Global

Atlantic coking coal: Prices flat on supply limitations

US coking coal prices have held steady at the end of this week, supported by mining firms with limited inventories focusing on term sales and turning away buyers seeking discounts. The production cuts in the second quarter and mills looking to bring forward and even increase term deliveries have meant that few mining companies appear have ready spot availability for August and September. The Argus daily low-volatile price is flat today at $104/t fob Hampton Roads, as are the high-volatile A price, at $109.50/t fob Hampton Roads, and high-volatile B price, at $103.75/t fob Hampton Roads. Brazilian tenders for deliveries in the second half closed last week but results are not expected for a few weeks at least, participating mining and trading firms said. Colombian coking coal availability is rising again, with mining outfits starting to resume operations but none are willing to accept prices of below $100/t fob Colombia, a trading company said. Met coke offers from Colombia have risen to about $230/t fob Colombia on the back of improved demand from China, Brazil and Mexico, from $210-215/t fob at the start of the Covid-19 pandemic in Europe. "Most US producers would not be making money at current levels unless they are in the lowest-cost quartile. We see some producers further curtailing production this year," one US mining company said. "We have turned away a mill seeking a discount as we are largely booked out for this quarter, with possibly capacity to offer low-volatile."

US invests $118m to develop carbon neutral coal products

The US Government has announced investment totalling $118 million (£93m) to develop technologies to generate carbon-neutral electricity and hydrogen using coal. It will support Coal FIRST (Flexible, Innovative, Resilient, Small, Transformative) power plants that will convert coal, biomass and waste plastics to generate clean and affordable electricity and hydrogen. These plants will be capable of flexible operations to meet the needs of the grid, use innovative components that improve efficiency and reduce emission and will be small compared to the current conventional utility-scale coal-fired plants. Coal FIRST plants will incorporate carbon capture, utilisation and storage (CCUS) technologies and will be flexible to provide affordable electricity and hydrogen. Energy Secretary Dan Brouillette said: “Coal is one of our nation’s most abundant natural resources and has been providing well-paying jobs and powering the US for decades. “That’s why, as the global energy mix evolves, we’re investing in the next-generation of coal technologies that will lay the groundwork for clean, reliable 21st century coal-to-energy plants. The Trump Administration sees a bright future for the new, next stage of coal.”

Renewables output outpacing coal and nuclear in US

The fastest growing energy sources during this period were wind and solar, according to analysis by renewables advocacy group the Sun Day Campaign. Wind generated 11.1% more electricity (144.8GWh) than it did in the same period one year earlier , and accounted for 9.4% of the United States' total generation between January and May — up 1.4 percentage points from the first five months of 2019. According to Windpower Intelligence, the research and data division of Windpower Monthly, the US’ wind power fleet reached nearly 109.3GW by the end of May 2020 — an increase of 11.7% year on year. Meanwhile, solar generated 23.1% more electricity in the first five months of 2020 (50.6GWh) than it did in the same period one year earlier, and accounted for 3.3% of the US’ total electricity generation in this time — up half a percentage point from January-May 2019. Combined, renewable energy sources — also including hydropower, biomass and geothermal — generated 331.2GWh in the first five months of the year. This is more than both coal (258.9GWh, down 33.9% year on year) and nuclear (327.6GWh, down 1%).

South Africa reveals recovery plan for mining and energy sector

Government has tabled a recovery plan to restore business confidence, stimulate investments, safeguard and create jobs in the mining and energy sector. “The Mining and Energy Recovery Plan intends to restore and restructure the industry within the context of a renewed, sustainable minerals and energy complex, pivotal in the reindustrialization of the country, while transforming the mining and energy industry,” said tourism minister MmamolokoKubayi-Ngubane. LPG is the most efficient form of energy for cooking, space heating as well as water heating, yet its contribution is below par. We will set a target to double consumption of LPG in South Africa over the next five years. “This will alleviate pressure on the Eskom power supply. To ensure orderly development, all role players in the value chain will have to be registered with the department,” the minister said. The energy sector will work with the Department of Trade, Industry and Competition to localise the manufacturing of gas cylinders and appliances.

With regard to the mining sector, KubayiNgubane said mining sector’s economic recovery plan will focus on the implementation of the Small Scale Mining (SSM) Framework; forming partnerships with aligned departments and entities to leverage on their resources and experiences for maximum impact.

Demerger of mines is “quickest route” for Anglo American to exit South African thermal coal

ANGLO American has given itself two to three years to dispense with its South African thermal coal export mines. This is in line with a response to questions at a virtual annual general meeting this year in which the group also disclosed that the divestment would be partial; that is, through a demerger with the new company floated on the JSE. In reality, however, the intention is to get on which the job in a much shorter time-frame than three years. “Once you’ve made the decision, you’re better off getting on with it and the demerger route was the quickest route from our point of view,” said Mark Cutifani, CEO of Anglo American in an interview in June 19. According to Cutifani, one benefit of the demerger is that it cuts down on red tape compared to a trade sale. “You’re handing back a share, so shareholders can make their own decisions about what they want to do with that share. It’s got less government issues, and the government is pleased to see a local listing.” Cutifani is perhaps mindful of the route taken by South32, the Australian headquartered company which announced the sale of its South African coal assets in 2018, but has yet to complete the transaction. (It’ll be done by way of trade sale to Seriti Resources). Or the 12 months taken to sell his firm’s domestic assets, which was also to Seriti.

BHP sees limited met coal output rebound in 2020-21 on weak market outlook

Miner BHP sees potential for a slight recovery in met coal output amid weaker demand in global economies hit by the COVID-19 pandemic, even as China's steel output grows on the back of a fast recovery. Receive daily email alerts, subscriber notes & personalize your experience. BHP expects to produce up to 44 million mt of me coal in the 2020-21 financial year, after production fell 3% to 41 million mt in the year earlier period through June 30, 2020, the company said in an operations report released July 21. BHP expects met coal production over July 2020-June 2021 to be between 40 million and 44 million mt (71 million-77 million mt on a 100% operating basis). BHP operates and markets coal for several Queensland met coal mines, which it owns in separate joint ventures with Mitsubishi Corp. and Mitsui & Co. A slowdown in major importing regions of Europe, India and Northeast Asia have been a major influence on the met coal market as shipments fell, BHP said.

Grid emissions hit record low, as both coal output and prices plunge

Australia’s main electricity grid achieved a remarkable trifecta in the last three months: The level of greenhouse gas emissions fell to a record low in the June quarter, even as the level of both coal production and wholesale market prices plunged at the same time. Australians are often taught that coal is essential to the country’s prosperity, and the only source of cheap energy, and that cutting emissions doesn’t really achieve much. And besides, wind and solar are unreliable and don’t work. It’s nonsense of course, on all four fronts. And gradually, despite policy inertia and downright interference from the federal government, the energy transition marches on, and the Quarterly Energy Dynamics Report issued by the Australian Energy Market Operator has emerged as a

key reference point for the state and pace of the energy transition in Australia. There are several major – and many minor – takeaways from the latest report, issued on Wednesday. Top of the pile is the fall in emissions from the National Electricity Market (the grid encompassing NSW, Queensland, Victoria, Tasmania, the ACT and South Australia.

EU coal imports inch up from May's low

European coal imports inched up from April's three-decade low, but were still sharply down on the year in May. Net imports by EU 27 members fell by 3mn t on the year to 3.3mn t in May according to Eurostat data. This was up from net imports of 2.6mn t in April. Net imports into the bloc, excluding the UK, were 20.9mn t lower on the year in JanuaryMay, at 18.6mn t. The UK imported around 1.2mn t, down from 2.6mn t. Receipts in May were down on the year for the 15th consecutive month and the trend is likely to persist in the second half of the year. Net imports into the bloc averaged 5.8mn t/month in June-December 2019, but recent low prices and a soft demand outlook driven by weak power consumption and fierce competition from gas will probably keep imports below that level in 2020. Month-ahead average clean dark spreads for 46pc-efficient plants dropped to as low as minus €6.47/MWh in April and have remained negative since then, despite a gradual recovery. Base-load margins are positive for September onwards and the first-quarter 2021 clean dark spread was €6.36/MWh, which may drive a modest increase in coal burn in the third quarter.

Ukraine Plans to Close Coal Mines in Stagesseen at 435 million Tonnes - energy ministry

IUkrainian Energy Acting Minister Ms OlhaBuslavets said that Energy Ministry plans to close mines in stages. She said 'We are finalizing the methodology for assessing coal enterprises. The closure process should be phased. The order of priority of cities and regions most in need of the support program is being determined. We have analysed the social and economic situation in the regions subject to transformation. Approaches are being developed to diversify the local economy to create new jobs." the acting minister said. She noted that work is underway to reduce the dependence of local communities in such regions on the coal industry. According to her, all this is happening within the framework of the development of the National Program for Fair Transformation of Coal Regions. She said "The Energy Ministry has been entrusted with the task of developing a program for reforming the coal industry. A concept and a plan of measures for reforming the coal industry need to be approved. The concept is being developed and will be presented in the near future.” Also, according to her, there should be a plan for the transformation of coal regions until 2030.

Flood precautions may restrict Chinese coal output

A coal mine in southwest China's Sichuan province has flooded despite renewed calls by the authorities for stricter flood precaution measures during the peak rainy season. This is likely to trigger stricter mine inspections that may potentially slow any coal output increases to meet summer restocking needs. A coal mine in Sichuan's Dazhucounty was flooded yesterday morning. Although local authorities clarified that the flooding had caused no casualties, it came just days after China's national coal mine safety administration issued reminders to coal producers to take flood precautions during the nation's most serious flooding

season in over 30 years. This is expected to trigger stricter mine safety inspections, especially as heavy rains that have battered south China since early June are gradually moving north, where most of China's coal is produced. Floods in south China continue to disrupt economic activities in large swathes of the country, and authorities had to blow up a dam in the southern province of Anhui to relieve flood waters. Beijing warned that the water levels held by the Three Gorges dam along the Yangtze river have risen to near-maximum levels. The floods have claimed at least 140 lives and 38mn people are affected, with economic losses estimated at over $8bn.

Indonesia to mix coal-based DME, LPG as cooking gas to reduce imports

The government is looking to mix coal-based dimethyl ether (DME) and liquefied petroleum gas (LPG) as cooking gas in an effort to reduce Indonesia’s dependence on imported LPG. The country has long sought to replace the LPG with DME as a cooking fuel, but new official studies have revealed a key limitation with the plan. The studies found that, compared to LPG, burning DME was less pollutive but also much less hot, which meant the cooking time was up to 20 percent longer, Energy and Mineral Resources Ministry research and development head DadanKusdiana told reporters at a press briefing. Thus, mixing 80 percent LPG with 20 percent DME was the ideal ratio to maximize retail economics, he said, summarizing the studies that were carried out between 2017 and 2020. Switching to DME is among Indonesia’s many plans to cut consumption of LPG, a fuel the country has been heavily importing at the cost of widening its trade deficit, a key vulnerability for Southeast Asia’s largest economy. Oil and gas trade booked a deficit of US$3.55 billion during the January-June period this year, while non-oil and gas trade booked a surplus of $9.05 billion in the same period, Statistics Indonesia (BPS) data show.

Vietnam imports first U.S. coal shipment, state coal miner says

Vietnam has imported the first shipment of coal from the United States, state-owned coal miner Vinacomin said on Wednesday, days after the two nations marked the 25th anniversary since they established diplomatic relations. The 21,700 tonnes of coal bought from IMI Fuels LLC arrived at a port in northern Vietnam, Vinacomin, formally known as Vietnam National Coal-Mineral Industries Corp, said in a statement on its website. The Southeast Asian country, which has become more reliant on imported coals for power generation in recent years, said this week its imports of the fuel surged by more than 50% in the first half of 2020 from a year earlier to reach a record high. Most of the coal imported in the January-June period came from Indonesia and Australia. “The delivery of the first coal shipment will pave the way for more coal imports from the United States in the future,” Vinacomin said, saying the second batch was scheduled to arrive in September. Vietnam has been seeking to import more U.S. goods, including coal and liquefied natural gas (LNGO, to help narrow a trade gap after President Donald Trump threatened tariffs on its products amid the Chinese-U.S. trade war. Vietnam’s trade surplus with the United States, Vietnam’s largest export market, widened to $24.46 billion in the first half of this year from $20.58 billion a year earlier, according to Vietnam’s customs data.