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Global coal roundup: Group challenges bullish projection on Indian coal demand

A roundup of international coal news from Nov. 20 to Nov. 27.

Europe

Poland: Lubelski Wegiel BOGDANKA SA received a mining license for the Ostrów deposit, part of its Bogdanka coal property in Poland. According to a Nov. 20 release, the deposit hosts about 186 million tonnes of coal and is a key factor in the company's plan to double its exploitable resources.

Asia

China: Chinese coking coal futures reached a two-month high of 1,281.50 yuan per ton before closing at 1,264.50 yuan per ton Nov. 21, driven by leaner supply and a projected increase in consumption when production cuts are lifted after winter, Reuters reported. Beijing-based CRU consultant Wang Di was quoted as saying there might be some disruption in supply from Australia, which is the biggest supplier of coking coal to China.

China will likely meet its 2016 goal of reducing coal capacity by 500 million tonnes within five years ahead of schedule, Xinhua News reported Nov. 21, citing an official with the country's top state planner. Lian Weiliang, deputy head of the National Development and Reform Commission, said the number of coal mines in China will drop to about 7,000 by the end of 2017 from 10,800 in 2015.

India: A recent energy report challenges the assumption that India will see substantial increases in coal consumption amid the rapid growth of its economy. According to the Institute for Energy Economics and Financial Analysis, peak thermal coal use could be "just around the corner," contrary to the International Energy Agency's projection that coal demand in the country will more than double to 1,230 million tonnes of coal equivalent in 2040, from 575 million tonnes of coal equivalent in 2016.

India's imports of North American coal in October quadrupled year over year to 2.1 million tonnes, the highest since at least January 2015, Reuters reported Nov. 20. Imports of the fossil fuel from the U.S. are expected to further increase in the coming months amid the country's ban on petroleum coke as part of its efforts to tackle air pollution.

Australia

The Queensland Labor party is tipped to win the popular vote and form a majority government in the Australian state parliament, although it will be several days before the full election results are in, according to several media outlets. Ahead of the elections, the party said it would veto federal government funding assistance for Adani Enterprises Ltd.'s giant Carmichael coal mine in the state, whereas the rival Liberal National Party came out in favor of the A$900 million Northern Australia Infrastructure Facility, citing the project's economic benefits.

The Labor government is expected to offer Adani a package of deferred royalty payments as well as infrastructure funding, totaling A$460 million, for the company's Carmichael coal mine, The Australian reported Nov. 23, citing unnamed sources close to the deal.

Glencore Plc ceased production at the Oaky No. 1 mine within its Oaky Creek coal complex in Queensland, Australia, S&P Global Platts reported Nov. 23, citing several sources. Sources pointed to the depletion of minable resources at the site as a factor for the shutdown.

ENGIE SA and Mitsui & Co. Ltd. agreed to sell the Loy Yang B coal power plant in Victoria, Australia, to Alinta Energy Holdings Pty. Ltd., Bloomberg News reported Nov. 22, citing an emailed statement from Alinta. The deal for the 1,000-MW power station is worth about A$1.2 billion, according to a separate report from The Australian.

Africa

A number of large coal producers in South Africa reached a three-year wage settlement with the National Union of Mineworkers, according to a Nov. 23 release from the Chamber of Mines of South Africa. Under the agreement, effective July 1, entry-level to operator workers at larger companies will get a 1,100 South African rand increase in the first year with a 7.5% increase in the second year and an 8.5% increase in the second and third year.

South Africa: Exxaro Resources Ltd. expects its coal production to increase 8% in 2017 to 46.4 million tonnes of coal, excluding buy-ins, compared to the 2016 output. In a pre-close trading update ahead of the end of 2017, the group announced thermal coal production is expected to increase 8% over 2016 to 44.1 million tonnes, while metallurgical coal production is seen up 10% at 2.2 million tonnes.

This feature was updated as of 10:12 a.m. ET on Nov. 27. Some external links may require a subscription.