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Global Coal Roundup: Weakening US exports, India moves to privatize coal sector

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Global Coal Roundup: Weakening US exports, India moves to privatize coal sector

Weakening export markets for U.S. coal prompted Seaport Global Securities LLC to lower expectations for the second half of 2019 and into 2020, according to a Sept. 10 note. Facing diminishing prospects for coal sales in the U.S. due to a secular decline in utility coal demand, producers have relied on export markets as an outlet for coal supply. Thermal coal used for generating power and metallurgical coal used in steelmaking was in relatively high demand from consumers abroad for the past several months, but the outlook for those markets is deteriorating.

Asia

India: A government committee in India has suggested sweeping reforms to the country's coal industry, including a push to privatize the sector and move away from any allocation of captive mines, according to a Sept. 13 report in the Economic Times. The committee, which is made up of the country's coal secretary, Department of Economic Affairs secretary and revenue secretary, among others, outlined a one-year road map for sector reforms.

Indonesia: The Indonesian government set the country's thermal coal reference price, also known as the Harga Batubara Acuan, at $65.79/tonne for September, down 9.5% from the previous month and down 37.2% from the previous year, according to an S&P Global Platts report. The price set represented the lowest point since October 2016.

Africa

South Africa: Thermal coal producers in South Africa are increasingly facing competition and pressure from new energy alternatives, according to a new report from the U.S.-based Institute for Energy Economics and Financial Analysis. "The global seaborne coal trade is set to go into permanent decline," said Simon Nicholas, an energy finance analyst for the group, according to a Bloomberg report. "South Africa will see increased competition in markets around the world from other major thermal-coal exporters such as Indonesia, Australia and Russia."

North America

Canada: Coal exports from Canada's Ridley Terminals rose 7.7% in August from the previous month, reaching 861,506 tonnes, according to a Platts report. The increase marked the smallest month-on-month increase seen in five months, but the largest year-over-year increase in six months. According to the report, thermal exports reached 319,892 tonnes during the month, up 24.5% from the previous month.

Australia: Coronado Global Resources Inc. said Sept. 13 that it awarded a six-year A$1.3 billion contract to CIMIC Group Ltd.'s global mining services provider Thiess Pty. Ltd. to provide mining services at the Curragh northern coal operations in Queensland, Australia. Thiess' scope of work includes overburden removal and haulage, coal mining and run of mine rehandling services, equipment maintenance and pit dewatering. The new contract, which was awarded after a competitive bidding process, is in addition to Thiess' existing scope of work for provisioning and maintenance of Coronado's electric shovel and supply of an ultra-class truck fleet.

* Coronado amended its secured multicurrency syndicated facility agreement to US$550 million from US$350 million and extended the loan's maturity by 12 months to February 2023, according to a Sept. 12 release. The company entered into the agreement with Australian and international banks in September 2018. Westpac Banking Corp. is the lead arranger and book runner.

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