Additional 6-7 mt to be available for the sector if proposal implemented
Tue, Feb 07, 2012
New Delhi:The government is considering reserving forward e-auction of coal, exclusively for the power sector. The proposal could be part of the detailed road map being finalised by the Prime Minister's Office (PMO) for the smooth sailing of power companies amid a severe coal crunch that is hurting investments worth thousands of crore.
The proposal is part of the discussions currently being held by the PMO with representatives of infrastructure sectors, including coal and power, for easing coal availability, according to sources. If implemented, it could make an additional six-seven million tonne (mt) coal available for the power sector. Forward contracts account for 15 per cent of the 45 mt Coal India (CIL) sells through e-auction every year.
The status report and a blueprint for action would be prepared within two weeks to solve the ongoing coal crisis. This could also include asking CIL to supply coal to power companies at a negotiated 85 per cent of the contracted quantity.
The move comes after month-long discussions of a committee of secretaries (CoS) headed by the PM’s principal secretary Pulok Chatterjee. The PMO is currently evaluating a road map to ramp up supply on the basis of the data on expected production received from the coal ministry and discussed in the first meeting of the CoS last Wednesday.
The meeting came a day after the government forced CIL to roll back a 12.5 per cent rise in coal prices due to a new grading system based on gross calorific value. Earlier, power companies had raised the issue with the government.
The PM has emphatically expressed the need to resolve the crisis after taking on board concerns raised by a delegation of power companies’ heads earlier this month, sources said. “At Wednesday’s meeting, the PMO asked the coal ministry the extent of supply of contracted quantity that can be met by CIL so that Fuel Supply Agreements (FSAs) can be signed. The PMO would firm-up a final decision on the matter soon,” a source close to the development said.
Normally, CIL first signs Letters of Assurance (LoAs) with consumers, which get converted to FSAs after the consumer meets certain obligations of project development within a time frame. The LoAs specify the terms and conditions of supply on the basis of a mutually agreed variation in annual contracted quantity (ACQ).
Historically, LoAs have been signed by CIL at 90 per cent of ACQ, meaning CIL would face penalty for a shortfall below 90 per cent and incentivised for excess supply over 90 per cent.
However, the world’s largest coal miner has, off late, started insisting on signing FSAs at only 50 per cent of ASQ, fearing penalty at the back of a severe dip in production. In fact, it has only signed three FSAs since March 2009 as delayed environment clearances took a toll on production.
Around 18,500 Mw capacity power projects commissioned since then – requiring 90 MT coal annually — are likely to operate at 55 per cent of their capacity.
CIL’s output remained flat at 431 mt last financial year. Production during six months ended September this year was down 11 per cent, declining for the first time in the company’s foreseeable history. The company’s share price at the Bombay Stock Exchange on Monday closed at Rs 321.8, up 1.4 per cent as compared to previous close.
(sourced Business Standard)
Showing posts with label coal industry. Show all posts
Showing posts with label coal industry. Show all posts
Tuesday, February 7, 2012
Monday, January 30, 2012
India Govt should exempt levy over coal for affordable power
Mon, Jan30, 2012
NEW DELHI (Commodity Online): To ensure the accessibility of power at affordable costs, the industry body the Associated Chambers of Commerce and Industry of India (ASSOCHAM) wants the India Government to exempt thermal or steam Coal from basic customs duty and countervailing duty.
The customs duty and countervailing duty for thermal or steam coal which increase the power tariff by 25 paise per unit and go against the basic tenets of ensuring long-term fuel sustainability and energy security.
Power sector is one of the highest taxed due to non-availability of any input tax credit on excise, countervailing duty, value added tax and service tax and the imported coal is subject to imposition of 7.55% customs duty for imports from Indonesia and 10.83% for imports from other countries.
According to DS. Rawat, Secretary General, ASSOCHAM, higher power tariff tends to have recessionary impact due to cascading effect on all goods and services. Major countries like the United States, Canada, Australia, Japan and Brazil do not levy any customs duty on import of thermal coal.
In addition, there is countervailing duty of five per cent. This distorts the field in favour of domestic Coal based projects and discourages investments in imported coal based projects.
Also the independent power producers resorting to coal imports are adversely affected by the volatility in prices of imported coal, unpredictable long-term pricing arrangements, volatility in shipping rates and exchange rates, logistical and infrastructural constraints for moving imported coal from ports to power stations.
“To bridge the gap in demand and supply, the emphasis is clearly on importing thermal coal or acquiring new mines abroad. It is anticipated that shortage of domestic coal will continue to persist over the medium term as the additional coal generation programme is not likely to catch up with the growing demand led by aggressive capacity addition to align with economic growth targets.”said Rawat.
Thermal generation (coal, lignite and gas) continues to play 65% share of generation capacity with domestic coal supply not sufficient to meet the requirements.
(sourced Commodity Online.com)
NEW DELHI (Commodity Online): To ensure the accessibility of power at affordable costs, the industry body the Associated Chambers of Commerce and Industry of India (ASSOCHAM) wants the India Government to exempt thermal or steam Coal from basic customs duty and countervailing duty.
The customs duty and countervailing duty for thermal or steam coal which increase the power tariff by 25 paise per unit and go against the basic tenets of ensuring long-term fuel sustainability and energy security.
Power sector is one of the highest taxed due to non-availability of any input tax credit on excise, countervailing duty, value added tax and service tax and the imported coal is subject to imposition of 7.55% customs duty for imports from Indonesia and 10.83% for imports from other countries.
According to DS. Rawat, Secretary General, ASSOCHAM, higher power tariff tends to have recessionary impact due to cascading effect on all goods and services. Major countries like the United States, Canada, Australia, Japan and Brazil do not levy any customs duty on import of thermal coal.
In addition, there is countervailing duty of five per cent. This distorts the field in favour of domestic Coal based projects and discourages investments in imported coal based projects.
Also the independent power producers resorting to coal imports are adversely affected by the volatility in prices of imported coal, unpredictable long-term pricing arrangements, volatility in shipping rates and exchange rates, logistical and infrastructural constraints for moving imported coal from ports to power stations.
“To bridge the gap in demand and supply, the emphasis is clearly on importing thermal coal or acquiring new mines abroad. It is anticipated that shortage of domestic coal will continue to persist over the medium term as the additional coal generation programme is not likely to catch up with the growing demand led by aggressive capacity addition to align with economic growth targets.”said Rawat.
Thermal generation (coal, lignite and gas) continues to play 65% share of generation capacity with domestic coal supply not sufficient to meet the requirements.
(sourced Commodity Online.com)
Thursday, January 19, 2012
Coal minister assure more coal for power sector
Thursday, 19 Jan 2012
The Indian government is making all efforts to increase coal production. Target of Coal India Limited of 440 million tones for current financial year will be achieved.
Production from other coal blocks is also being monitored and measures will be taken to achieve increases production from these blocks also. This was stated by coal minister, Mr Sripraksh Jaisawal during a meeting with a group of industrial representing Association of Power Producers.
The minister said the coal linkages are being rationalized, bidding of coal blocks will start soon. He said efforts are also being taken to modernize CIL so that production can be increased significantly.
Mr Jaiswal added that the government is aware of requirements of power sector and is trying its best to sort out issues.
The Indian government is making all efforts to increase coal production. Target of Coal India Limited of 440 million tones for current financial year will be achieved.
Production from other coal blocks is also being monitored and measures will be taken to achieve increases production from these blocks also. This was stated by coal minister, Mr Sripraksh Jaisawal during a meeting with a group of industrial representing Association of Power Producers.
The minister said the coal linkages are being rationalized, bidding of coal blocks will start soon. He said efforts are also being taken to modernize CIL so that production can be increased significantly.
Mr Jaiswal added that the government is aware of requirements of power sector and is trying its best to sort out issues.
Tuesday, December 6, 2011
Thar coal: Pakistan turns down Indian businessman investment proposal
Tue, December 6, 2011
Pakistan has turned down a proposal by an Indian businessman to invest in the Thar coal project, an official source told The Express Tribune on Tuesday.
A senior official of the Government of Sindh, also associated with the Thar coal project, on the condition of anonymity told The Express Tribune that the offer was made by Indian industrial tycoon Lakshmi Mittal’s company and was brokered through a consultant firm in Dubai.
The investment offer was reportedly above $2 billion.
In the offer, it was said that the coal obtained from Thar would be used by the company ArcelorMittal’s steel plants situated in India and other countries.
The official said that the reason why ArcelorMittal expressed interest in the project was the low rate of the coal.
“Indian demand for coal is increasing rapidly and Thar coal can be a cheap source of energy for Indian industries,” the official said.
The reason for rejecting the offer, according to the official, was sensitive relations between the two countries.
Officially there is no ban on cross border investment between Pakistan and India but there is a lack of confidence on the part of investors.
“We can attract a lot of investment from India if we are able to hold an investment conference in India,” the official said.
The official also added that India had a vast experience in the coal sector and it would be a “win win situation” for both the countries.
(sourced Tribune.com)
Pakistan has turned down a proposal by an Indian businessman to invest in the Thar coal project, an official source told The Express Tribune on Tuesday.
A senior official of the Government of Sindh, also associated with the Thar coal project, on the condition of anonymity told The Express Tribune that the offer was made by Indian industrial tycoon Lakshmi Mittal’s company and was brokered through a consultant firm in Dubai.
The investment offer was reportedly above $2 billion.
In the offer, it was said that the coal obtained from Thar would be used by the company ArcelorMittal’s steel plants situated in India and other countries.
The official said that the reason why ArcelorMittal expressed interest in the project was the low rate of the coal.
“Indian demand for coal is increasing rapidly and Thar coal can be a cheap source of energy for Indian industries,” the official said.
The reason for rejecting the offer, according to the official, was sensitive relations between the two countries.
Officially there is no ban on cross border investment between Pakistan and India but there is a lack of confidence on the part of investors.
“We can attract a lot of investment from India if we are able to hold an investment conference in India,” the official said.
The official also added that India had a vast experience in the coal sector and it would be a “win win situation” for both the countries.
(sourced Tribune.com)
Thursday, November 3, 2011
SA Coal, Use it or lose it
Thursday, 3 Nov 2011
SA has some of the world’s richest coal deposits . Yet the country is failing to exploit this natural resource, as Charlotte Mathews reports.
The idea that SA’s coal industry needs a co-ordinated “road map”, or long- term plan, was first aired four years ago by a handful of its top executives — Eskom’s Steve Lennon, Exxaro’s Sipho Nkosi and Anglo American’s Roger Wicks.
It has taken three years, and some energetic problem-solving, to reach a point where the first report of the SA Coal Road Map project is about to be released. The report will help the country plan what to do with its coal deposits over the next few decades.
It’s a vital industry. In 2009, according to Chamber of Mines figures, coal became the country’s largest mining activity, generating R65bn in revenue against R49bn from gold, the mineral that has always distinguished SA in the world’s eyes.
The team, organised by the Fossil Fuel Foundation, an industry think-tank, had to overcome issues such as the coal companies’ desire to keep market-sensitive data confidential, and possibly breaching the Competition Act, if they shared information.
In 2008 the department of minerals & energy was split into two , one department focusing on minerals, the other on energy. While key staff were moved around, the project had to wait.
It had a relatively modest budget of about R4m, which would have been enough if the participants had contributed their data. But that didn’t happen and a lot more legwork was needed. The project will need more funds for the second phase.
“Bit by bit we had to accumulate the information we needed,” says steering committee chairman Ian Hall. But as the project evolved, the levels of communication and co-operation improved.
“We attracted a number of people who wanted to be included,” Hall says. “The road map’s stakeholders now represent a big cross-section of the industry.”
The need for long-term planning in the industry was highlighted by government’s recent release of its IRP2 strategy for SA’s future electricity generation mix. The target under the IRP2’s “balanced scenario” is to have 48% of SA’s energy come from coal by 2030 compared with 93% now.
For Greenpeace SA, even that is too much. A report commissioned by the organisation entitled “The True Cost of Coal” and released last week says the externalised cost of the Kusile coal-fired power station (mainly the effect on water sources) would be about R60,6bn /year. That is equivalent to about 97c- R1,88/kWh , which means the indirect costs of the station are at least a third more than the 65c/kWh that Eskom’s customers will pay in 2012/2013.
Eskom declined to comment on the Greenpeace report but referred to its previous statements on climate change and pollution control. It has a “six-point plan” to contribute to global efforts to combat climate change, including reducing its reliance on coal over time, installing clean coal technologies at new coal-fired power stations, improving its own and its customers’ energy efficiency and researching other ways to reduce carbon emissions.
Greenpeace’s view is obviously not shared by the mining industry, or parts of government, which feel SA is not extracting as much value from its coal endowment as other countries.
Most of SA’s coal is thermal, used in power stations, and it has relatively small quantities of coking coal, which is used in steelmaking. There are also scattered deposits of anthracite, a higher-value type of energy coal.
Latest data from the department of mineral resources shows SA ranks fourth-largest in the world in its coal reserves of 30,4bn t but seventh-largest in production, at 250,6Mt in 2009. At current rates of extraction, SA has about 40-50 years of coal supplies.
Hall told last month’s SA National Energy Association (Sanea) conference that the last authoritative estimate of SA’s recoverable coal resources was carried out in 1982, suggesting the country had 59,2bnt . In 2009 the figure was adjusted for depletion to an estimate of 33,1bnt. The Council for Geosciences is updating these figures and is expected to release its report in January.
SA’s coal sales rose a modest 8,7% over the 10 years to 2009 but most of the increased output went to Eskom. Coal exports were almost flat in that period, peaking at 71,5Mt in 2003 but falling as low as 57,8Mt in 2008, the year when the average benchmark export coal price soared to R737/t from R361/t in 2007. In that year average inland prices for coal were R153/t, from R108/t in 2007. Domestic coal prices are generally below exports, mainly because Eskom, the biggest customer, uses a lower quality.
About 84% of SA’s coal comes from the Witbank, Ermelo and Highveld coal fields, which will be largely exhausted within the next 10 years. While the Waterberg has substantial resources of coal — about 40% of the country’s remaining resources — it presents geological challenges which are likely to make mining more expensive. Lack of rail infrastructure and minimal water will also have to be addressed.
The country’s biggest coal producers are Anglo American Coal, Exxaro, Sasol Mining, Xstrata Coal and BHP Billiton Export Coal SA (Becsa). Other large producers include Total Coal, Optimum and Shanduka. There are also numerous smaller miners with one or two mines or projects in development. Among the five biggest producers, only three have major new projects which will supply both Eskom and export markets: Anglo American’s US$512m Zibulo mine in Mpumalanga; Exxaro’s R9bn Grootegeluk expansion in the Waterberg; and the Xstrata/African Rainbow Minerals R3,5bn joint-venture Goedgevonden mine near Witbank.
When Becsa, Exxaro, Anglo Coal and Rio Tinto recently put up for sale some of their undeveloped coal prospects, it was widely seen as a vote of no confidence in long-term growth prospects for the SA coal industry.
This is surprising, considering strong demand from India and China for SA coal and Eskom’s heavy reliance on coal- fired power stations. The utility has even expressed a desire to protect its long- term supply. The only sector of the coal industry that is showing an appetite for new projects is the junior miners, which have more appetite for risk.
Some pressures affecting investment in coal are global: fluctuations in prices, changes in SA’s target markets from Europe to Asia, and environmental pressures against burning fossil fuels. Others are shared by SA’s entire mining industry: talk of nationalisation, delays and complexities in securing mining licences and, since the global economic crisis started, limited access to financing for new projects.
Exxaro chairman Len Konar says in the group’s latest annual report that in the 16 years to 2009 SA’s mining sector actually shrank, while the global average growth in mining was 5%. He ascribes this to outside factors like the volatile rand-dollar exchange rate and the recession. He says other issues affecting the local industry are being addressed, such as infrastructural challenges, bureaucratic delays, regulatory uncertainty, the balance between productivity and cost, and the limited pool of skills .
In his medium-term budget policy statement last week, finance minister Pravin Gordhan conceded SA had lagged behind other countries, like Brazil and Australia, in growth in mining production in the past eight years. He identified six main factors: regulatory uncertainty, logistical challenges, limited electricity generation capacity, currency volatility, the debate on nationalisation and the risks of deep-level gold mining .
To this, says Frans Barker of the Chamber of Mines, should be added the high cost of services provided by parastatals, like electricity, transport and potentially water. Xavier Prevost of XMP Consulting adds that talk of nationalisation is another big issue.
“The department of mineral resources said recently it didn’t think this was deterring investment. When you talk to investors from other countries, the first question they ask is whether SA is going to nationalise the mines. Until government makes a decision on it, no-one is going to invest in mines in SA.”
The logistical problem of rail and port bottlenecks is cited repeatedly by participants in the coal industry.
Prevost says SA’s problems are not impossible to overcome but that the country is not tackling them properly.
“Certainly, the coal industry is responsible for some of them. Transnet’s inability to provide enough rail capacity to move coal from mines to ports and local users has been one of the main issues preventing many mine projects from becoming feasible .
“Mines are prepared to invest in rail, but Transnet isn’t implementing talk into action. Transnet has been discussing expansion for a long time, but nothing happens,” he says.
Slides presented by Transnet CEO Brian Molefe at the recent Coaltrans conference in Madrid showed five coal export corridors in SA: Richards Bay Coal Terminal (RBCT) , Richards Bay Navitrade Terminal and Matola (the coal terminal at Maputo) for thermal coal, while Maputo main port and Durban Bulk Connections also handle sized coal. That gives total port capacity of 99,5Mt/year against rail capacity of 75,4Mt/year .
Molefe said Transnet’s target was to build up coal freight capacity to 81Mt/year by 2014/2015.
But why isn’t Transnet targeting at least 100Mt/year, if that’s what the ports can handle? There are two main reasons: the parastatal’s own lack of funding and, possibly more important, Transnet’s belief that the coal industry cannot produce as much as it claims it will.
With changing patterns of global economic growth, the focus of SA’s coal exports has moved from its traditional European market to Asia. Indian and Chinese buyers have been actively seeking to secure coal offtake from SA in the past couple of years.
The Financial Times reported on October 17 that the European Union’s “Energy Roadmap to 2050”, being prepared for release by the end of this year, suggests European consumers’ costs of energy would double by 2050 as wind power, requiring more infrastructure, would contribute more to the energy mix than nuclear and coal. Coal and gas currently provide about half of the EU’s electricity.
The International Energy Agency’s World Energy Outlook suggests OECD countries’ coal-fired power generation will fall up to 2035 as they move away from fossil fuels, but this will be more than offset by rising demand from developing countries. China’s 600 gigawatts (GW) of new coal-fired electricity capacity exceeds the current capacity of the US, EU and Japan.
According to statistics that Lars Schernikau of coal traders HMS Bergbau presented at the recent Coaltrans Madrid conference, India’s demand for steam coal is expected to rise to 1bn t by 2017 as domestic production cannot meet the country’s needs. He says it is difficult to predict China’s production and imports but its impact on the global thermal coal market is likely to be “huge”.
Yet the 2009/2010 department of mineral resources report forecasts that SA’s coal exports will increase only “slightly” this year. It says though demand from developed countries is expected to remain weak until clean coal technology is widely used, demand from Asia could push up prices.
Are changes in markets and fluctuating prices deterring investment in SA coal mines? Not as much as generally believed, Prevost says.
“Back in 2006/2007 SA was exporting 88% of its coal to Europe but, because it was unable to meet that demand, we lost ground, and now Colombia, which is further away, is supplying more coal to Europe than we are.
“Our main market is now Asia, but the Indians and Chinese buyers are very price-sensitive. When the price was $122/t, demand from Asia fell. Now the price is $110/t-$112/t and no-one is buying , which is why RBCT is not moving the tonnages that Transnet is delivering to the port.”
But that’s no reason for Transnet to slow down rail expansion, Prevost says.
“The general view in the market is that coal is the fuel of the future. Germany is replacing its nuclear power stations with coal-fired power stations using clean coal technology. Demand for coal will be good for 20 years or more. Clean coal technology will not remove all emissions but it will reduce them to negligible levels.”
Greenpeace SA doesn’t agree. “The assessments made by the Business Enterprises unit at the University of Pretoria show that ‘clean coal’ simply does not exist,” Greenpeace says in its report.
Hall told the Sanea conference that coal accounted for almost a third of the world’s primary energy in 2010, its highest share since 1970. The main reason is rapid demand from industrialising populations in the developing economies of China and India. The populations of the world’s cities will rise to 5,2bn by 2035 from 3,3bn at present, pushing up demand for energy and steel.
The SA Coal Road Map is to present 30-year scenarios for the industry, open these options for comment, and then move into its second phase, identifying a preferred scenario and ways to achieve this scenario.
The Fossil Fuel Foundation didn’t want to disclose its findings ahead of the general release. But Hall’s comments at the Sanea conference suggest the road map presents three scenarios.
The first assumes significant exploitation of SA’s coal resources, if government’s plans for 10GW from nuclear power stations and its renewable targets encounter capital constraints and delays. That would mean building more coal- fired power stations and developing the resources in the Waterberg, Soutpansberg and Limpopo basins, with associated rail infrastructure.
The second possibility is “moderate” use of SA’s coal, if government achieves its targets and SA fulfils its carbon emission-reduction promises. That would still see some development of rail infrastructure in the Waterberg, but slowly. Coal exports would rise until 2020, but only gradually, if at all, after that.
The third scenario is that the country’s future energy and that of the rest of the world would be sourced mainly from non fossil fuel sources, which means no new coal-fired power stations would be built and coal exports would decline.
If clean coal technology can be made to work successfully, SA should not ignore a major resource that can generate cheap electricity for economic development and continue to provide a large number of jobs.
Though there are environmental reservations about coal mining, the reality is that if SA doesn’t exploit its coal reserves, its own needs and those of the coal-hungry markets of Asia will be sourced from elsewhere.
(sourced Financial Mail)
SA has some of the world’s richest coal deposits . Yet the country is failing to exploit this natural resource, as Charlotte Mathews reports.
The idea that SA’s coal industry needs a co-ordinated “road map”, or long- term plan, was first aired four years ago by a handful of its top executives — Eskom’s Steve Lennon, Exxaro’s Sipho Nkosi and Anglo American’s Roger Wicks.
It has taken three years, and some energetic problem-solving, to reach a point where the first report of the SA Coal Road Map project is about to be released. The report will help the country plan what to do with its coal deposits over the next few decades.
It’s a vital industry. In 2009, according to Chamber of Mines figures, coal became the country’s largest mining activity, generating R65bn in revenue against R49bn from gold, the mineral that has always distinguished SA in the world’s eyes.
The team, organised by the Fossil Fuel Foundation, an industry think-tank, had to overcome issues such as the coal companies’ desire to keep market-sensitive data confidential, and possibly breaching the Competition Act, if they shared information.
In 2008 the department of minerals & energy was split into two , one department focusing on minerals, the other on energy. While key staff were moved around, the project had to wait.
It had a relatively modest budget of about R4m, which would have been enough if the participants had contributed their data. But that didn’t happen and a lot more legwork was needed. The project will need more funds for the second phase.
“Bit by bit we had to accumulate the information we needed,” says steering committee chairman Ian Hall. But as the project evolved, the levels of communication and co-operation improved.
“We attracted a number of people who wanted to be included,” Hall says. “The road map’s stakeholders now represent a big cross-section of the industry.”
The need for long-term planning in the industry was highlighted by government’s recent release of its IRP2 strategy for SA’s future electricity generation mix. The target under the IRP2’s “balanced scenario” is to have 48% of SA’s energy come from coal by 2030 compared with 93% now.
For Greenpeace SA, even that is too much. A report commissioned by the organisation entitled “The True Cost of Coal” and released last week says the externalised cost of the Kusile coal-fired power station (mainly the effect on water sources) would be about R60,6bn /year. That is equivalent to about 97c- R1,88/kWh , which means the indirect costs of the station are at least a third more than the 65c/kWh that Eskom’s customers will pay in 2012/2013.
Eskom declined to comment on the Greenpeace report but referred to its previous statements on climate change and pollution control. It has a “six-point plan” to contribute to global efforts to combat climate change, including reducing its reliance on coal over time, installing clean coal technologies at new coal-fired power stations, improving its own and its customers’ energy efficiency and researching other ways to reduce carbon emissions.
Greenpeace’s view is obviously not shared by the mining industry, or parts of government, which feel SA is not extracting as much value from its coal endowment as other countries.
Most of SA’s coal is thermal, used in power stations, and it has relatively small quantities of coking coal, which is used in steelmaking. There are also scattered deposits of anthracite, a higher-value type of energy coal.
Latest data from the department of mineral resources shows SA ranks fourth-largest in the world in its coal reserves of 30,4bn t but seventh-largest in production, at 250,6Mt in 2009. At current rates of extraction, SA has about 40-50 years of coal supplies.
Hall told last month’s SA National Energy Association (Sanea) conference that the last authoritative estimate of SA’s recoverable coal resources was carried out in 1982, suggesting the country had 59,2bnt . In 2009 the figure was adjusted for depletion to an estimate of 33,1bnt. The Council for Geosciences is updating these figures and is expected to release its report in January.
SA’s coal sales rose a modest 8,7% over the 10 years to 2009 but most of the increased output went to Eskom. Coal exports were almost flat in that period, peaking at 71,5Mt in 2003 but falling as low as 57,8Mt in 2008, the year when the average benchmark export coal price soared to R737/t from R361/t in 2007. In that year average inland prices for coal were R153/t, from R108/t in 2007. Domestic coal prices are generally below exports, mainly because Eskom, the biggest customer, uses a lower quality.
About 84% of SA’s coal comes from the Witbank, Ermelo and Highveld coal fields, which will be largely exhausted within the next 10 years. While the Waterberg has substantial resources of coal — about 40% of the country’s remaining resources — it presents geological challenges which are likely to make mining more expensive. Lack of rail infrastructure and minimal water will also have to be addressed.
The country’s biggest coal producers are Anglo American Coal, Exxaro, Sasol Mining, Xstrata Coal and BHP Billiton Export Coal SA (Becsa). Other large producers include Total Coal, Optimum and Shanduka. There are also numerous smaller miners with one or two mines or projects in development. Among the five biggest producers, only three have major new projects which will supply both Eskom and export markets: Anglo American’s US$512m Zibulo mine in Mpumalanga; Exxaro’s R9bn Grootegeluk expansion in the Waterberg; and the Xstrata/African Rainbow Minerals R3,5bn joint-venture Goedgevonden mine near Witbank.
When Becsa, Exxaro, Anglo Coal and Rio Tinto recently put up for sale some of their undeveloped coal prospects, it was widely seen as a vote of no confidence in long-term growth prospects for the SA coal industry.
This is surprising, considering strong demand from India and China for SA coal and Eskom’s heavy reliance on coal- fired power stations. The utility has even expressed a desire to protect its long- term supply. The only sector of the coal industry that is showing an appetite for new projects is the junior miners, which have more appetite for risk.
Some pressures affecting investment in coal are global: fluctuations in prices, changes in SA’s target markets from Europe to Asia, and environmental pressures against burning fossil fuels. Others are shared by SA’s entire mining industry: talk of nationalisation, delays and complexities in securing mining licences and, since the global economic crisis started, limited access to financing for new projects.
Exxaro chairman Len Konar says in the group’s latest annual report that in the 16 years to 2009 SA’s mining sector actually shrank, while the global average growth in mining was 5%. He ascribes this to outside factors like the volatile rand-dollar exchange rate and the recession. He says other issues affecting the local industry are being addressed, such as infrastructural challenges, bureaucratic delays, regulatory uncertainty, the balance between productivity and cost, and the limited pool of skills .
In his medium-term budget policy statement last week, finance minister Pravin Gordhan conceded SA had lagged behind other countries, like Brazil and Australia, in growth in mining production in the past eight years. He identified six main factors: regulatory uncertainty, logistical challenges, limited electricity generation capacity, currency volatility, the debate on nationalisation and the risks of deep-level gold mining .
To this, says Frans Barker of the Chamber of Mines, should be added the high cost of services provided by parastatals, like electricity, transport and potentially water. Xavier Prevost of XMP Consulting adds that talk of nationalisation is another big issue.
“The department of mineral resources said recently it didn’t think this was deterring investment. When you talk to investors from other countries, the first question they ask is whether SA is going to nationalise the mines. Until government makes a decision on it, no-one is going to invest in mines in SA.”
The logistical problem of rail and port bottlenecks is cited repeatedly by participants in the coal industry.
Prevost says SA’s problems are not impossible to overcome but that the country is not tackling them properly.
“Certainly, the coal industry is responsible for some of them. Transnet’s inability to provide enough rail capacity to move coal from mines to ports and local users has been one of the main issues preventing many mine projects from becoming feasible .
“Mines are prepared to invest in rail, but Transnet isn’t implementing talk into action. Transnet has been discussing expansion for a long time, but nothing happens,” he says.
Slides presented by Transnet CEO Brian Molefe at the recent Coaltrans conference in Madrid showed five coal export corridors in SA: Richards Bay Coal Terminal (RBCT) , Richards Bay Navitrade Terminal and Matola (the coal terminal at Maputo) for thermal coal, while Maputo main port and Durban Bulk Connections also handle sized coal. That gives total port capacity of 99,5Mt/year against rail capacity of 75,4Mt/year .
Molefe said Transnet’s target was to build up coal freight capacity to 81Mt/year by 2014/2015.
But why isn’t Transnet targeting at least 100Mt/year, if that’s what the ports can handle? There are two main reasons: the parastatal’s own lack of funding and, possibly more important, Transnet’s belief that the coal industry cannot produce as much as it claims it will.
With changing patterns of global economic growth, the focus of SA’s coal exports has moved from its traditional European market to Asia. Indian and Chinese buyers have been actively seeking to secure coal offtake from SA in the past couple of years.
The Financial Times reported on October 17 that the European Union’s “Energy Roadmap to 2050”, being prepared for release by the end of this year, suggests European consumers’ costs of energy would double by 2050 as wind power, requiring more infrastructure, would contribute more to the energy mix than nuclear and coal. Coal and gas currently provide about half of the EU’s electricity.
The International Energy Agency’s World Energy Outlook suggests OECD countries’ coal-fired power generation will fall up to 2035 as they move away from fossil fuels, but this will be more than offset by rising demand from developing countries. China’s 600 gigawatts (GW) of new coal-fired electricity capacity exceeds the current capacity of the US, EU and Japan.
According to statistics that Lars Schernikau of coal traders HMS Bergbau presented at the recent Coaltrans Madrid conference, India’s demand for steam coal is expected to rise to 1bn t by 2017 as domestic production cannot meet the country’s needs. He says it is difficult to predict China’s production and imports but its impact on the global thermal coal market is likely to be “huge”.
Yet the 2009/2010 department of mineral resources report forecasts that SA’s coal exports will increase only “slightly” this year. It says though demand from developed countries is expected to remain weak until clean coal technology is widely used, demand from Asia could push up prices.
Are changes in markets and fluctuating prices deterring investment in SA coal mines? Not as much as generally believed, Prevost says.
“Back in 2006/2007 SA was exporting 88% of its coal to Europe but, because it was unable to meet that demand, we lost ground, and now Colombia, which is further away, is supplying more coal to Europe than we are.
“Our main market is now Asia, but the Indians and Chinese buyers are very price-sensitive. When the price was $122/t, demand from Asia fell. Now the price is $110/t-$112/t and no-one is buying , which is why RBCT is not moving the tonnages that Transnet is delivering to the port.”
But that’s no reason for Transnet to slow down rail expansion, Prevost says.
“The general view in the market is that coal is the fuel of the future. Germany is replacing its nuclear power stations with coal-fired power stations using clean coal technology. Demand for coal will be good for 20 years or more. Clean coal technology will not remove all emissions but it will reduce them to negligible levels.”
Greenpeace SA doesn’t agree. “The assessments made by the Business Enterprises unit at the University of Pretoria show that ‘clean coal’ simply does not exist,” Greenpeace says in its report.
Hall told the Sanea conference that coal accounted for almost a third of the world’s primary energy in 2010, its highest share since 1970. The main reason is rapid demand from industrialising populations in the developing economies of China and India. The populations of the world’s cities will rise to 5,2bn by 2035 from 3,3bn at present, pushing up demand for energy and steel.
The SA Coal Road Map is to present 30-year scenarios for the industry, open these options for comment, and then move into its second phase, identifying a preferred scenario and ways to achieve this scenario.
The Fossil Fuel Foundation didn’t want to disclose its findings ahead of the general release. But Hall’s comments at the Sanea conference suggest the road map presents three scenarios.
The first assumes significant exploitation of SA’s coal resources, if government’s plans for 10GW from nuclear power stations and its renewable targets encounter capital constraints and delays. That would mean building more coal- fired power stations and developing the resources in the Waterberg, Soutpansberg and Limpopo basins, with associated rail infrastructure.
The second possibility is “moderate” use of SA’s coal, if government achieves its targets and SA fulfils its carbon emission-reduction promises. That would still see some development of rail infrastructure in the Waterberg, but slowly. Coal exports would rise until 2020, but only gradually, if at all, after that.
The third scenario is that the country’s future energy and that of the rest of the world would be sourced mainly from non fossil fuel sources, which means no new coal-fired power stations would be built and coal exports would decline.
If clean coal technology can be made to work successfully, SA should not ignore a major resource that can generate cheap electricity for economic development and continue to provide a large number of jobs.
Though there are environmental reservations about coal mining, the reality is that if SA doesn’t exploit its coal reserves, its own needs and those of the coal-hungry markets of Asia will be sourced from elsewhere.
(sourced Financial Mail)
Sunday, October 30, 2011
Now Coal Industry turn on Outsourcing services
October30, 2011
Delhi: Now outsource coal industry monitoring services to India.
The firm Lee Explorer Infosys is an India based outsourcing company is providing coal industry monitoring services. The team is experienced in online data monitoring and experts and individuals are well English spoken guys, supported 24 hours services.
The firm Lee Explorer Infosys is an India based outsourcing company is providing coal industry monitoring services. The team is experienced in online data monitoring and experts and individuals are well English spoken guys, supported 24 hours services.
About Lee Explorer Infosys (LEI)
The principal objective of Lee Explorer Infosys are;
* Outsourcing Company deals in International Coal Policy, Coal Resources,investment opportunity in coal assets, coal demand and supply position, coal prices, physical and spot prices,coal price negotiation for contract, coal news, coal production, coal consumption, coal shortage, coal blocks, coal mines, coal to liquid technology,acquire coal assest.
* Company's team monitors coal industry and updates clients with all
available informations.
* LEI's informations suggest client (country's energy departments, coal investors, coal traders, coal policy makers,power plants, steel plants, industrial coal consumers) to help in make up there mind to take right decision on right time.
* LEI's team saves energy, time and money and give full returs on investment
* To operate an innovative, efficient, effective, competitive services in World wide Coal industry.
Company Vision:
To be the trusted provider of services that protect client's interest.
Who are Lee Explorer Infosys:
An industry owned, workplace focussed organisation providing best practice
occupational coal investment and return.
Contact Details:
Corporate Office
Lee Explorer Infosys
Tel :+91294-2430499
Mobile:+919460352419
Fax :+91294 2430499
B-1 Haridasji ki Magri,
The Oberoi Udai Vilas Road
Udaipur-313001 (Rajasthan) India
E-mail: Leinfosys@gmail.com
Las2010@gmail.com
* Outsourcing Company deals in International Coal Policy, Coal Resources,investment opportunity in coal assets, coal demand and supply position, coal prices, physical and spot prices,coal price negotiation for contract, coal news, coal production, coal consumption, coal shortage, coal blocks, coal mines, coal to liquid technology,acquire coal assest.
* Company's team monitors coal industry and updates clients with all
available informations.
* LEI's informations suggest client (country's energy departments, coal investors, coal traders, coal policy makers,power plants, steel plants, industrial coal consumers) to help in make up there mind to take right decision on right time.
* LEI's team saves energy, time and money and give full returs on investment
* To operate an innovative, efficient, effective, competitive services in World wide Coal industry.
Company Vision:
To be the trusted provider of services that protect client's interest.
Who are Lee Explorer Infosys:
An industry owned, workplace focussed organisation providing best practice
occupational coal investment and return.
Contact Details:
Corporate Office
Lee Explorer Infosys
Tel :+91294-2430499
Mobile:+919460352419
Fax :+91294 2430499
B-1 Haridasji ki Magri,
The Oberoi Udai Vilas Road
Udaipur-313001 (Rajasthan) India
E-mail: Leinfosys@gmail.com
Las2010@gmail.com
Saturday, October 8, 2011
The Coal Association of Canada
Headquartered in Calgary, Alberta, The Coal Association of Canada represents companies engaged in the exploration, development, use and transportation of coal. Its members include major coal producers and coal-using utilities, the railroads and ports that ship coal, industry suppliers of goods and services, and municipalities that have an interest in furthering the objectives of the Coal Association.
The Coal Association of Canada provides a forum to discuss and coordinate the views of its members on matters of common interest. It provides a respected voice which enhances the viability of the industry by advocating the clean use of coal through technology development. The Association's "Coal Core" program of Communications, Outreach and Education is instructive in helping stakeholders learn about the use of coal in the 21st century.
1 Browse Membership Directory
2 Complete List of Members
sourced : The Coal Association of Canada
The Coal Association of Canada provides a forum to discuss and coordinate the views of its members on matters of common interest. It provides a respected voice which enhances the viability of the industry by advocating the clean use of coal through technology development. The Association's "Coal Core" program of Communications, Outreach and Education is instructive in helping stakeholders learn about the use of coal in the 21st century.
1 Browse Membership Directory
2 Complete List of Members
sourced : The Coal Association of Canada
Friday, August 26, 2011
China's Shaanxi Coal Industry plans $2.7 billion IPO
Fri Aug 26, 2011
SHANGHAI (Reuters) - Shaanxi Coal Industry plans an initial public offering in Shanghai to raise up to 17.3 billion yuan ($2.7 billion) in what could be China's biggest IPO this year.
The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.
Shaanxi Coal would issue up to 2 billion shares in the offering, according to a draft prospectus posted on the CSRC website.
A successful IPO would make the company the country's third-largest publicly traded coal miner by output after China Shenhua Energy Co Ltd (1088.HK)(601088.SS) and China Coal Energy Co Ltd (1898.HK)(601898.SS), Shaanxi Coal said, adding that the proceeds would fund mining activity and replenish working capital.
It would also be the biggest IPO in the mainland market this year, surpassing Sinohydro Group Ltd's planned $2.5 billion offering.
China's IPO market slowed by a fifth in the first half, lacking the big deals of the year before, with fundraising dominated by smaller companies.
In the first six months, only about a tenth of the companies seeking listings chose to do so on the Shanghai Stock Exchange, with the rest going to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market, Thomson Reuters data showed.
State-owned Shaanxi Coal and Chemical Industry Group Co Ltd SHAANB.UL owns 71 percent of Shaanxi Coal.
China is the world's biggest coal-producing country, with output at 3 billion tonnes in 2009, accounting for about 46 percent of total global production that year.
Shaanxi Coal is headquartered in Xi'an, in the northern Chinese province of Shaanxi, which had known coal reserves of about 170 billion tonnes, the company said.
CICC, BOC International (China) Ltd and Citic Securities are joint underwriters of the IPO.
($1 = 6.390 yuan) (sourced Reuters)
SHANGHAI (Reuters) - Shaanxi Coal Industry plans an initial public offering in Shanghai to raise up to 17.3 billion yuan ($2.7 billion) in what could be China's biggest IPO this year.
The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.
Shaanxi Coal would issue up to 2 billion shares in the offering, according to a draft prospectus posted on the CSRC website.
A successful IPO would make the company the country's third-largest publicly traded coal miner by output after China Shenhua Energy Co Ltd (1088.HK)(601088.SS) and China Coal Energy Co Ltd (1898.HK)(601898.SS), Shaanxi Coal said, adding that the proceeds would fund mining activity and replenish working capital.
It would also be the biggest IPO in the mainland market this year, surpassing Sinohydro Group Ltd's planned $2.5 billion offering.
China's IPO market slowed by a fifth in the first half, lacking the big deals of the year before, with fundraising dominated by smaller companies.
In the first six months, only about a tenth of the companies seeking listings chose to do so on the Shanghai Stock Exchange, with the rest going to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market, Thomson Reuters data showed.
State-owned Shaanxi Coal and Chemical Industry Group Co Ltd SHAANB.UL owns 71 percent of Shaanxi Coal.
China is the world's biggest coal-producing country, with output at 3 billion tonnes in 2009, accounting for about 46 percent of total global production that year.
Shaanxi Coal is headquartered in Xi'an, in the northern Chinese province of Shaanxi, which had known coal reserves of about 170 billion tonnes, the company said.
CICC, BOC International (China) Ltd and Citic Securities are joint underwriters of the IPO.
($1 = 6.390 yuan) (sourced Reuters)
Friday, August 5, 2011
Ukraine mining accident possibly caused by poor engineering: government
KIEV, August 5 (Xinhua) -- A mining accident that killed one worker and injured at least 25 others in eastern Ukraine was possibly caused by poor engineering and a lack of discipline, the Ministry of Energy and Coal Industry said Friday.
A poor engineering design caused an unstable pattern of ventilation inside the Krasnokutska mine in Lugansk region, which led to Thursday's methane gas explosion, the ministry said in a statement.
Discipline at the mine was disordered, and an emergency evacuation of workers could not be properly conducted, it added.
The director of the mine was suspended by Fuel and Energy Minister Yury Boiko until the end of the investigation. The deputy chief safety engineer was dismissed.
Thursday's blast was the third mining accident in Ukraine in less than a week. Last Friday, a blast at a mine in Lugansk region killed 27 people. On the same day, 11 miners were killed in another accident in the Donetsk region.
(sourced Xinhua)
A poor engineering design caused an unstable pattern of ventilation inside the Krasnokutska mine in Lugansk region, which led to Thursday's methane gas explosion, the ministry said in a statement.
Discipline at the mine was disordered, and an emergency evacuation of workers could not be properly conducted, it added.
The director of the mine was suspended by Fuel and Energy Minister Yury Boiko until the end of the investigation. The deputy chief safety engineer was dismissed.
Thursday's blast was the third mining accident in Ukraine in less than a week. Last Friday, a blast at a mine in Lugansk region killed 27 people. On the same day, 11 miners were killed in another accident in the Donetsk region.
(sourced Xinhua)
Sunday, February 13, 2011
Russian coal exports to China could double
Feb12, 2011
Russia plans to clinch an intergovernmental agreement with China concerning coal, Russian exports of which to that country could well rise to 20 million tonnes annually from 10 million tonnes last year, Interfax citing Mr Sergei Shmatko Russian Energy Minister as saying.
China is one of the world biggest coal-producers with annual output of roughly 3 billion tonnes. Russia produced a reported little over 320 million tonnes in 2010 exporting about 115 million tonnes.
Mr Georgy Krasnyansky, head of the World Mining Congress Russian organizing committee, said according to figures presented at a Jan meeting of Russia Federation Council on the coal industry, global coal consumption is about 7 billion tonnes and could rise by more than 3 billion tonnes by 2030.
China is expected to meet much of that increased need around 2.4 billion tonnes.
He said that exports of coal from Russia to China are limited by insufficiently developed infrastructure.
(sourced:en.sxcoal.com)
Russia plans to clinch an intergovernmental agreement with China concerning coal, Russian exports of which to that country could well rise to 20 million tonnes annually from 10 million tonnes last year, Interfax citing Mr Sergei Shmatko Russian Energy Minister as saying.
China is one of the world biggest coal-producers with annual output of roughly 3 billion tonnes. Russia produced a reported little over 320 million tonnes in 2010 exporting about 115 million tonnes.
Mr Georgy Krasnyansky, head of the World Mining Congress Russian organizing committee, said according to figures presented at a Jan meeting of Russia Federation Council on the coal industry, global coal consumption is about 7 billion tonnes and could rise by more than 3 billion tonnes by 2030.
China is expected to meet much of that increased need around 2.4 billion tonnes.
He said that exports of coal from Russia to China are limited by insufficiently developed infrastructure.
(sourced:en.sxcoal.com)
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