Twitter

Coal

How Kentucky’s struggling miners view the country’s most expensive Senate race – by Luke Mullins (Yahoo News – October 2, 2014)

http://news.yahoo.com/

Mitch McConnell and Alison Lundergan Grimes are vying to be coal’s true champion. But are they merely perpetuating an industry’s mythology?

These days, Bobby Spare feels like the last man standing.

The 59-year-old engineer began working in eastern Kentucky’s coal fields 38 years ago, like his father and grandfather before him. With nothing more than a high school diploma, Spare landed a job with a local mining company and soon earned his engineer’s license. It was a fickle industry; bonuses one year, pink slips the next. But for nearly four decades, it provided a stable, middle-class living for Spare and his six children. Even during the tough years, Spare never lost faith that coal would keep the region’s economy afloat. Today, however, he isn’t so sure.

The headquarters of B&W Resources, the mining company Spare works for, is a one-story building in Clay County, a verdant slice of Kentucky carved out of the Appalachian foothills. Trucks carrying up to 42 tons of coal rumble past the office and dump their cargo into 100-foot-high piles. Inside the building, Spare fixes himself a cup of coffee and explains that he’s never seen the industry so defeated. Coal production in eastern Kentucky has plummeted to its lowest levels in a half-century, and nearly half of the region’s mining jobs have vanished since midyear 2011.

The collapse has been particularly painful here in Clay County, which, according to the New York Times, “just might be the hardest place to live in the United States,” on account of its high unemployment, meager household incomes, and short life expectancies. It’s one of the poorest counties in the nation.

Read more

COLUMN-Coal industry still in denial over prices, regulation – by Clyde Russell (Reuters U.S. – October 15, 2014)

http://www.reuters.com/

Oct 15 (Reuters) – These days you would expect a gathering of coal industry executives to be a fairly gloomy affair, given the drop in prices to near seven-year lows, the increasing threat of regulation to control pollution and the general image of the fuel as the main climate change culprit.

You might hope for a sense of realism and practical moves to address the issues, but instead the World Coal Conference in Copenhagen this week was characterised by what seemed like a state of denial.

The first instance of denial is over the causes of the dramatic slump in prices, with European API2 futures falling this week to the lowest since 2007, and nearly half of what they fetched in 2011.

Spot thermal coal at Australia’s Newcastle port fell to $64.92 a tonne in the week ended Oct. 10, 1 cent higher than the previous week, which was the lowest since mid-2009.

A common question among the hundreds of delegates at the conference in the Danish capital was what was the outlook for demand in China and India, the world’s two biggest coal importers.

Read more

Losing the War on Coal: One Virginia town’s painful decline – by Johnny Giles (Fox News – October 15, 2014)

http://www.foxnews.com/?intcmp=logo

APPALACHIA, Va. – Roger Whited doesn’t have to think back too far to remember when Main Street was alive with bustling shops and offices, teeming sidewalks and even traffic jams, all thanks to the industry that was the lifeblood of this tiny mountain town and countless others like it.

But six years into what many term the Obama administration’s “War on Coal,” Appalachia’s main thoroughfare is a tableau of boarded-up buildings, empty storefronts and dilapidated homes. Those who still mill about on streetcorners are looking for jobs, not places to spend their paychecks.

“I remember when the downtown area was more vibrant — streets were packed and businesses were open,” said Whited, who teaches high school social studies in Wise County. “There was the hotel and Bessie’s Diner, which was a popular place to get a meal. There were several other restaurants, but now the only place that serves food is a gas station.”

For generations, coal powered not only Appalachia’s homes and the lights on Main Street, but also the local economy. The salaries paid by companies like Cumberland River Coal Co. were enough to afford the trappings of a middle class, if hard-won, lifestyle. Men and women who toiled in the mines spent their money downtown and sent their kids to the local schools.

Read more

RPT-Australia’s coal sector defies all comers to keep on mining – by James Regan (Reuters India – October 14, 2014)

http://in.reuters.com/

SYDNEY, Oct 10 (Reuters) – Australian coal output is hitting record highs and producers are pressing on with plans to open new mines, defying prices at five-year lows, environmental opposition and trade restrictions imposed by some of the country’s most important foreign buyers.

China, the world’s top coal importer, on Thursday announced it would impose import tariffs to help ailing domestic miners who have been hit by rising costs and plunging prices.

Glencore Plc, one of Australia’s biggest miners, estimates up to a third of Australia’s coal sector is running at a loss, yet collieries are flooding countries such as China and Japan with million of tonnes of coking coal used to make steel and thermal coal to generate power.

In many cases miners are finding it cheaper to run in the red than shut owing to so-called “take or pay” contracts that require payment of haulage fees whether or not any coal is shipped.

The fees were last set in 2009, when coal prices were much higher and still providing healthy profit margins. “Now it simply costs more to mine and ship the coal than we can sell it for,” said an executive at a mid-sized coal company who did not want to be named because of the sensitive nature of his company’s running costs.

Read more

Union Miners Rally At EPA To Protest New Emissions Standards – by Kate Sheppard (Huffington Post – October 7, 2014)

http://www.huffingtonpost.com/politics/

WASHINGTON — The United Mine Workers of America came to Washington on Tuesday with a message for the Obama administration: We will not be forgotten.

The union miners, who came by bus from Pennsylvania, Ohio and West Virginia, held a rally outside the Environmental Protection Agency’s headquarters in protest of new regulations on greenhouse gas emissions from power plants that the agency proposed in June. The rules are part of the Obama administration’s plan to curb the greenhouse gas emissions that are causing the planet to heat up.

Members of the International Brotherhood of Boilermakers and the International Brotherhood of Electrical Workers also attended the rally.

“We are fighting for our livelihood,” James Gibbs, an at-large vice president at UMWA, told the crowd. “We have to let the president know, we need to let both parties know that we will support candidates that support us.”

Organizers said about 700 people made it to Washington for the protest, and another 50 or so were on a bus that arrived late. They carried signs that read “EPA Rules Destroy Good Jobs” and “EPA Rules Put Seniors At Risk,” and some wore shirts that said “Stop The War On Coal.” UMWA leaders expressed frustration that the union had worked on behalf of progressive causes like improved labor laws and fair wages, and had committed money and manpower to elect Obama in 2008. (The group did not endorse either candidate in 2012.)

Read more

Australian National University dumps mining stocks as global ‘divestment campaign’ focused on universities starts to gain traction in Australia – by Babs McHugh (Australian Broadcasting Corporation Rural – October 7, 2014)

http://www.abc.net.au/news/rural/

A global campaign to get funds and investors to sell their shares in fossil fuels appears to be gaining traction in Australia. There have been announcements by religious, educational and super funds on so called ‘divestment’ of these stocks in recent days.

Over the weekend the Anglican Diocese of Perth decided to sell shares and holdings it has in fossil fuel companies. Bishop Tom Wilmott, who is also the chair of the Anglican Eco Commission, says it plans to put funding into renewable energy investments instead.

“I’m not a financial person, I’m not an accountant, I’m a Bishop and it is for the trustees themselves to determine if they will move from fossil fuel exposed industries and shares into renewables.

“But just take for example the return on coal; over the last two years coal has gone from $125 a tonne to $65, and in the international market the smart money is moving into renewables as well.

“Two weeks ago the Rockefeller family announced they were moving out of petroleum into renewables. Now when a big organisation like that moves from fossil fuels to renewables, you can see where the direction is.”

Read more

Indian coal import growth outstrips China – by Neil Hume (Financial Times – October 6, 2014)

http://www.ft.com/intl/commodities-note

Domestic supply growth is weak and unlikely to improve soon

Could India soon overtake China as the world’s biggest consumer of seaborne thermal coal? For many miners and traders, the answer to that question, posed at the Financial Times’ inaugural Commodities Retreat in Singapore last week, is yes.

Coal is India’s most important energy source – supplying more than half of all power stations – and the country, alongside Korea, is emerging as one of the few bright spots in the 1bn tonne a year seaborne thermal coal industry.

In the wake of adverse legal rulings – the Supreme Court recently cancelled more than 200 coal licences held by dozens of private sector groups – miners and traders are tipping strong import growth from India. They say domestic supply growth is weak and unlikely to improve in the foreseeable future because of bureaucratic and infrastructure challenges.

Glencore, the world’s largest producer of high quality thermal coal, told analysts on a recent site visit that it expects Indian annual imports to rise from 150m tonnes, to 180m tonnes in 2015 and 300m tonnes by 2020.

Read more

Canadian coal mine Grande Cache sold for US$2 amid plunging bulk commodities demand – by Peter Koven (National Post – October 2, 2014)

The National Post is Canada’s second largest national paper.

The value destruction in the bulk commodities business has been astounding in the last few years and no one knows it better than Asian commodity traders Marubeni Corp. and Winsway Enterprises Holdings Ltd.

Back in 2011, they teamed up to buy Canadian miner Grande Cache Coal Corp. for $1-billion. Grande Cache was the only pure-play coal producer left in Western Canada, and the buyers saw an opportunity to secure a big source of supply in a mining-friendly country.

It turns out not to have been such a wise decision. Marubeni and Winsway are now planning to sell their Grande Cache stakes to an Asian coal firm called Up Energy. Unfortunately for their shareholders, the proposed sale price is a bit less than they paid: US$1. Each.

In a coal market as bad as this one, US$2 may not be such a bargain given the problems the buyer is inheriting.

“When you buy a coal company today, the cash outflows don’t stop when you close the deal,” said George Dethlefsen, chief executive of Corsa Coal Corp. “Even if the buyer is paying a dollar, they may need a good amount of money in reserve to sustain the company over the next 12 to 24 months.”

Read more

RPT-UPDATE 2-New rules to slash Indonesian coal exports in short term at least – by Wilda Asmarini and Yayat Supriatna (Reuters India – October 1, 2014)

http://in.reuters.com/

JAKARTA, Sept 30 (Reuters) – Indonesia’s coal exports are expected to fall by between 15 and 20 percent in October from September and could decline 5 percent this year as firms scramble to obtain government export permits to comply with new rules due to come into effect on Oct. 1.

The new regulations, intended to stamp out illegal mining and ensure ample coal supplies for domestic power plants, require exporters to get approval from the mining and trade ministries.

But the industry says the rules are poorly timed and could push many firms out of business with coal prices at a five-year low. Unregistered firms will not be allowed to ship coal past the deadline.

Many miners and traders have encountered delays and a backlog of firms have yet to be registered, Pandu Sjahrir, chairman of the commercial committee at the Indonesian Coal Mining Association (ICMA), told Reuters.

“A lot of the backlog happens to be at the coal and minerals directorate level. Everything has to be done manually,” Sjahrir said, adding that firms needed to obtain the signature of each director at the department.

Read more

Glencore, Rio Tinto could save $500m by merging coal operations – by Sarah-Jane Tasker (The Australian – October 1, 2014)

http://www.theaustralian.com.au/business

DIVERSIFIED miners Rio Tinto and Glencore could target $500 million in annual savings if they merge their NSW coal operations, analysts on a site tour of the Swiss giant’s assets have flagged.

Glencore, rumoured to be eyeing acquisitions, highlighted the significant synergy potential with Rio Tinto in the Hunter Valley region given the two miners had many adjacent assets.

“These have not been quantified but could total close to $500m per annum pretax, and relate to overhead reduction, mining efficiencies, logistics and blending,” Credit Suisse analyst Liam Fitzpatrick said. “Despite this, there appears to have been very limited progress between the two companies.”

Recent media reports have suggested Glencore chief Ivan Glasenberg has Rio on his acquisition wish list, but neither company has weighed in on market speculation.

Glencore kicked off a sell-side analysts tour of its Australian ¬assets this week with a visit to its coal operations, and the head of coal assets, Peter Freyberg, told those on the trip the company had a “synergistic and targeted acquisition strategy”.

Read more

BC Cities Demand Review of Thermal Coal Exports – by David P. Ball (The Tyee.ca – September 26, 2014)

http://thetyee.ca/

Confab of municipalities passes resolution in favour of greater oversight.

The province’s 190 local governments and 26 districts are calling for more government oversight over thermal coal exports in British Columbia, which are set to increase after a recent federal decision.

Delegates at the Union of B.C. Municipalities’ annual meeting in Whistler voted in favour of an assessment of the health and environmental risks of coal carried by train from the U.S. through White Rock and Surrey, and by barge to B.C.’s Texada Island — a corridor beyond the scope of Port Metro Vancouver’s own required reviews.

The UBCM resolution states that “there is currently no mechanism that provides oversight or ensures the implementation of mitigation measures to minimize environmental and health impacts of thermal coal transport over coastal waters and by rail.”

It calls for “a comprehensive environmental and health impact assessment for the shipment of thermal coal over coastal waters and by rail,” and that a provincial or federal agency be chosen to monitor it.

Though non-binding on the provincial or federal governments, the vote came five weeks after a federal port authority approved Fraser Surrey Docks’ application to build a transfer facility for four million tonnes of thermal coal a year.

Read more

India’s mass cancellation of mining licenses spurs debate – by Shivom Seth (Mineweb.com – September 29, 2014)

http://www.mineweb.com/

Will a recent government decision erode investor confidence or help reshape an industry with lacklustre performance record?

MUMBAI (MINEWEB) – The mass cancellation of coal licences has sparked off an uproar in India Inc. Many captains of industry have said it could cause serious supply disruptions and exacerbate India’s on-going power crisis. Worse, the economy would have to pay a heavy price for the Supreme Court’s decision to cancel coal blocks and get them auctioned by the government.

“The authority of the government is at stake here. The damage is unlikely to be confined to only coal blocks. Any administrative decision taken in the future in the mining sector would be fraught with uncertainity, and would fail to inspire confidence and carry credibility,” said a senior corporate official.

The Supreme Court, India’s highest court, recently ruled that allocations of 218 coal blocks for mining were all illegal except for four, and cancelled the whole lot. The total investment at stake: $32.55 billion (Rs 2,000 billion). Coal producers could also face penalties of upto $3 billion.

Amar Ambani at broking firm IIFL said the focus would now shift to investor uncertainty about investing in the Indian mining industry. The impact of the verdict would be highest on JSPL and Hindalco in the metals space, he added.

Read more

‘Inconvenient truth’: Australian mining wages too high, says Mitsui – by Amanda Saunders (Sydney Morning Herald – September 26, 2014)

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

Japanese trading giant Mitsui says Australia’s lagging productivity fails to justify its high mining wages, while tipping a modest rebound in heavily depressed iron ore and coal prices by the end of the year.

Mitsui, which has ploughed $14 billion into investments in Australia in the past decade, also forecast the huge iron ore supply glut would likely correct by the end of the decade, possibly as early as 2017.

Mitsui Australia boss Yasushi Takahashi stressed the importance of ­executing deeper cost cuts at Mitsui’s Australian operations, which include iron ore, coal, and liquefied natural gas.

“It’s an inconvenient truth but Australia’s high wages are not supported by an equally high productivity,” Mr Takahashi said. “The biggest subject we are tackling right now with our joint venture partners is to improve productivity to match up with high costs.”

He pointed to prohibitive labour costs at Australia’s coal mines. Labour made up about 25 per cent of on-site coal mine costs in Australia, compared to 10 to 15 per cent in other key mining exporters, like China, the United States, South Africa and Indonesia.

Australia’s average mining wage was $US122,000 ($138,000), more than double that of the US. “That is a good thing we are seeing high wages in the most liveable country in the world,” he said.

Read more

Polish miners call off Russian coal blockade after Warsaw pledges industry support (RT.com – September 25, 2014)

http://rt.com/

Coalminers blocking “cheap” Russian coal at the Poland-Russia border have reportedly reached a deal with the government in Warsaw to consider new coal trade laws that will better protect the country’s coal industry.

Coal deliveries from Russia have now resumed, according to a representative at the railway station in Russia’s Kaliningrad enclave, which borders Poland and the Baltic Sea but not mainland Russia.

“At 6:15am Moscow time, the train departed the Russian station Mamonowo and after sometime crossed the Russian-Polish border,” a representative said, RIA Novosti reported. According to the representative, another train will cross the border at 5pm Thursday local time.

“The decision to finish the protests at Braniewo is because we received a positive message from the prime minister, Eva Kopacz, and cabinet ministers,” ITAR-TASS reported Dominik Kolorz, leader of the Solidarity Union in the Slasko-Dabrowskie region, as saying.

On Wednesday, Polish PM Ewa Kopacz asked parliament to speed up the introduction of new coal trade laws, and announced she was commissioning a report on the country’s coal mining industry, Polish Radio reported. The policy shift came after over 200 Polish miners blocked the delivery of Russian coal at a railway crossing at the Branevo-Mamonowo border post.

Read more

On the Ground in China’s Fight to Quit Coal – by Matt Sheehan (Huffington Post – September 23, 2014)

http://www.huffingtonpost.com/theworldpost/

TONGCHUAN, CHINA — World leaders are gathering Tuesday at the United Nations in New York City, hoping to talk their way out of decades of gridlock on climate change. The high-minded proclamations will make international headlines, but the reality is they matter little compared with what’s happening in places like Tongchuan, a dusty, smog-shrouded city in the beating black heart of Chinese coal country. This is a region where a large chunk of the world’s carbon emissions originate, and this is where government pollution controls and anemic markets for coal may provide the best hope of averting a climate disaster.

Tongchuan has long been emblematic of China’s take-no-prisoners approach to environmental resources, scraping as much coal as possible from the earth and feeding it into local cement factories. But collapsing coal prices, depleted natural resources and government pollution controls are forcing the city to reinvent itself.

After riding a 10-year export and infrastructure binge, China’s coal markets have slumped as the economy attempts to move toward services and domestic consumption. The China National Coal Association estimates that 70% of coal producers are losing money, and early 2014 saw China’s first sustained drop in coal consumption in decades.

Those market forces have been complemented by aggressive anti-pollution measures that followed a series of air quality disasters in recent years. Tongchuan’s home province of Shaanxi has pledged a 13% reduction in coal consumption by 2017, and Greenpeace estimates that if China meets all of its coal targets, the country’s 2020 emissions would drop by an amount equal to the combined 2013 emissions of Australia and Canada.

Read more