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Coal production from mining’s top ten set to increase
Coal production from the top ten mining companies (Coal India, China Shenhua, Yanzhou Coal, Peabody, China National Coal, Glencore, Siberian Coal, PT Bumi, BHP and Arch Resources) fell from a collective 1,704Mt in 2019 to 1,633Mt in 2020, which is a 4.2% decline. The most significant declines were observed from Arch Resources (28.6%), PT Bumi (24.9%), Glencore (23.9%), and Peabody (21.8%), according to GlobalData, a leading data and analytics company. GlobalData expects production from the top ten companies to be between 1,683-1,740Mt in 2021, which is an increase of up to 6.6% compared with the collective output in 2020 (1,633Mt). Operating activities, backed by the rollout of vaccine and strict COVID-19 protocols on-site, returning to normal is expected to be a key production driver for companies in 2021. Peabody’s output dropped primarily due to the upgrade of the main line conveyor system at Shoal Creek, alongside pit sequencing work at Moorvale and a dragline outage at Coppabella while BHP’s coking coal production was impacted by planned maintenance at the Saraji and Caval Ridge mines, environmental disruptions at La Nina, and lower yields at the South Walker Creek and Poitrel mines.. In contrast, production from Coal India rose by 4% owing to a recovery in the offtake from India’s power sector, which was supported by a resumption in industrial and commercial activities
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China to cut coal use share below 56 per cent in 2021
China aims to cut its coal use to below 56 per cent of energy consumption in 2021, the National Energy Administration (NEA) said in a statement on Thursday, but said the fuel would still play a vital role in ensuring the nation's energy security. China, the world's biggest coal consumer, lowered the share of coal use in its primary energy mix to 56.8 per cent in 2020, from around 68 per cent at the beginning of the previous decade. The NEA also plans to raise electricity use to 28 per cent of end-use energy consumption in China, up from the 2020 goal of 27 per cent, the document said. The production target for crude oil is set at 196 million tonnes in 2021 and for natural gas at 202.5 billion cubic metres. Installed non-fossil fuel power capacity is aimed at around 1,100 gigawatts (GW). The NEA is seeking to raise its power generation from solar and wind plants to around 11 per cent of the country's total power consumption in 2021.
China is paying a high price for its unofficial ban on coal imports from Australia, with the cost of domestic and alternative foreign supplies rising for both thermal and coking grades of the fuel. China, the world's biggest importer, producer and consumer of coal, has effectively ended imports from Australia, the biggest shipper of coking coal used to make steel and number two in thermal coal used to produce electricity, as part of an ongoing political dispute between the two nations. The restrictions on imports from Australia came into effect in the second half of last year, resulting in China's imports dropping to virtually zero in the first two months of this year from a 2020 high of 9.46 million tonnes in June, according to Refinitiv vessel-tracking and port data. However, China's consumers of imported coal have been facing higher costs, with prices for alternatives to supplies from Australia, both local and foreign, rising as the market adjusts to the unofficial ban. In coking coal, the price of free-on-board Australian cargoes has been weakening since the ban was imposed, apart from the usual seasonal gain for the northern hemisphere winter. The Singapore Exchange contract for Australian coking coal ended at $113.71 a tonne on Thursday, down 18.8 per cent from the $140 that it reached at the start of October, just as the Chinese ban was coming into effect.
Indonesian coal-fired capacity to rise by 14-16GW: PLN
Coal is expected to remain the dominant power source in Indonesia's energy mix this decade, according to a report by state-controlled utility PLN, which expects 14-16GW of generation capacity to come on line by 2030. This will account for up to 36.6pc of proposed total capacity additions of 40.9GW, which also includes power plants being developed under the country's 35GW power generation project. The additional coal-fired capacity will be broken down into an expected 3.5GW of mine-mouth capacity and 12.5GW of non-mine-mouth capacity. The country is still dependent on coal for its baseload needs because of its availability and lower cost compared with other baseload fuel sources, PLN said. The company said coalfired plants accounted for 181GWh or 65pc of the country's total generation output in 2020. There are currently 237 coal-fired plants in the country with an installed boilerplate capacity of 34.61GW. Coal demand for power generation will increase significantly if power plant construction follows the targets set out in the PLN report. If all projects come on line on their targeted commercial operation dates, the power sector will need 140mn-170mn t of coal by 2030
South Korea ends aid for coal plants overseas
South Korea will stop funding coal-powered plants overseas, President Moon Jae-in told a US-led summit Thursday, as he vowed a larger role in fighting climate change. The progressive president said he was expanding a decision at home to phase out coal, the dirtiest form of energy. "Korea will end our public financing for overseas, coal-fired power plants," Moon told the summit convened by President Joe Biden. The event will engage the leaders to help shape the global, regional and local agenda in the energy sector including Power, Energy Transition, Oil & Gas, Renewables, Coal, Digital Transformation among others. "It is imperative for the world to slow down coalfired power plants, although developing countries that will struggle due to the heavy dependence on coal should be given due consideration and proper support," he said. Moon said that Asia's fourth largest economy was committed to going carbon neutral by 2050 and would "aim to enhance" its goals by 2030.
Renewable increase cuts Vietnam coal burn in 1Q
An increase in hydro and renewable output in Vietnam cut the country's coal burn on the year in the first quarter, despite an increase in overall power generation. Vietnam's coal burn declined by 12pc on the year to 29.8TWh in January-March — a 1.6mn t drop to 11.2mn t of NAR 5,700 kcal/kg-equivalent coal burn at 40pc efficiency — as exports to the country also fell. The country almost tripled its generation from renewables on the year in the first quarter to 7.8TWh, up from 2.8TWh a year earlier and 99GWh in the first quarter of 2019. Vietnam's increased renewables and hydro output meant that demand for coal reduced despite overall power generation increasing. The country's first-quarter power generation increased by 4pc on the year to 59.7TWh, up from 57.3TWh in 2020 and 53.9TWh in 2019. Thermal coal exports to Vietnam retreated to their lowest since August 2018 in January, down to 1.4mn t from 2.5mn t in 2020 and 1.9mn t in 2019. Indonesian exports for Vietnam halved on the year to 577,000t in January, while exports of Australian coal fell by a quarter to 588,000t. South African exports to Vietnam declined by three quarters to 55,000t, while exports of Russian coal fell by 38pc to 174,000 tn.
Glencore, China Huaneng sign deal to fit carbon capture to Australian coal plant
Mining and trading company Glencore and China Huaneng Group have signed a Memorandum of Understanding to cooperate on carbon capture utilization and storage, starting with a project at the 850-MW Millmerran coal-fired power station in Queensland, Australia, Glencore said April 12. The companies have committed to support deployment of low carbon emission technologies like CCUS to reduce greenhouse emissions from the use of fossil fuels and other industrial processes, it said. "This project is vitally important because it can scale up to support the reduction of Scope 3 emissions from the use of fossil fuels across a broad range of industrial sectors," Glencore CEO Ivan Glasenberg said. "This is the first integrated international carbon dioxide capture and storage project that China has participated in," said Li Weidong, Chairman of China Huaneng Group Clean Energy Research Institute. It would help build cross-industry cooperation in achieving "near zero emissions" from a coal plant, he said.
Australia’s Queensland coal exports hit four-year low
Shipments from the four largest coal export ports in Australia's Queensland state were at the lowest level in four years on an average daily basis in March, entirely because of a drop in shipments from the 85mn t/yrDalrymple Bay Coal Terminal (DBCT) to a four-year low last month. Total shipments last month rose from February when exports were at a two-year low in absolute terms but fell from March 2020 levels, according to monthly trade data by North Queensland Bulk Ports (NQBP) and the Gladstone Port Authority. Last month's coal exports averaged 506,900 t/d compared with 567,600 t/d in February and 542,700 t/d in March and was the lowest daily average for a monthly period since 267,500 t/d in April 2017 when shipments were disrupted by Cyclone Debbie and widespread flooding affected rail haulage from mines to ports. The drop in daily exports was largely because of a decline in shipments from Queensland's second-largest coal export terminal of Dalrymple Bay, which fell to the lowest monthly export volume since the 1mn t shipped in April 2017, according to NQBP data.
UK to cut emissions by more than three-quarters by 2035: reports
Britain will ramp up its commitment to cut carbon emissions ahead of hosting a UN climate summit this year, vowing a 78 percent reduction by 2035, reports said on Tuesday. Prime Minister Boris Johnson is set to unveil later this week the legally-binding target, which is 15 years earlier than once planned, the BBC reported. It said that for the first time the commitment will also cover emissions from international aviation and shipping, a long-standing demand of environmental activists. It comes ahead of the UK staging COP26, the United Nation's annual climate gathering, in Glasgow in November. On Thursday, Johnson will address a climate summit hosted by US President Joe Biden, as he attempts to make Britain a world leader on the issue in the run-up to November. The country has set a target of becoming carbon neutral by mid-century and has already ramped up its targets. The latest 78 percent target for the middle of the next decade was among the recommendations made last year by the UK government's independent advisory body, the Committee on Climate Change (CCC). It noted there would have to be more electric vehicles, an extension of offshore wind power generation, a reduction in meat and dairy consumption, and the planting of new woodland.
Anglo American spinning off thermal coal business
Anglo American (AAL) shareholders will vote on spinning off the miner’s thermal coal assets into a new listed company next month. The plan is to shift the mines, which produce coal that is burned at power stations, into the Johannesburg- and London-listed entity Thungela Resources. Each Anglo shareholder will get one Thungela share for every 10 shares they own. Three-quarters of shareholders voting at the annual meeting on 5 May need to back the demerger for it to go ahead. Anglo said the plan would allow Thungela to “attract new shareholders and to access new sources of capital as an independent company offering direct exposure to thermal coal”. Bernstein analyst Bob Brackett said the unit did not generate any free cash in 2019 or 2020 and would likely trade at a lower multiple than Anglo. London has few coal options, with South African company MC Mining (MCM) struggling at just
over a tenth of its valuation from a few years ago. Glencore (GLEN) offers the most exposure of the majors, although Anglo will still have thermal coal through its Cerrejon asset in Colombia, and mines in Australia. Meanwhile, South32 (S32) is handing South African company Seriti Resources $250m (£182m) to take its thermal coal assets, in a deal that will likely complete this quarter.
US thermal coal exports may tighten despite recent price rises: Platts Analytics
Downside potential for US thermal coal exports remains for 2021 despite recent rises in prices, S&P Global Platts Analytics warned April 5. The increase in US thermal coal prices, particularly those in the Central Appalachian basin, "is tied to the recovery of CIF Amsterdam-Rotterdam-Antwerp and other Atlantic coal basin prices," which have been pushed up by robust demand in Asia and widespread supply constraints, Platts Analytics said in its US Coal Market Forecast. However, this support may wane with a resurgence of South African coals moving to India in March, Platts Analytics said. Additionally, strong Panamax and Supramax freight rates will put downward pressure on prices. In the short term, price movements support the upside potential for US exports to Europe in the second quarter, Platts Analytics said. Although, any significant increase is unlikely given limited restocking in the ARA region despite an increase in coal burn expected. While ARA ports touched a five-year low of approximately 3.4 million mt in March, Platts Analytics does not expect a rush to restock given currently high FOB prices and freights rates, the International Thermal Coal Forecast said.
Colombia's mining sector is expected to recover 15 per cent in 2021, propelled by greater production of coal, gold and nickel and direct foreign investment, which is expected to almost triple to $2.7 billion, an industry association said on Tuesday. Colombia's mining industry declined around 26 per cent last year, its greatest contraction in history, after being battered by the coronavirus pandemic and a 91-day strike at coal mine Cerrejon, while foreign investment was cut almost in half to $902 million. As well as improving coal production and new projects, the recovery will also benefit from the restarting of infrastructure works and rising demand for luxury goods such as emeralds, the association said. The ACM has set a coal production target this year of 60 million tonnes, after output fell 40 per cent to 49.5 million tonnes last year, Narino said. The production target for gold has been set at 1.78 million troy ounces, up from 1.53 million troy ounces last year, the association said.
Poland to buy coal assets from utilities, create state energy company in 2022
Poland announced a plan late April 16 to separate coal assets from state-controlled utilities and transfer them to a state-owned National Energy Security Agency (NABE), freeing up power companies to access financing for future investments in natural gas and renewable energy. The state Treasury is to buy 70 coal units from three utilities, PGE, Enea and Tauron, and set up NABE next year, the Ministry of State Assets said in a statement. PGE's conventional arm, PGE GiEK, is to be in charge of integrating the assets into NABE. Once it has done so, PGE GiEK will operate under the name of NABE. The open pit mines associated with lignite-fired power stations would also be part of NABE, but no hard coal mining assets would be, the ministry said. Coal-fired cogeneration plants would remain with the utilities with a view to them being modernized towards low and zero-emission sources.
