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Global coal roundup: A weekly review of top international stories

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Global coal roundup: A weekly review of top international stories

A roundup of internationalcoal news from July 8 to July 15.

North America

Canada: subsidiary has sent out arequest for proposalson July 13 to supply mid-sulfur coal to its power plants. The utility isseeking 50,000 to 150,000 tonnes, plus or minus 20%, of mid-sulfur coal fordelivery in the third or fourth quarter of 2016, and 100,000 to 300,000 tonnes,plus or minus 20%, of coal contracts for delivery from 2017 through 2019,according to the RFP document.

Asia

China: China has its commitment to loweringits steel and coal capacity, the SouthChina Morning Post reported July 14, citing a statement from the country'sNational Development and Reform Commission. The country plans to lower itssteel and coal output capacity by 45 million tonnes and 280 million tonnes in2016 respectively, announced commission head Xu Shaoshi on June 26. China hasreduced steel capacity by 90 million tonnes in the five years to the end of2015.

Beijingis requiringstate-owned companies that own coal mines as noncore assets to exit theindustry, as part of its nationwide capacityreduction program, the State-owned Assets Supervision andAdministration Commission said in a July 8 notice. The notice, which summarizeda meeting held in June to discuss the impact of state-owned enterprises onovercapacity in the steel and coal sectors, said it will "in principle"require companies which are involved in coal — but not focused in the sector —to exit the industry, without elaborating further.

Two of China's coal majors, andChina National Coal Group Corp.,are expected to play a major rolein the country's coal sector reforms, by buying up coal mines owned by centralgovernment-owned companies that are not focused in the coal industry, accordingto market analysts. Beijing recently decreedthat central government-controlled companies that own coal mines as noncoreassets are to exit the industry as part of nationwide reforms to cutovercapacity in the sector. However, the government gave no details as to whenor how this would be accomplished.

Shenhua Group Corp. Ltd., Baosteel Group Corp., Wuhan Iron & Steel (Group) Corp. and have beenselected under a listof seven state-owned enterprises to lead the establishment of state-ownedcapital investment companies, ChinaSecurities Journal reported July 14, citing the State-owned AssetsSupervision and Administration Commission. Among the four mining companies inthe news, Shenhua Group is expected to leadreforms in domestic coal sector by taking over coal mines owned by centralgovernment-controlled companies.

Shaanxi CoalIndustry Co. Ltd. said July 14 that it to a net profitattributable to shareholders of between 150 million Chinese yuan and 280million yuan in the first half, which compares to a net loss of 954.8 millionyuan posted a yearago. The company closed less efficient production facilities in central China,which lowered production costs and improved profitability.

China's coalimports rose 8.2% on a yearly basis to 108 million tonnes in thefirst six months of 2016 amid the country's drive to cut domestic overcapacity,Bloomberg News reported July 13, citing customs data. China plans as much as 500 milliontonnes of its annual coal output in three to five years.

China's Jiangxi province is 205 coal mines with acombined annual capacity of 12.8 million tonnes this year as part of the localgovernment's five-year plan to close 283 coal mines of 18.7 million tonnesannual capacity, Chinese newspaper NanchangDaily reported July 12. With Jiangxi toeing , 25 provinces have officiallyannounced their respective capacity reduction plans, which together will reduceChina's annual production capacity of coal by 800 million tonnes over the nextthree to five years, according to a research note from China Securities.

Despite its efforts to stem overcapacity through slowingdown approvals for new coal-fired power plants, China is still ontrack to add an average of one new coal-fired plant per week until 2020 dueto projects already in the pipeline and policy loopholes, The New York Times reported, citing a report by Greenpeace EastAsia. Adding to China's current 910 GW of coal-fired capacity, not includingthe retirement of 70 GW, is about 400 GW of excess capacity resulting from theconstruction boom. The construction of unneeded plants would amount to morethan $150 billion in wasted investments, the report said.

Philippines: Thenewly appointed environment secretary of the Philippines said she plans to prioritizerenewables in permit approvals for new power plants over coal and otherfossil fuels, Bloomberg News reported. Secretary of the Environment and NaturalResources Gina Lopez said wind, solar and geothermal projects should be builtto capitalize on falling costs, besides lowering emissions. Lopez's family hasstakes in renewable energy companies, but she said this does not influence herpolicies.

India: India'scoal and power ministry is pushing to haltregulatory approvals for the repair and maintenance of plants over 25 yearsold to discourage delays in thermal coal plant modernization, Bloomberg Newsreported. The delays are due to companies wanting to recover investments on oldgenerators instead of replacing them with new super-critical plants, said Coaland Power Minister Piyush Goyal.

Australia

's A$1 billionHunter Valley coal train network receivedseparate bids during the July 11 auction from major coal carriersAurizon Holdings Ltd., Asciano Ltd.'s Pacific National and U.S.-listed Genesee& Wyoming Inc., The AustralianFinancial Review's Street Talk reported July 12, citing sources.Infrastructure players Morgan Stanley Infrastructure and Macquarie Group'sMacquarie Infrastructure and Real Assets also made separate offers.

has thrown itshat into the ring for AngloAmerican Plc's Australian coal assets, which are expected to fetchupward of A$1 billion, by partneringwith a Texas-based private equity firm, according to The Australian. According to the report, Coronado and Energy andMinerals Group submitted a bid for Anglo America's Grosvenor and Moranbah Northmetallurgical coal mines, putting them in competition with offers fromBHP Billiton Groupand another private equity firm.

WhitehavenCoal Ltd.'s run-of-mine coal output in the June quarter 2% to 5.6 milliontonnes compared to the same quarter of 2015. The Australian producer said July15 that saleable coal production for the quarter rose 8% year over year to 5.1million tonnes, with total coal sales up 22% to 5.2 million tonnes.

Anti-mining group Lock the Gate Alliance Australia's Queensland governmentto block Rio Tinto'ssale of itsmothballed Blair Atholcoal mine to TerraCom Ltd.for A$1, ABC reported July 12. Under the proposed deal, TerraCom will alsoreceive A$80 million from the Blair Athol joint venture to meet the vendor'srehabilitation liability as determined by Queensland's department ofenvironment heritage protection in November 2015.

Financial advisory and asset management firm, LazardAustralia, is running a strategicreview and is assessing market appetite for 's Australian coalassets, The Australian Financial Review'sStreet Talk reported July 12. The firm called on potential buyers for theassets, informing them that the review is likely to lead to the giant coalcompany's divestment of its metallurgical coal mines in Australia. The reviewfollows Peabody's recent agreement to sellits interest in undeveloped metallurgical reserve tenements in Queensland'sBowen Basin for A$104 million in cash plus royalties, said the report.

A new report into black lung disease has blamed for there-emergence of the disease in Australia, TheAustralian Financial Review reported July 13. The disease, which is causedby long exposure to coal dust, has 11 confirmed cases in Queensland sinceworkers were first diagnosedwith it in late 2015.

Africa

South Africa: 's for has lapsedas the remaining conditions were still unfulfilled after the July 15 deadline,according to a Regulatory News Service filing from the London Stock Exchange.All contracts from acceptances of the offer by Universal's shareholders,amounting to about 95.72% of the company's issued share capital, have beenrendered void, and CoAL no longer has voting power in Universal.

As of July 14, US$1 wasequivalent to 6.69 Chinese yuan.

This feature was updated asof 3:12 p.m. ET on July 15. Some external links may require a subscription.