For supply to match flagging demand, the industry must cut a total of as much as 45 million tons, he says, raising the ante as prices sit at a six-year low.

While U.S. and Australian miners are now losing money on as much as 50 million tons of annual capacity, they’re dragging their feet on reductions at high-cost mines. The result: a “miserable” market for at least six months, and perhaps as long as a year, according to Lindsay.

“There’s a lot of production that’s underwater, but it takes a long time for them actually to shut,” Lindsay said in an interview. “They always last longer than you think.”

There are two main types of coal. Lower-quality coal is burned to generate electricity, and coal with fewer impurities is used to make steel. Metallurgical coal makes up about 15 percent of production, and sells for about twice the price of thermal coal.

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Column: India coal output will gain, but not to heroic forecasts – by Clyde Russell (Reuters India – March 9, 2015)

http://in.reuters.com/

NEW DELHI – (Reuters) – It’s easy to dismiss the government’s assertion that the country will be able to more than double coal production in the next five years. But that doesn’t answer the question of how close they will get.

India will produce 1.5 billion tonnes of coal by the end of this decade, Coal Secretary Anil Swarup told the Coaltrans India conference this week in New Delhi.

Swarup, the top coal bureaucrat, presented these numbers in a relaxed and confident manner, a stark contrast to previous government presentations at Coaltrans events, which have generally been cautious and fraught with defensive justifications of past disappointments.

He still has the problem that nobody believes that state-controlled behemoth Coal India (COAL.NS) will be able to double its output to 1 billion tonnes per annum within five years.

There is perhaps some more confidence that private miners will be able to ramp up their production to 500 million tonnes, but that comes with the caveat that the laborious process for mining approvals is streamlined.

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Polish Coal Miners Ride Solidarity Legacy to Oblivion – by Ladka Mortkowitz and BauerovaMarek Strzelecki (Bloomberg News – March 6, 2015)

http://www.bloomberg.com/

(Bloomberg) — For decades, Polish coal miners have enjoyed benefits that are the envy of their working class countrymen: An annual bonus of two months’ pay regardless of performance, company-sponsored holidays, retirement before 50, and no weekend shifts. Today, that legacy of the communist era threatens the mostly state-owned mining sector and is digging a hole in the national budget.

To understand why reform remains elusive, take a drive through Upper Silesia, the coal-rich region in southern Poland that’s home to two dozen mines. The snowy countryside, drained of color in the feeble winter light, is framed by smoking chimney stacks and elevator towers that haul coal up from the pits.

Even as European coal prices have fallen by half in recent years and producers have struggled, powerful unions have foiled government attempts to close failing operations, cut jobs, and restore the sector to profitability. In January, the Economy Ministry cautioned that without significant restructuring Kompania Weglowa SA — the European Union’s largest coal producer — risked bankruptcy.

With their historical ties to Lech Walesa’s Solidarity, Poland’s roughly 100,000 miners are clinging to their jobs. Their unions’ links to the 1980’s movement mean they can easily forge alliances across the political spectrum — and threaten any reform-minded government with widespread strikes.

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Thirty-three miners dead after pit blast in east Ukraine – by Maria Tsvetkova (Reuters U.S.A.- March 4, 2015)

http://www.reuters.com/

DONETSK, Ukraine – (Reuters) – Thirty-three miners were confirmed dead late on Wednesday after a coal mine blast in the rebel-held city of Donetsk near the battle front in eastern Ukraine, indicating no one trapped in the rubble survived.

Mine officials said the explosion was most likely caused by gas and not fighting in the war between Moscow-backed rebels and Ukraine government forces. Nevertheless, Kiev suggested the war had made the disaster worse, accusing the separatists of holding up a rescue effort by restricting access.

Outside the gates of the Zasyadko mine, about 30 relatives clamored for information about any survivors. Sergei Baldayev, a miner injured in the blast, mingled with the crowd, his face covered in scratches and one arm hanging motionless by his side, the result of a broken collarbone.

The sister of one miner who was in the pit at the time of the explosion, Alexei Novoselsky, stood in tears. “Tell me, are there survivors? Why are you concealing the truth?” she asked as a rescue worker tried to calm her. The Donetsk regional administration said 16 injured people were in hospital.

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Australian coal industry takes another step closer to the abyss – by Peter Ker (Sydney Morning Herald – February 27, 2015)

http://www.smh.com.au/

The downturn in the Australian coal industry has deepened, with three major mining companies warning on Friday that more jobs will be cut, mines will close and assets will be written down to a shadow of their former value.

Rio Tinto, Glencore and Brazilian miner Vale have all reiterated their pessimistic view of the coal sector’s future, revealing major changes to their local operations.

Glencore has made the most aggressive move, announcing that it will cut its Australian coal output by 15 million tonnes in 2015, or more than 20 per cent when compared to 2014 volumes.

In a move that is likely to put more than 100 jobs on the line, Glencore said the cuts would “more closely align” its coal output with customer demand, and some expansion projects would be slowed. “We will defer some projects and ensure that inventory management and blending are optimised,” the miner said in a statement.

The move comes less than a year after Glencore tried to merge its Australian coal division with Rio Tinto’s, underlining the predicament the Australian coal sector finds its self in.

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COLUMN – India coal output closer to ending years of disappointment – by Clyde Russell (Reuters India – February 18, 2015)

http://in.reuters.com/

LAUNCESTON, Australia – One of the most common assumptions among coal watchers is that India’s rising demand will translate into increasing imports, thus providing one of the few bright spots for a beleaguered industry.

While there is little doubt about the bullish demand outlook for India, the belief that imports will have to rise is predicated on the view that domestic coal output will continue to disappoint.

If history is a guide, then this is a safe bet, with state-controlled behemoth Coal India (COAL.NS) consistently failing to meet output targets and battling to supply enough fuel for the South Asian nation’s electricity generators.

India’s coal imports have steadily risen and gained 19 percent last year to 210.6 million tonnes, making the country the world’s second-biggest importer after China and ahead of Japan. But it may pay to heed a warning that accompanies financial products that past performance isn’t necessarily a guide to future outcomes.

There are signs that India is taking the right steps to boost its domestic coal industry, and while these won’t necessarily bear immediate fruit, it’s always worth watching the trend.

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Ottawa’s lump of coal: Search for buyer of Ridley terminal drags on – by Brent Jang (Globe and Mail – February 16, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — In late 2012, Ottawa placed a prized coal export terminal up for sale in anticipation of fetching a huge sum for the federal asset in northwestern British Columbia.

While coal prices had softened from record highs in 2011, Ridley Terminals Inc.’s business prospects looked solid, with forecasts for years of rising supplies transported by train from coal producers in northeastern B.C.

But what seemed like a jewel of a Crown corporation valued at more than $1-billion by industry experts 26 months ago looks more like a lump of coal today.

Ridley is struggling through an industry slump that has seen coal prices collapse, hurt by slower-than-expected demand in Asia and a global supply glut. The terminal is expected to suffer a hefty drop in shipments from the West Coast this year.

Ottawa, through Canada Development Investment Corp., is still looking for a buyer. The federal government’s quest to sell comes as coal prices languish at multiyear lows while northeastern B.C. producers have halted production.

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A Silver Lining Coated in Coal Dust in Eastern Ukraine – by Andrew E. Kramerjan (New York Times – January 31, 2015)

http://www.nytimes.com/

SNIZHNE, Ukraine — Outside Vladimir Moroz’s snug little brick home, winter and hardship grip war-stricken eastern Ukraine. Money is scarce, the store shelves are bare and an icy wind whips over the snowy steppe.

Inside, a retired miner smiles broadly. He peels off his gloves and flexes his cold-stiffened hands over a stove and his prized, glowing, once-illicit source of warmth: backyard coal dug from dangerous, unregulated mines.

In a region plagued by upheaval and misfortune, coal miners who take pride in their grit and self-reliance have found at least one silver lining in changes sweeping over their land. The rebel government has decided to allow private mining, a long-stigmatized, legally proscribed but nevertheless widespread practice in Ukraine’s east.

“I have my own potatoes, my own carrots, my own cabbage and my own mine,” Mr. Moroz said, referring to the dank pit under a shed out back. “This is how we live.”

Deep in the backcountry of Donbass, as the rebellious region of eastern Ukraine is known, rich seams of coal undulate just under the hills. In places, kicking back the topsoil with a boot reveals glistening layers of coal, as mysterious and alluring to these miners as onyx.

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Anglo American set to sell Australian coal mines to boost returns – by Arash Massoudi, James Wilson and Neil Hume (Financial Times – January 22, 2015)

 http://www.ft.com/intl/companies/mining

Anglo American is eyeing the sale of a cluster of coal assets in eastern Australia as the miner struggles to boost shareholder returns during a slump in commodities prices, people familiar with the matter said on Thursday.

The UK-listed miner, one of the world’s largest coal producers, is preparing to sell five mines in Queensland and New South Wales as part of a $3bn-$4bn asset disposal programme ordered by Mark Cutifani, chief executive.

Large mining companies including Vale and BHP Billiton are looking to dispose of or spin off non-core assets as they battle falling commodity prices and declining share prices. They are also under pressure to boost returns to investors. For Anglo American, a sale of assets would help strengthen its balance sheet.

Mines including Dawson and Foxleigh would be primed for a possible sale, the people close to the situation said. One of these people added that Bank of America Merrill Lynch was working with Anglo.

The miner said in December that it was selling the Callide mine as well as Dartbrook. Anglo and Bank of America declined to comment. The mines earmarked for potential sale produce coal used for steel making or power generation.

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Coal’s King Canute moment – by Cole Latimer (Australian Mining – January 22, 2015)

http://www.miningaustralia.com.au/home

As the coal price continues to falter and major pro­ducers are hit drastic action is being taken to reverse the tide.

The commodity has faced a massive decline. It has fallen in price by more than a third in a year from December 2013 to December 2014, as Chinese demand waned and a projects came online, flooding the market and causing excessive supply problems.

The Bureau of Resources and Energy Economics (BREE) said Australia exported 181 million tonnes of metallurgical coal in 2013-14, with this expected to increase to 185 million tonnes in 2014-15, while thermal coal exports are tipped to top 196 million tonnes in 2014-15.

Queensland alone managed to export 216 million tonnes of both thermal and coking coal for 2014, setting new export records.

Making matters worse for miners in Australia is the supply coming online from other competitors such as Indonesia, Colombia and South Africa, further flooding the market, while Russia has plans to quadruple its coal output levels by 2030.

At the same time, rising natural gas production in the United States means thermal coal will be diverted from domestic American markets where it is used as an energy source, to export destinations – particularly Asia.

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