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Global coal roundup: Rio Tinto seeks dismissal of SEC fraud charges

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Global coal roundup: Rio Tinto seeks dismissal of SEC fraud charges

A roundup of international coal news from March 5 to March 12.

Tagging the commodity as the "main loser" among fossil fuels globally, a recent energy report from BP Plc projects that coal will see its growth lag its competition through 2040 but will remain the largest source of energy for electricity generation. According to BP's "evolving transition" scenario, coal will account for just 13% of the increase in power generation by 2040 but will continue to have the largest share in power generation at 28%.

North America

Canada: Teck Resources Ltd. cut its sales guidance on steelmaking coal for the first quarter to approximately 6 million tonnes from the previous range of 6.3 million to 6.5 million tonnes. The revised guidance stems from issues at its Elkview operations in British Columbia and logistical problems at the Westshore Terminals, which are hitting sales.

Asia

China: China imported 20.9 million tonnes of coal in February, down from the prior month's four-year high of 27.8 million tonnes, Reuters reported March 7, citing data from the General Administration of Customs. The decrease was driven by warmer weather and slower demand during the Lunar New Year, compared to strong winter demand in January.

The country's Shanxi province looks to slash 16 million tonnes of backward mining capacity in state-owned coal mines in 2018, Xinhua Net reported March 7. The provincial land and resources department launched a three-month campaign beginning this month to stand against illegal mining in an effort to curtail the resurgence of mining activities in closed coal mines, the report said.

India: Coal India Ltd. missed its production target for the 11th straight month, Business Standard reported March 7, bringing its total from April 2017 through February 2018 to 495.1 million tonnes, which is 7% below the target of 531.3 million tonnes set by India's coal ministry. The decrease in coal output is expected to boost imports, which will be further bolstered by strong power demand in summer.

Indonesia: Lanna Resources PCL decided to invest US$26 million in a new coal mining concession in North Kalimantan, Indonesia, and acquire a stake in PT Pesona Khatulistiwa Nusantara. According to the March 8 agreement, the company will acquire a 40% stake in concession owner Pesona for about US$8.8 million and issue a shareholder loan of US$17.2 million.

Laos: The Thai Supreme Court ordered Banpu PCL to pay compensation of 1.5 billion Thai baht to Siva Nganthavee and his Thai-Lao Lignite Co. for using information to develop the Hongsa coal-fired power plant in Laos, the Bangkok Post reported March 6. Nganthavee alleged that Banpu had "deceptively" entered into a joint development agreement to gain information relating to a US$3.7 billion lignite power plant project in Hongsa, Laos.

Australia

Mitsubishi Corp. completed the sale of its 28.9% ownership interest in the Warkworth coal mine in New South Wales, Australia, to Yancoal Australia Ltd., it said March 7. The company granted a call option to Yancoal in June 2017 to acquire the 28.9% stake for US$230 million.

Lawyers for Rio Tinto, former CEO Tom Albanese and former CFO Guy Elliott filed a consolidation motion to have recent SEC fraud charges against them dismissed, London's Financial Times reported March 6. The charges were filed in October 2017, with the commission accusing the parties of violating the reporting, books and records, and internal controls provisions of federal securities laws related to an acquisition of coal assets in Mozambique, later consolidated under Rio Tinto Coal Mozambique.

The Australian Securities and Investments Commission claimed that Rio Tinto knew within months of completing the deal that its coal resource estimate for its Mozambique asset was "materially" overstated, The Australian Financial Review reported March 7. The watchdog alleged that the coal resources and reserves Rio Tinto released in March 2012 were 67% lower than what the company had estimated in the due diligence assessments for the acquisition.

Africa

South Africa: Exxaro Resources Ltd. expressed interest in acquiring the coal assets of Tegeta Exploration and Resources Pty. Ltd., owned by the Gupta family, Miningmx reported March 8, citing CEO Mxolisi Ngojo. During a conference call for its 2017 results, the South African coal miner's chief executive said the company was specifically interested in the export entitlement at the Richards Bay Coal Terminal port contained in the Optimum coal mine.

This feature was updated as of 11:00 a.m. ET on March 12. Some external links may require a subscription.