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COLUMN – A few rays of sunshine break through coal’s storm clouds – by Clyde Russell (Reuters India – January 19, 2015)

http://in.reuters.com/

LAUNCESTON, Australia – The new year has started positively for Asian coal, with prices rallying from a 5-1/2 year low, Chinese imports jumping to the highest in 11 months and renewed merger and acquisition interest.

While these are undoubtedly welcome developments for a sector that has witnessed four years of falling prices, there are still serious questions as to whether these swallows really do indicate a summer of good fortune ahead.

The spot price of thermal coal at Australia’s Newcastle port, an Asian benchmark, rose to $62.91 a tonne in the week ended Jan. 16, up 3 percent from $61.04 the prior week, which was the lowest since April 2009.

The obvious caveat here is that prices are still some way below the breakeven point for many miners in top exporters Australia and Indonesia, and it will take weeks of sustained gains to bring the sector as a whole back into the black.

Chinese imports were 27.22 million tonnes in December, the highest since January last year, again a positive sign but not enough to mask that imports for 2014 as a whole were down 10.9 percent to 291 million tonnes, the first annual drop in a decade.

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Nordea to blacklist coal-mining companies – by Madison Marriage (Financial Times – January 18, 2015)

http://www.ft.com/home/us

Nordea Asset Management plans to blacklist up to 40 coal-mining companies from its investment universe. It joins a growing list of large investors that have decided to cut their exposure to fossil-fuel assets.

Nordea, the largest Nordic fund manager, with $228bn of assets, is in the process of identifying companies for exclusion that have a “large and sustained exposure to thermal coal mining”, according to Sasja Beslik, head of corporate governance at the group.

“[Thermal coal mining] is the most environmentally compromising fossil-fuel resource,” he said.
The asset manager’s exclusion list, which will be finalised by the end of March, is likely to affect a small proportion (€100m) of Nordea’s total assets.

The move is another setback for the coal-mining industry. A number of big institutions have opted to reduce their exposure to fossil-fuel companies in the past 12 months for ethical and financial reasons.

KLP, Norway’s largest pension fund, decided in November to blacklist companies that derive more than 50 per cent of their revenues from coal-based activities.

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History buffs dig into mining – by Ralph Nardone (Times Leader – January 17, 2015)

http://www.timesleader.com/ [Wilkes-Barre, Pennsylvania]

Knox Mine program kicks off week devoted to industry

SCRANTON — A tribute to the victims of the Knox Mine Disaster near Pittston kicked off the 16th annual Mining History Week on Saturday at the Anthracite Heritage Museum. Events sponsored by local colleges and historical groups will take place this week in Wilkes-Barre, Scranton, Pittston, Port Griffith and Ashley.

The Knox disaster happened on Jan. 22, 1959, when the Susquehanna River broke through the roof of the River Slope Mine, allowing 10 million gallons of water and ice to rush into the mine. According to Explorepahistory.com, 74 miners were trapped by the rushing waters. Only 62 of them would escape, the bodies of the other 12 were never recovered.

On Saturday, experts on the disaster and folks who were there gathered to discuss its historical significance, to honor those who died and to pay tribute to the professional journalists who documented what happened.

“They were true educators,” said Kings’ College Professor Robert Wolensky, who has authored books on the disaster. “We know what happened that day thanks to their work.”

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Proposed Murray River mine to rely primarily on foreign workers – by Wendy Stueck (Globe and Mail – January 9, 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 — If the proposed Murray River coal project goes ahead, more than half of its employees would be temporary foreign workers in 2018 – potentially the first year of operation – and it would take nearly a decade for all the hourly jobs at the project to be filled by Canadians.

HD Mining has previously discussed its plan to shift from a work force that is mostly foreign to one that is mostly domestic, saying in 2013 the mine would have a “full Canadian work force” after 10 years of production.

But documents recently filed as part of an environmental-assessment process provide more detail about that transition, and an updated estimate of the cost to build the mine of $554.9-million, compared with a previous estimate of $300-million.

According to an executive summary, the number of temporary foreign workers at the project, for which preparatory work began in 2014, would peak in 2018 at 494 – 382 hourly and 112 management employees – out of a total of 764, or nearly 65 per cent. By 2027, plans call for zero hourly foreign workers and 20 managers out of a total of 764. Those levels are projected to stay the same for the rest of the mine’s life.

The environmental assessment is taking place nearly two years after HD Mining sent more than a dozen Chinese miners home in January, 2013, over uncertainty related to a high-profile court battle.

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Coal India Workers Strike to Fight Modi’s Privatization Plans – by Rajesh Kumar Singh and Abhishek Shanker (Bloomberg News – January 6, 2015)

 http://www.bloomberg.com/

A strike by coal miners in India has shut down some mines and disrupted supply at others as unions vowed the biggest walkout in decades to halt plans by Prime Minister Narendra Modi to privatize the industry.

“The strike is on,” said R. Mohan Das, a personnel director at state-run Coal India Ltd. (COAL), the world’s biggest miner of the fuel. It’s too early to assess supply losses, he said, adding that all workers have walked out at some mines, while others are partially closed.

Unions called a five-day strike starting today after rejecting an offer to meet management this morning. Hundreds of union members protested outside Coal India’s Kolkata office denouncing the privatization plans.

“If this strike intensifies there will be a severe coal shortage,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. “With many power utilities being hand to mouth as far as coal supplies are concerned, the problem may be severe.”

Of the 100 power plants that run on local coal, 42 had supplies for less than seven days as of Jan. 1, according to the power ministry’s Central Electricity Authority. Twenty of these plants had less than four days of stock.

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NEWS RELEASE: Cliffs Natural Resources Inc. Concludes the Sale of Logan County Coal and Provides Update on Bloom Lake

CLEVELAND, Jan. 2, 2015 /PRNewswire/ — Cliffs Natural Resources Inc. (NYSE: CLF) is pleased to announce that it has completed the sale of its Logan County Coal assets in West Virginia to Coronado Coal II LLC, an affiliate of Coronado Coal LLC, for $174 million in cash and the assumption of certain liabilities. The expected tax benefit associated with the transaction will be between 20% to 25% of the previously disclosed pre-tax loss of approximately $400 million, which represents an additional benefit of $80 million to $100 million in future cash tax savings. Cliffs will record the results of this sale in its fourth quarter earnings.

Separately, Cliffs confirms that active production at Bloom Lake has completely ceased and the exit from Eastern Canada continued to be executed on schedule as previously announced. The mine has transitioned to care and maintenance status and, consequently, at this time only a small number of employees involved in such activities are still in the payroll. The last shipment of iron ore out of the Port of Sept-Iles will be completed in early January 2015.

Lourenco Goncalves , Cliffs’ Chairman, President and Chief Executive Officer said, “The execution of the strategic initiatives outlined during our Q3 Conference Call in October 2014 continued to progress as planned during the last two months. The sale of Logan County Coal, which included a meaningful tax benefit to the Company, clearly demonstrates our ability to execute complex transactions despite an adverse M&A environment for commodity related transactions. Additionally, as we approach the final steps of our exit from Eastern Canada, we have brought to an end the flawed expansion that has cost Cliffs and its shareholders billions of dollars.”

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Turning point for coal? Japanese trading firms snap up coal assets – by Yuka Obayashi and Sonali Paul (Reuters India – December 22, 2014)

http://in.reuters.com/

TOKYO/MELBOURNE, Dec 22 (Reuters) – Only a few months ago, a potential buyer said Japanese trading house Marubeni Corp was prepared to sell a costly stake in a Canadian coal mine for as little as $1.

But a flurry of acquisitions of high-quality coal assets by Japanese firms in recent weeks signals that some trading houses at least are betting a depressed coal market where prices have halved in three years may be bottoming out.

This vote of confidence comes amid signs that coal demand in Japan and emerging markets such as India is holding up well despite weaker demand in markets such as China, where coal imports in the first 11 months fell nearly a tenth.

Japan is the world’s second-biggest coal importer behind China, importing almost 200 million tonnes a year.

Recent acquisitions include the first coal investment by Mitsui & Co in 10 years. It is purchasing a stake in a Mozambique mine operated by Brazil’s Vale, in which the trading firm has an indirect stake.

“The biggest reason for participating in the Moatize project is to retain excellent quality metallurgical coal that is scarce globally,” Tetsuya Fukuda, general manager of Mitsui’s coal division, said. “With the resource supercycle, we had been not able to buy any assets.”

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‘No hope for Harlan’: Deep in coal country, pondering future without it – by Allen G. Breed (The Associated Press – December 20, 2014)

http://www.middletownpress.com/

HARLAN, Ky. – The rest of the house is just waking as Scottie Sizemore plops down in a rocking chair on his front porch with a cup of coffee. The sun has yet to crest the ridge above, where mist clings like clouds that couldn’t quite make it over.

Sizemore is the fourth generation of his family to mine coal in Harlan County. He knows he’ll probably be the last.

For over a century, life in Central Appalachia has been largely defined by the ups and downs of the coal industry. Through all the bust years, there was always the promise of another boom. Until now.

There is a growing sense in these mountains that this downturn is different, deeper. That for a variety of reasons — economic, environmental, political — coal mining will not rebound this time.

State and federal initiatives are exploring everything from ecotourism and small farmer loans to regional tax incentives for job creators. Some here pray for a regulatory climate change that would breathe new life into the region’s mines. For Sizemore and his wife, Madonna, the answer is simple, if painful. They’re leaving.

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Modi Getting His Thatcher Moment Confronting Coal Unions – by Rajesh Kumar Singh and Debjit Chakraborty (Bloomberg News – December 17, 2014)

http://www.bloomberg.com/

Is India’s Prime Minister Narendra Modi reading up on Margaret Thatcher?

The late former prime minister of the U.K. had one of her defining and controversial confrontations in a protracted fight with striking coal miners in the 1980s. Different time, another country, but Modi has angry unions threatening to stop work at the world’s biggest coal miner, Coal India Ltd. (COAL)

Coal-fired power plants generate 60 percent of India’s electricity, except for when shortages lead to repeated blackouts. Outages shaved $68 billion or almost 4 percent off annual gross domestic product in the year ended March 2013, says the Federation of Indian Chambers of Commerce and Industry.

Last week, Modi made a move toward ending shortages, winning partial passage of a bill that will allow him to end a 40-year government coal monopoly. The plan is to bring in more efficient private companies. The coal unions say that will mean job losses, and that they will fight the legislation.

“Let them open up the sector, there will be strikes all across and large-scale violence,” S.Q. Zama, secretary general at the Indian National Mineworkers Federation, a unit of the opposition’s Congress party-backed Indian National Trade Union Congress, said in a Dec. 5 interview.

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Why B.C. desperately wants to fill your stocking with coal – by Jason Kirby (MACLEAN’S Magazine – December 15, 2014)

http://www.macleans.ca/

Coal, a major B.C. export, suffers from a global glut and falling prices. Sound familiar?

Hey kids, wouldn’t you really rather get a lump of coal this Christmas? That’s the message from the B.C. government, which sent out this rather odd email to reporters late Friday (excerpt)…

Stuff your stockings with B.C. coal

VICTORIA – No matter whether you light the menorah, trim the tree or setup the Festivus Pole, your holiday activities likely have a connection to a lump of coal mined right here in British Columbia.

From the planes, trains and automobiles that are used to transport holiday gifts, to the stores where those gifts are sold – they all require steel. That steel is made using metallurgical coal.

Planning to drive to the mall over the holidays? There are approximately three million cars in B.C. and it takes roughly 630 kilograms of metallurgical coal to produce a single vehicle.

Nothing says Canadian winter like lacing up the ice skates for a game of hockey. The steel blades that make breakaway goals possible start out as metallurgical coal.

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Oil, coal and iron ore at financial crisis levels – by Henning Gloystein (Reuters India – December 15, 2014)

http://in.reuters.com/

SINGAPORE – (Reuters) – Tumbling oil, coal and iron ore prices are now all at levels last seen during or before the financial crisis of 2008/2009, signalling not only the impact of a glut of supplies but deeper weakness in parts of the global economy, analysts say.

The raw materials are among the most sensitive to economic health, with oil and coal the world’s two most important energy sources and iron ore used to make steel.

Brent crude prices have almost halved since June to slightly above $60 a barrel, a level last seen in early 2009 during the financial crisis. In the coal market, the benchmark European futures contracts has dropped below $70 a tonne to levels comparable before the boom and bust of 2007-2009.

Iron ore prices have halved to under $69 a tonne as demand growth in the biggest market, China, wanes. Analysts initially pointed to rising oil and mining output, as well as energy efficiency and alternative sources such as renewables, as the main factors behind the drops.

But with no end to the price slide, it became apparent that a significant cooling of emerging economies as well as ongoing slack in developed markets such as Europe and Japan was also at play, especially after oil producer club OPEC said it would not cut output in support of prices.

“Softer global demand, coupled with unprecedented growth in supply are weighing on global oil indices, with prices falling to levels not seen since the Global Financial Crisis,” National Australia Bank said in a note on Monday.

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Red States, Blue Sates, Dissed States – by Neal Asbury (Money News.com – December 11, 2014)

http://www.moneynews.com/

At the 2004 Democratic National Convention, then-Illinois State Sen. Barack Obama famously started his road to the presidency with the speech that included the line: “There are no red states or blue states, just the United States.”

If only that were true. Instead, we have a president who not only shows preference to blue states, but also punishes red states and, most damaging, dismisses many other states. Democrats have followed him in lock step, especially when it comes to energy-producing states.

Democrats have totally retreated from supporting energy-producing states, as evidenced by their decision to throw Sen. Mary Landrieu, D-La., under the bus by not giving her the votes she wanted to approve the Keystone XL pipeline. She lost the election, and Democrats have essentially lost all their clout in the South.

If you come from a state that produces coal, you are persona non grata in the Obama White House. Coal-producing states like Pennsylvania, West Virginia and Kentucky might as well be located on Mars when it comes to attention from Obama.

But these states and others are paying attention to the snub. Once Democratic strongholds in coal-heavy districts in West Virginia, Kentucky and Illinois are steadily turning their backs on Democrats, and these dissed states, once blue states, are turning to Republicans who support coal. The reason is obvious.

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COLUMN-Big miners’ coal M&A activity points to price bottoming out – by Clyde Russell (Reuters U.S. – December 11, 2014)

http://www.reuters.com/

LAUNCESTON, Australia, Dec 11 (Reuters) – If you were looking for a sign that coal prices have finally bottomed out, then the ramping up of merger and acquisition activity is often a good indicator.

Just as major mining companies tend to buy assets at inflated prices at the zenith of the market, they tend to sell them at discounts at the nadir.

In the past few days, a flurry of announcements have hit the headlines, including Anglo American’s proposed sale of coal assets in Australia and South Africa, and Peabody Energy and Glencore agreeing to form a joint venture at neighbouring mines in Australia’s Hunter Valley basin.

The M&A activity hasn’t been limited to Australia and South Africa, with Brazil’s Vale selling a stake in its Mozambique mine to Japan’s Mitsui, and Consol Energy saying it plans to pursue an initial public offering of some of its U.S. thermal and coking coal assets.

Companies tend to use obfuscatory language in the announcements of these deals, often resorting to terms such as “unlocking shareholder value” or “maximising synergies,” but behind the spin is often the simple message that the assets are loss-making and the pain on the bottom line has become too much to bear, or if they are profitable, they aren’t providing enough of a return on capital.

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Coal Provocateur Sees Profits in Coal’s Long, Slow Death – by Tim Loh (Bloomberg News – December 11, 2014)

http://www.businessweek.com/

Robert Murray is pumped — as though coal-fired steam might be coursing through his veins. Striding purposefully, he ascends a lectern in a conference room at Pittsburgh’s Wyndham Grand Downtown hotel toting a cardboard box with hundreds of copies of his keynote speech to give out later lest anyone miss a word.

It turns out to be a corporate version of a hellfire-and-damnation sermon for the 250 U.S. coal executives assembled at the Platts Coal Marketing Days conference. Satan and his minions aren’t in the room but Murray knows their names.

“Environmental alarmists” and “liberal elitists,” he says, his voice rising as he whips off his glasses. And worse than them all, “the insane, regal administration of King Obama” and Obama’s Environmental Protection Agency.

Murray, 74, pauses for effect and then lowers his voice. “We have the absolute destruction of the United States coal industry. It isn’t coming back. It’s permanent. Virtually all of it is permanent. And if you think it’s coming back, you don’t understand the business. Or you’re smoking dope.”

This is vintage Murray, America’s pro-coal provocateur-in-chief, a coal miner’s son and a former miner himself, a man whose anti-regulation record is so unwavering that he once dismissed acid rain as a hoax, never mind climate change.

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Report Outlines Ways to Protect Appalachian Communities from Mountaintop-Removal Coal Mining – by Mary Anne Hitt (Huffington Post – December 8, 2014)

http://www.huffingtonpost.com/green/

Mary Anne Hitt is the Director, Sierra Club’s Beyond Coal Campaign.

If you think mountaintop removal coal mining’s days are over, you’re wrong. In 2013, Virginia issued nine new surface mining permits and two acreage expansions, West Virginia issued 25 new permits, and Kentucky issued 30 new permits which will destroy mountains and threaten nearby communities.

An excellent new report out from the Alliance for Appalachia evaluates the Obama Administration’s track record on mountaintop removal, and it does not give the Administration high marks for its efforts to date. The report finds that federal agencies have not followed through with initiatives intended to address mountaintop removal, and it outlines specific next steps the Obama Administration can take to tackle the worst harms to the region’s land, water, and communities.

From the report: “In June, 2009, the Obama administration created a Memorandum of Understanding (MOU) among federal agencies responsible for protecting Appalachian communities from the extreme damage of mountaintop removal coal mining. Though grassroots groups realized this MOU would not fully end the practice of mountaintop removal, nor ensure a just and sustainable economy in our region, citizen groups saw this MOU as a small, though significant, step in the Obama Administration taking much needed federal‐level action to address the intersecting health, environmental, political and economic challenges our region continues to face.”

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