A roundup of internationalcoal news from March 25 to April 1.
Drivenin part by the foreign currency exchange market, the second-quarter 2016international coking coal benchmark reversedcourse after falling for six consecutive quarters to rise in linewith analyst expectations. Doyle Trading Consultants confirmed the settlementbetween Anglo American Plcand Nippon Steel & SumitomoMetal Corp. The latest $84/tonne settlement represents a 3.7%increase versus the prior quarter,the first quarterly increase since the fourth-quarter2013 settlement, but still 23.3% below the second-quarter 2015settlement. This is the fourth consecutive quarter that the benchmark hassettled below $100/tonne.
Anew report by green groups Sierra Club, Greenpeace and CoalSwarm found that anestimated $1 trillion of investment in new coal-fired power stations may be wastedas the world continues to prioritize climate change and air pollution issues, The Guardian reported. "Thisresearch has revealed hundreds of billions being squandered on unneeded coalplants, but there's more at stake here than money," said Ted Nace,director of CoalSwarm. "In terms of climate safety, the clock is tickingon the transition to clean energy."
Canada: Walter Energy Canada HoldingsInc. announced March 31 that it has been granted an extended stay under its Companies' CreditorsArrangement Act "to continue its sale and investment solicitation processfor the company's assets." The extension runs through June 24. Theextension is not related to the company's U.S. bankruptcy proceedings andapplies only to the sale of its Canadian and U.K. assets. According to thecompany initial sales filing in the Supreme Court of British Columbia, theseinclude the Brule and Willow Creek coal mines near Chetwynd, British Columbia,and the Wolverine coal mine near Tumbler Ridge, British Columbia.
TheEuropean API2 2017 coal futuresincreased by 1.46% to $41.80/tonne from March 29's settlement,attributable to an incremental increase in oil prices, Reuters Africa reportedMarch 30. European cargoes for May delivery to Amsterdam, Rotterdam or Antwerpalso showed a marginal increase at $45/tonne, said the report, citing a trader.Meanwhile, another trader noted that activity has been quiet since Colombia'slargest coal mine, Cerrejon, avoided a union strike, Reuters reported.
Germany: A from Barclays examining theimpacts of the global climate deal on German utilities says that is better situated toweather the coming low-carbon future than RWE AG; however, both utilities'fossil generation fleets face a bleak future in 2030. The recent Barclaysreport looked at the value of generation assets in Germany under the 2 degreescenario, and showed that coal-fired generation — specifically lignite coalfacilities — will take a backseat to natural gas-fired power plants from 2021to 2030.
United Kingdom: The U.K.'s coal industry didnot fare as well in 2015 as it did the prior year, with ,according to the Energy Trends and Energy Prices publications released March 31by the U.K. Department of Energy and Climate Change. The country's total energyproduction surged 9.5% over last year's numbers but coal, which accounted for22.6% of the electricity generated in 2015, fell 7.1% from 2014 levels,attributable to plant closures and conversions, the report said.
, the troubled Russiancoal and steel producer, agreed to renewa deal to supply nearly 1 million tonnes of coking coal over thenext year to China's Baosteel Resources, a subsidiary of , the Russiancompany said March 31. Under the deal, Mechel will supply 960,000 tonnes ofpremium-grade coking coal from its Neryungrinsky mine in southern Yakutia, inRussia's Far East.
India: Amid global oversupply,Coal India Ltd.produced a record 536 million tonnes of coal in the year ended March 31,representing an 8.5% increaseyear over year from the preceding year but short of the 550million-tonne annual output target, Bloomberg News reported April 1, citing aTwitter post by India's coal secretary, Anil Swarup. Production growth slowedin March after the company crossed the 500 million-tonne output mark, whichaccording to reports could lead to the coal ministry of 610 milliontonnes for the state-owned coal major this year.
Aspart of its efforts to promote affordable electricity, Coal India Ltd. hasscheduled a two-day special e-auction on March 30 and 31 that will offercoal to troubled power plants, TheEconomic Times of India reported. About 3 million tonnes of coal will beauctioned off to power plants that have no linkages or power purchaseagreements, according to the report.
Thecoal and power minister of India has ruledout enlisting help from private miners to achieve its target of doublingcoal production by 2020, The EconomicTimes of India reported. Though the original plan involved private minersfilling in the gap as Coal India Ltd. targets 1 billion tonnes a year ofproduction within four years, Minister Piyush Goyal said that the rest of theproduction goal would be met by state-owned companies such as , andNational Aluminum Co. Ltd. through expansions in their mining operations.
China: expectsannual coal sales to rise overthe next five years to more than 100 million tonnes by 2020, CFOZhao Qingchun said at the sidelines of a media briefing for its in Hong Kong onMarch 30. The company booked coal sales of 87.2 million tonnes in 2015, down29.11% from a year ago.
YanzhouCoal Mining Co. Ltd.'s net income attributable to shareholders to 164.5 million Chineseyuan in 2015, from 766.2 millionyuan a year earlier, mainly due to the continued decline of coalprices and Chinese imports due to oversupply. As a result of the lower profit,the company has halved its dividend payment to 1 fen per share for 2015,according to the March 29 report.
isconsidering significantly increasingcoal exports amid declining domestic coal demand and tighterenvironmental regulations, Bloomberg News reported March 29. The company mayexport between 5 million and 10 million tons of thermal coal in 2016 to SouthKorea and Japan, Vice Chairman Ling Wen said. It shipped 1.2 million tons in2015.
China'sbiggest coal region, Shanxi, touteda plan to increase coal exports to slash the supply glut in thecountry, an alternative disapproved by analysts citing woes related to globalglut and weak coal prices, Bloomberg News reported March 29. "Chinaincreasing exports would come at the exact wrong time — that's the last thingthe market needs," Bloomberg quoted Andrew Cosgrove, an analyst withBloomberg Intelligence, as saying.
YanzhouCoal Mining Co. Ltd. unit YancoalAustralia Ltd. said April 1 that it has the US$950 million debt fundingon March 31, after satisfying all conditions. The was announced in mid-February,and the company was issuing nine-year secured debt bonds in two tranches withthe first US$760 million installment received with the closing.
plans to offer a30-year guarantee onits Hunter Valley coal haulage operations to lure infrastructure investors intothe upcoming auction for the business, The Australian Financial Review reportedMarch 29. The proposal involves an initial 15-year contract, which would seeGlencore obtain coal from the Hunter Valley mines to the Port of Newcastle,with exclusive rights for an additional 15 years.
TheConstruction, Forestry, Mining and Energy Union, or CFMEU, warned of if ,or BMA, proceeds with changes to rosters and slashes accommodation entitlementsof some 2,000 employees across its coal mining workforce in Queensland, TheAustralian Financial Review reported March 28, citing CFMEU district presidentSteve Smyth. "They are trying to impose a new world order. … It has buggerall to do with productivity and cost savings," Smyth said.
Mozambique: said March 31 that its partnerMitsui & Co. Ltd.is not considering revising termsof a coal joint venture in Mozambique, refuting reports published in Braziliannewspaper Valor Econômico. Citing the newspaper, Reuters wrote earlier that theJapanese group was mulling over amending the terms of a 2014 deal after Valewrote down US$2.4 billion in assets in the country. Mitsui booked about¥35 billion losses in2015 on its investments in Vale.
As of March 31, US$1 wasequivalent to 6.45 Chinese yuan.
This feature was updated asof 2:06 p.m. ET on April 1. Some external links may require a subscription.