A roundup of international coalnews from April 29 to May 6.
Czech Republic: A day after New World Resources Plc's main coal-mining unit, , filed a in a Czech court, sharesof the London-listed company have been suspendedfrom trading on the London Stock Exchange as of May 4. The company said in a statementon the same day that its requests to suspend shares on the Prague Stock Exchangeand Warsaw Stock Exchange are currently being processed.
London-listedNew World Resources Plc said May 3 that its main coal-mining unit, OKD a.s., fileda bankruptcy petitionin a Czech court, claiming Europe's first major coal-sector scalp amid one of theworst-ever market downturns for the fuel and steel-making ingredient. New WorldResources said OKD's bankruptcy filing came after discussions with the Czech governmentand a group of major creditors "made no meaningful progress."
Switzerland: Glencore Plc reportedlower year-over-year production for copper, zinc, lead, coal as well as platinum,palladium and rhodium in the first quarter, in line with the production cuts announcedin 2015. Total coal production was down 17% to 29.7 million tonnes, mainly due tothe initial part-closure and subsequent placement of Optimum coal mine into business in the third quarter of 2015, leadingto its ultimate sale.
A newMIT study found that an increase in coal use in India may result in reducedrainfall and droughts across Asia, the EconomicTimes of India reported. "If this is indeed a fact, Asian thermal powergenerators, especially in India and China, will be under pressure to cut down thermalpower generation and abandon new capacity addition plans," a senior analystsaid in the report.
India: For the first time in 15 months,Coal India Ltd.'s monthlyoutput and shipments fell year overyear in April as stockpiles rose amid weak demand, Bloomberg News reportedMay 2. Coal output slipped 3.4% year over year to 40.09 million tonnes, while shipmentsdecreased 2.5% to 42.45 million tonnes.
India'senergy minister Piyush Goyal said that U.S. and European lenders' tighter ruleson foreign coal project investments are derailingefforts to mitigate climate change instead of helping, The Times of U.K. reported. According to Goyal, the restrictions aremaking it more difficult to install equipment that produces coal cleanly and withfewer emissions, forcing generators to stick with old, inefficient plants.
China: China Shenhua Energy Co. Ltd. said April 29 that its profitattributable to equity holders for the first quarter dropped 28.3% year over year to 4.74 billion Chinese yuanfrom 6.61 billion yuan. EPS was 23.8 fen per share, compared to 33.3 fen per shareposted a year ago.
In itsefforts to control a capacity glut in its coal industry, the Chinese governmenthas pledged to ampup its actions against illegal coal projects, Reuters UK reported. China's NationalDevelopment and Reform Commission has already shut down 38 projects for breachingpolicy and is planning set up special inspection teams and make surprise visitsto coal mine regions. "Recent results of a special inspection of illegal coalmine construction showed that there are still a small number of illegal projectsunder construction or in operation, and (we) must pursue rectification work witha more resolute attitude, stronger measures and stricter punishments," thecommission said.
Citingmarket challenges, Yancoal AustraliaLtd. said May 2 that it placed its Donaldson coal operations in New South Wales, Australia,on care and maintenance,a month earlier than anticipated.The move follows a halt in mining activities at the Abel underground mine and thestart of new feasibility studies that will consider the future development of newunderground working areas.
The coalindustry at Hunter Valley has slashed the annualcoal price for Japanese power stations by 9%, to $61.60 per tonne from the 2015"reference price" of $67.80, the NewcastleHerald reported. The return in Australian currency is $81, from $89.20 lastyear. According to most analysts, lower coal prices are brought about by an oversupplyand not by market competition with renewable power, the report said.
Colombia: Drummond Co. Inc. announced May 2 that the 20-day directnegotiation phase of its collectivebargaining agreement with union organizations Sintramineros, Sintradrummondand Agretritrenes is extendedfor 10 more days. The negotiation which officially started April 13 is now expectedto last until May 12.
Duringthe week of April 25, Drummond Co. Inc. presented a new offer to unions Sintradrummond, Agretritrenes and Sintraminerosas part of its collective bargaining negotiations. According to its April 27 newsrelease, the offer includes a signing bonus amounting to 8.8 million Colombian pesos,which is "subject to the signing of the collective bargaining agreements withouta strike," a wage increase of 6.80% during the first year, Consumer Price Indexof 2016 plus 0.05% for the second year and Incentive Pay Category of 2017 plus 0.10%for the third.
Australianthermal coal prices for delivery in June plunged to $46.60 per tonne, the lowestsince 2006, as Colombian miners starttargeting Asia amid a dwindling demand in Europe and North America,Reuters reported April 29. "Currently Colombian coal is about $7-8 (per tonne)cheaper than the Australian coal and if this price trend continues, we are definitelywilling to import more from Colombia," Reuters quoted a utility source workingfor South Korea's East-West Power utility as saying.
Tanzania: Kibo Mining Plc said May 4 that it completed a power definitive feasibility study for its coal-to-power projectin Tanzania and is looking forward to financial close. Company CEO Louis Coetzeeadded that the final phase of the bankable feasibility study for Mbeya will nowstart.
South Africa: Coal of Africa Ltd. said April 29 that a Chinese industrialconglomerate is conducting due diligence to acquireup to a 34% share in its unit, BaobabMining & Exploration Pty. Ltd., which holds the mining right overthe Makhado cokingcoal project in South Africa. Under the memorandum of understanding, will pay about US$113.9 million in cash for the stake, putting a value of at leastUS$335 million on the Makhado project.
As of May 5, US$1 is equivalentto 2,931.0 Colombian pesos.
This feature was updated as of2:03 p.m. ET on May 6. Some external links may require a subscription.