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Ex-Xstrata CEO’s X2 Said to Be in Talks With Rio on Coal – by Javier Blas and Firat Kayakiran (Bloomberg News – June 29, 2015)

http://www.bloomberg.com/

X2 Resources, the private-equity firm founded by former Xstrata Chief Executive Officer Mick Davis, is in talks to buy Rio Tinto Group’s controlling stake in three Australian coal mines, according to two people familiar with the matter.

The negotiations are at an early stage and any deal, which may fetch $2 billion to $4 billion, could take two months to finalize, said one of the people, who asked not to be identified because the talks are private. The Rio mines in New South Wales have positive cash flow, despite the current coal-price slump, the person said.

A deal would mark the latest move by Rio CEO Sam Walsh to exit less-profitable assets as the London-based company focuses on iron ore and copper. It would also be the first purchase for Davis since he raised several billions of dollars from investors to pursue mining acquisitions.

“They’re good mines, they’re large scale, long-life and have relatively low costs. If you have an interest in thermal coal you could do a lot worse than buying these assets,” Chris Drew, a Sydney-based analyst with RBC Capital Markets, said by phone. “Thermal coal is looking pretty difficult right now, but if you take a more positive view on the long term, then there’s potentially an opportunity there.”

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Corners Tower construction delayed over fears of abandoned coal mine (CBC News Edmonton – June 28, 2015)

http://www.cbc.ca/news/canada/edmonton

At least 153 mines once cut through underground Edmonton, historian says

A nearly forgotten part of Edmonton’s history has delayed a condo project in the city’s core. The lot on the corner of 95th Street and Jasper Avenue is scheduled to be the site of Corners Tower, a 28-storey development by Edmonton-based BCM Homes.

Right now, it’s little more than a hole in the ground. The project has been delayed due to fears that there might be one — perhaps two — abandoned coal mines under the site.

Construction is on hold while geological testing is done to check for mines. BCM did not respond to calls for comment. One local historian said old mines are something every developer working near the river valley should be aware of.

“This has been a chronic problem for a better part of a century,” said author Ken Tingley, the city’s former historian laureate.

Coal mining used to be a major industry in Edmonton. Between 1880 and 1970, Tingley said, at least 153 mines were dug, creating countless tunnels that spider-web under the city.

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Australia’s coal miners struggle to tell a good story amid falling public opinion and prices – by Clint Jasper (Australian Broadcasting Corporation Rural – June 29, 2015)

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

Australia’s coal miners feel like they are being hit from all sides, as public opinion about their industry and the price of their ore both continue downwards.

The fall in overall public opinion for the mining industry in general, and ways to address it, have been a topic of discussion for speakers and on the sidelines of two major mining conferences.

At the recent Association of Mining and Exploration Companies convention in Perth, Queensland-based U&M Mining’s Darren Walker admitted the shift in public opinion about coal mining had made operating in today’s environment much more difficult when compared to the good days of the mining boom.

He said groups and activists with an anti-coal agenda had made significant strides in recent years. “That is in part due to the different views and opinions about coal, its uses and its effect on the environment,” he said.

“I think the way that it has changed is that now our company has found we certainly need to sell the story and listen to the community more.”

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Coal worth more to SA than gold – by Sungula Nkabinde (Moneyweb.com – June 26, 2015)

http://www.moneyweb.co.za/

A coal sector strike would hurt the economy more.

The gold sector wage negotiations have taken centre stage in mining circles this week, detracting attention from the upcoming coal sector talks scheduled to start on July 2.

According to this StatsSA article, coal has leapfrogged gold as South Africa’s most important resource, contributing more to GDP. As the resource has become critical for electricity generation in SA, a protracted coal mining strike could leave the economy in a worse off state than if the gold sector negotiations had to turn sour.

Xavier Prévost, senior coal analyst at XMP Consulting, shares this sentiment saying that coal was the top contributor to GDP in 2014 with R101.5 billion in revenue. Gold was at R46.8 billion, behind Platinum Group Metals (PGM) and iron ore, which generated R77.5 billion and R58.7 billion in revenue respectively.

“Coal [is the most important commodity for the future of South Africa’s economy] because it is our source of energy. Without it the whole country will be paralysed, including the gold, iron ore and PGM mines,” says Prévost.

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COLUMN-Adani walking away, or upping ante on Australian coal project? – by Clyde Russell (Reuters U.s. – June 25, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, June 25 (Reuters) – Is India’s Adani Mining preparing to walk away from its A$10 billion ($7.7 billion) coal project in Australia’s Queensland state, or upping the ante in trying to speed up approvals for the huge project?

Adani surprised industry observers by confirming on Wednesday it had halted engineering work on its Carmichael coal project in the frontier Galilee basin in central Queensland.

The planned 40-million tonne per annum mine is supposed to start producing in 2017, with Adani intending to ship to India to meet the growing demand for power generation.

The explanation from Adani on why it stopped independent contractors from working on the mine, rail and port infrastructure was that it was rejigging the budget on the project as it faces delays in obtaining all the necessary government approvals.

Delays in getting approvals from the Queensland government meant that the previous project timelines were no longer achievable, Adani said in a statement.

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Adani halts engineering work on Aus coal mine project: report (The Hindu – June 24, 2015)

http://www.thehindu.com/

Adani Group has halted engineering work related to Australia’s largest proposed mine, raising speculation that it could abandon the contentious $16.5 billion project altogether

India’s mining giant Adani Group has halted engineering work related to Australia’s largest proposed mine, raising speculation that it could abandon the contentious $16.5 billion project altogether.

Adani last week advised four major engineering contractors to stop work on projects around the Carmichael mine in Queensland including a joint venture rail line and the expansion of Abbot Point port, Guardian Australia reported citing industry sources.

The report quoted sources as saying that the move to suspend preparatory work by WorleyParsons and Aecon, Aurecon and SMEC at this stage of a project was unheard of and made no sense as a savings measure even amid delays.

“It’s Adani’s practice not to comment on specific commercial arrangements,” a spokeswoman for Adani was quoted as saying by the daily.

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The People v. the Coal Baron – by David Segal (New York Times – June 20, 2015)

http://www.nytimes.com/

Don Blankenship always knew exactly what he wanted during the years he ran Massey Energy, once the sixth-largest coal company in the United States. He had specific and emphatic ideas about how to operate mines, how to treat employees and how to deal with regulators. When he issued instructions, he wanted them followed to the letter, and this wasn’t just true about his business.

It was also true about his breakfast.

His former maid, Deborah May, discovered this when she was dispatched one morning to McDonald’s to pick up an egg-and-cheese biscuit for her boss. What she returned with had bacon in it, and that was a problem. Mr. Blankenship flung the bacon, Ms. May recalled in a deposition, part of a lawsuit over unemployment benefits.

“He grabbed my wrist,” she said, and gave her a quick lecture: “Anytime I tell you to do anything, I want you to do exactly what I tell you to do and nothing more and nothing less.”

That was a well-known directive at Massey Energy. Middle managers would occasionally find cans of Dad’s Root Beer on their desks — a mnemonic for “Do as Don Says.”

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Polish Opt-Out From EU Climate Pact? Lets Talk, Says Naimski – by Maiej Martewicz (Bloomberg News – June 21, 2015)

http://www.bloomberg.com/

Poland’s leading opposition party is seeking to negotiate exemptions from the European Union’s rules on reducing carbon emissions because the nation’s energy security and economic development depends on coal.

Law & Justice, which opinion polls show winning October’s general election, has vowed to toughen Poland’s stance on climate issues to protect the $526 billion economy, which relies on coal for about 90 percent of its electricity. While the government has been critical of EU emissions goals, it didn’t veto last year’s move toward stricter curbs on discharging heat-trapping carbon dioxide.

“The strategy that we’re planning for the economy rejects the dogma of de-carbonization,” Piotr Naimski, in charge of preparing energy policy at Law & Justice, said in an interview last week. “The role of coal in Poland’s economy fully deserves to receive special treatment.”

Poland will negotiate hard to win “respect” from EU partners for its stance on coal, which Naimski said mirrors the special exceptions, or “opt-outs,” from the bloc’s rules won by a number of other member nations. The country treats development of its coal deposits as a keystone of its energy security in a region dependent on Russian oil and gas imports.

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Canadian mining industry feeling the sting from China’s steel surplus – by Rachelle Younglai (Globe and Mail – June 22, 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.

The steel industry is about to go from bad to worse. China, the world’s biggest consumer of steel, needs less metal. The Chinese housing market, responsible for using the bulk of steel, is bulging with empty properties.

As a result, the country, also the largest steel producer, is swimming in the metal and exporting more to get rid of it.  “Things are getting worse and I don’t see any possibility of a rebound in under three years,” said Tim Murray, managing partner with investment adviser J Capital Research Ltd.

“What I have seen actually is a deepening of the crisis.” Although the country is aiming for economic growth of 7.5 per cent – a healthy clip that miners hope will help turn the commodities market around – there are alarming signs China is struggling with the overcapacity in its steel industry.

Last year, China’s steel exports jumped 50 per cent. The surge came in the same year that steel consumption eased 3 per cent, according to the World Steel Association.

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Coal is not dead, says Adani – by Mark Ludlow (Australian Financial Review – June 16, 2015)

http://www.afr.com/

Indian energy giant Adani, which plans to make a final decision on its $16.5 billion Carmichael Mine this year, believes coal will remain the cheapest source of energy for decades.

As Adani signed agreements with indigenous groups which could deliver benefits worth $250 million over the next 30 years, Adani Australia chief operating officer Samir Vora said talk about the end of fossil fuels was exaggerated.

“Coal is definitely the main source of energy – you can’t deny it. It’s growing every year no matter what anyone says,” he said in an interview.

“India is investing in new generation technology to make coal more efficient to bring down the carbon footprint. There is a balance for everything [like renewables] but coal will undoubtedly remain the main source of fuel for decades.”

Amid speculation Adani would not be able to finance the mega-mine in Central Queensland, Mr Vora said he was confident it would have the funds once final mining and dredging approval was granted by the state and federal governments.

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Coal India now sixth-largest mining company in world: PwC (Financial Express – June 15, 2015)

http://www.financialexpress.com/

Coal India (CIL) has become the sixth-largest mining company in the world in terms of market capital, says a recent PwC report.

Country’s top dry-fuel miner Coal India (CIL) has become the sixth-largest mining company in the world in terms of market capital, says a recent PwC report.

Earlier, the company was at the eighth spot among top 40 global mining firms, according to the report.
Another state-run company, NMDC, the country’s top iron ore miner which also figures in the list, has improved its position by coming to the 21st slot from 24th earlier.

The report “Mine 2015″, which analyses the financial performance of the top 40 mining companies by market capitalisation, says though there have been improvements in most financial statement metrics across the top 40 companies, market values continued to decline.

“The top 40 miners lost $156 billion, or about 16 per cent of their combined market value, in 2014,” the report said, adding that the good news is that it is only half of last year’s slide.

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Campaigns to divest from fossil-fuel holdings gain steam – by Tavia Grant (Globe and Mail – June 15, 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.

From Canadian campuses universities and churches to American foundations and Norway’s parliament, a debate is raging over whether to divest out of fossil-fuel investments.

Thirty campuses in Canada have divestment campaigns to move out of fossil-fuel holdings. No university has announced plans to divest, and some, such as the University of Calgary, have ruled that option out. But change is afoot: Concordia University is creating a $5-million fossil-free fund, while faculty and students at the University of British Columbia and University of Victoria have voted in favour of divesting.

Several churches have divested. And one Toronto-based foundation this year took its investments out of oil sands and coal and is putting them into renewable energy – including one initiative that converts zoo manure into biogas.

Global efforts are gaining momentum. Last year, the Rockefeller Brothers Fund pulled out of fossil-fuel investments, and so did the World Council of Churches. Last month, Oxford University pledged to avoid investments in coal and oil sands firms. This month, Norway’s parliament voted to shed coal-related investments from its $890-billion sovereign-wealth fund, which is the world’s largest.

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BHP Billiton’s Andrew Mackenzie defends coal in battle with gas (Australian Financial Review – June 9, 2015)

http://www.afr.com/

The Group of Seven’s ultimately unremarkable commitment to phase out fossil fuels over the next 85 years only partially reveals the dynamics of commercial self-interest and tactical first-world politics that have successfully driven a wedge between big petroleum and diminishing coal.

The idea that gas sits as a transition fossil fuel that will smooth the world’s embrace of a low carbon future has long been part of the seaborne gas industry’s pitch for long-term relevance. But it is a view that now clearly distinguishes the drillers from the miners in the debate over how the world should manage its carbon dioxide problem.

Pretty plainly, folks like Woodside chief executive Peter Coleman are saying that the gas industry has been weak-kneed about differentiating nice clean gas from its dirty cousin in carbon, thermal coal.

Coleman’s pitch to the World Gas Conference in Paris last week was strident, almost convincing and very certainly crowd pleasing. Nuclear-fuelled Paris, you see, sits at the epicentre of the rapidly shifting tectonics of coal.

France is making a rapid exit from the coal cycle.

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COLUMN-Can Indonesia save the seaborne coal market? – by Clyde Russell (Reuters U.K. – June 10, 2015)

http://uk.reuters.com/

NUSA DUA, Indonesia, June 10 (Reuters) – The coal industry always seems to be looking for a white knight to rescue it from some crisis, and it is perhaps ironic that Indonesia, the world’s largest exporter, is the next great hope that is to save global miners from the current supply glut.

The theory is that as Indonesia ramps up domestic coal-fired power generation, it will rotate its exports to meet local demand, thereby removing millions of tonnes from the seaborne market and bringing it back into balance.

This sounds fantastic to coal producers, particularly those in Australia, South Africa and Russia, who are looking to boost exports into Asian markets.

But white knights have had a somewhat chequered recent history for coal producers and traders. China was once supposed to be the huge market that would suck up every tonne of coal that could be mined, and for a brief few years it looked like it might just work.

Chinese imports rose steadily from 2009 onwards, and by 2011, some forecasters were saying the world’s biggest producer and consumer of coal would import a billion tonnes a year.

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Teck hosts international mining conference – by Katelyn Dingman (Fernie Free Press – June 8, 2015)

http://www.thefreepress.ca/

Key players in the coal mining industry from Colombia, Peru and the Elk Valley made their way to the Elkford Community Conference Centre on Wednesday, June 5 to discuss mining relations and mining practices.

Industry representatives, including a representative from Peru’s Ministry of Energy and Mines and representatives from the Federation of Colombian Municipalities, were eager to learn about the Elk Valley’s mining industry, focusing mainly on their positive community relations.

Delegates from the foreign mining sectors were in admiration of the positive government relationships with the mining industry. Participants were also keen to discuss the tax revenue agreements that allow mining to continue in local communities like the Elk Valley.

“We understand the role coal mining plays in the economic development but also in the livelihoods of people here,” Program Director of Inclusive Communities in Latin America (CISAL) Christopher Yeomans said. “We were coming here to discuss how local communities have come together to negotiate better agreements, better tax revenue agreements with Teck and other companies here.”

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