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Global Coal Roundup: Coronavirus halts Chinese mines; Germany unveils exit plan


According to Market Intelligence, December 2022


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Global Coal Roundup: Coronavirus halts Chinese mines; Germany unveils exit plan


China: The outbreak of a new coronavirus is hitting coal production in China, with mines in Shanxi's Linfen and Yulin cities delaying the resumption of operations after the Lunar New Year break, S&P Global Platts reported, citing market sources. Yulin's Bureau of Energy did not permit coal mines in the city to resume mining after the holidays and ordered workers not to return to work until further notice; the same practice is affecting coal mines in Linfen, according to the report.

* After metallurgical coal markets retreated in 2019, coal producers and industry observers are split on what 2020 will look like but agree that much of the market will depend on what happens in China this year. Globally, metallurgical coal suppliers hoping to grow production will face "creeping resistance" due to permitting concerns and a shift in capital investment driven by climate change concerns, Wood Mackenzie wrote in its 2020 metallurgical coal outlook.

India: The Indian government granted environmental clearances to Coal India Ltd. for 17 coal mining projects that would allow the state-owned miner to boost annual production to 1 billion tons, Mining Weekly reported, citing a statement from Indian Coal Minister Prahlad Joshi. The projects will increase Coal India's annual production by 150 million tons and increase washing capacity to 25 million tons per year.


Germany: After laying out its exit plan for lignite power plants and open cast mines, the German government on Jan. 29 presented the full draft of its legislation to phase out coal by 2038, including the closure strategy for the country's 23-GW fleet of hard coal plants. A maximum of just 8 GW of hard coal capacity will be allowed to operate past 2030, the energy ministry said. Until 2026, plants will be incentivized to shut down via a series of compensation auctions.

* One day after the German government released the draft coal exit law, Uniper SE outlined plans to shut down all of its hard coal-fired power plants in the country within five years. The company said Jan. 30 that it aims to close its four remaining hard coal plants in Germany by 2025, targeting closures at the Scholven and Wilhelmshaven plants by the end of 2022 and at the Staudinger and Heyden power stations by 2025.

Russia: Russia's A-Property seeks to revive a bid to buy Mechel PAO and AO Gazprombank's Elga coal mine, Reuters reported. The company, owned by Russian telecommunications magnate Albert Avdolyan, reportedly requested permission from Russia's antimonopoly authority to fully acquire the property, which is 51% owned by Mechel and 49% owned by Gazprombank.

Austria: VERBUND AG brought back its 210-MW coal-fired Mellach power station for a final quarter ahead of a conversion to burn natural gas, S&P Global Platts reported, citing a company spokesperson. The plant's return to the wholesale market came after Verbund triggered an opt-out clause in the facility's congestion management contract with grid operator APG, according to the report.


Australia: A roof collapse forced mining giant Anglo American PLC to suspend operations at its Moranbah North coal mine in Queensland, Australia, The Australian Financial Review reported. The collapse happened while the company was relocating the site's longwall, and no one was injured. Authorities were notified of the collapse, and geotechnical specialists are investigating, the report said.

* TerraCom Ltd., through wholly owned subsidiary TCIG Resources Pte. Ltd., offered to acquire Universal Coal PLC for 33.5 Australian cents per share, consisting of 10 Australian cents in cash and about 0.6026 of a new TerraCom share, for a 42.6% premium to the last closing price of Universal Coal shares. The company said Feb. 3 that it has acquired 27.3% of Universal Coal under irrevocable undertakings in addition to its recently secured 20% stake, for a total 47.3% stake.

North America

Canada: Canada's government is putting more focus on the importance of the mining sector as it seeks to bolster the critical minerals supply chain amid a broader push by the U.S. and other countries to reduce their dependence on Chinese rare earths, according to Pierre Gratton, president and CEO of the Mining Association of Canada. "Mining hasn't featured this prominently in as long as I can remember, so it's quite exciting," Gratton recently said in an interview.

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.