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Global coal roundup: Australia's big banks scale back on loans to coal companies

A roundup of international coal news from Jan. 29 to Feb. 5.

North America

Canada: A Canadian court rejected a challenge to a planned terminal near Vancouver that would handle U.S. export coal, paving the way for the project to move forward. Judge James O'Reilly of the Federal Court of Canada ruled that Port Metro Vancouver did not act improperly when in 2014 it approved the Fraser Surrey Docks LP terminal, which will be capable of transferring Powder River Basin coal via BNSF Railway Co. trains for export.

Asia

China: China is set to boost rail freight capacity by a minimum of 200 million tonnes, at least 150 million tonnes of which will be allotted to thermal coal, as the country moves to shift commodity transport away from roads as part of its pollution reduction strategy, Reuters reported Jan. 31. The government is working with the national rail operator to secure coal supply amid an increase in demand for power.

Nearly 10.5 billion tonnes of coal reserves have been discovered in China's Shanxi province over the past five years, Xinhua News Agency reported. From 1949 through 2014, the province's coal production reached 16.2 billion tonnes, and by 2014, it had found 294 billion tonnes of coal reserves.

The country's Hebei province suspended its plan to switch millions of households from coal to natural gas heating systems after supply shortages left homes without heat in subzero temperatures, according to a report in Chinese business magazine Caixin, which said a document from the country's Development and Reform Commission indicated the conversion project will be delayed until 2020.

Inclement weather has delayed thermal coal deliveries and driven prices to record highs in China as the country endures its worst blizzards this winter, prompting concerns about heating and power supply. "The price rally is being driven by blizzard weather across the country, which has blocked highways and even rail transportation in some places and boosted demand for heating," a Jan. 28 Reuters report cited Haitong Futures analyst Xu Bo as saying.

South America

Colombia: Unionized workers at the Cerrejon coal joint venture in Colombia voted in favor of a strike after wage negotiations failed, Reuters reported Jan. 29, citing Sintracarbon union President Aldo Amaya. The union claims to represent about 4,000 of the mine's 5,000-member workforce. The parties returned to negotiations Jan. 26 but failed to reach an agreement.

Australia

A new analysis shows that Australia's giant banks slashed loans to coal companies by more than 50%, or roughly A$1.5 billion, in 2017 amid investor and regulatory pressures over climate change risks, The Sydney Morning Herald reported. New corporate lending by the country's four financial giants plunged from A$3.1 billion in 2015 to A$1.4 billion in 2016 and to just A$99 million in the first half of 2017.

Adani Enterprises Ltd. will not receive federal funding from the Northern Australia Infrastructure Facility to construct a rail link to the company's controversial Carmichael coal mine in Queensland, Reuters reported Feb. 4. The news is a major blow for Adani, which was looking to secure a A$900 million concessional loan for rail to link Carmichael to port.

Altona Energy Plc said Feb. 2 that it entered into a nonbinding memorandum of understanding with joint venture partners Wintask Group Ltd. and Sino-Aus Energy Group Ltd. to jointly assess the potential for a conventional coal mine in the Westfield tenement, part of the Arckaringa property in South Australia.

Glencore Plc filed an application with Australia's Fair Work Commission seeking the termination of the enterprise agreement with the Queensland coal union as a workers' lockout at the company's Oaky North coal mine in Queensland, Australia, continues, The Australian Financial Review reported Jan. 30.

Activist investment group Australian Center for Corporate Responsibility, which pushed BHP Billiton Group to review its membership in the Minerals Council of Australia, is now engaging with Rio Tinto over the same issue ahead of the miner's annual shareholder meetings in April and May, The Australian Financial Review reported Jan. 29.

Africa

South Africa: Anglo American Plc agreed to sell its New Largo thermal coal project and the Old New Largo closed colliery in South Africa for 850 million South African rand, the company said Jan. 29.

This feature was updated as of 9:53 a.m. ET on Feb. 5. Some external links may require a subscription.