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Global Coal Roundup: Japan faces possibility of stranded coal assets

Asia

Japan: Japan may be left to deal with US$71 billion in stranded coal assets due to the falling price of renewable energy, according to a new report from The Carbon Tracker Initiative. Researchers used asset-level financial models to analyze power plant data and determined that it will be cheaper for Japan to build new renewable energy generation than to run coal plants as early as 2025.

India: Coal India Ltd. will halt production at its Dipka mine in India's Chhattisgarh province for at least 30 days due to flooding in the region, Reuters reported Oct. 2, citing a senior company official. Dipka has an annual coal production capacity of over 30 million tonnes and makes up about 5% of the company's overall output, according to the report. The halt comes as the country is trying to cut its dependence on coal imports while also planning to sell a stake in Coal India.

* Coal India unit Mahanadi Coalfields Ltd. resumed operations at its Talcher coalfields following protests by local villagers over the death of a goat at the site, Reuters and Press Trust of India reported Oct. 1. Protesters were reportedly demanding 60,000 Indian rupees for the dead goat, which was accidentally killed by a coal transportation tipper. People trespassing at the mine to pick coal and firewood and graze their livestock remains an issue at the site, according to the reports, which cited a company spokesperson.

Europe

Germany: The German government will allocate €1 billion to a compensation fund for utilities phasing out coal, a fraction of the amount anticipated by the owners of the power plants, according to a report by Bloomberg News. The compensation will be paid out for a total of 5 GW of coal capacity to be closed by 2023, Bloomberg said Oct. 2, citing an unidentified government official. The German energy ministry told S&P Global Market Intelligence that "work on the topic of coal exit is ongoing" and that it does not comment on the interim status of the related legislation.

Spain: Endesa SA intends to shutter all of its Iberian coal-fired power plants, according to an S&P Global Platts report, ending production from two of Spain's largest power stations, the 1.4 GW As Pontes and 1.1 GW Litoral de Almeria plants, it said late Friday. Continued operation of uncompetitive coal plants "is not foreseeable in the future" due to the change in market conditions, notably the increase in CO2 prices, the Enel-owned utility said.

Australia

Australia's Department of Industry lowered its forecasts for thermal coal prices in response to weaker market demand for the commodity, Platts reported, citing the department's "Resources and Energy Quarterly." In the latest report, the Canberra-based unit cut its forecast from the June edition for the average FOB Newcastle 6,000 kcal/NAR thermal coal spot price for 2020 by 7% to $68 per tonne. The 2019 price was also dropped by 7%, to $77/t, while the forecast for 2021 was lifted by 3% to $69/t.

* Bounty Mining Ltd. signed a facility agreement for a A$90 million refinancing transaction with QCoal Pty. Ltd. after rejecting multiple funding proposals from the latter. The facility comprises cash funding of A$60 million and a guarantee facility for A$30 million, according to an Oct. 7 release. The cash-strapped miner recently defaulted on an upsized A$35 million working capital facility provided by major shareholders Amaroo Blackdown Investments PTE Ltd. and Amaroo Blackdown Investments LLC.

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