14 minute read
Global
australian banks defend coal exit
Australia’s banks have defended their decision to exit the thermal coal sector and pushed back against suggestions from government lawmakers that they be forced to extend financing to fossil fuels.
Advertisement
Senior executives from Australia’s big four banks and the head of the country’s banking association told a parliamentary hearing on July 27 that current skyhigh coal prices are masking “significant” mediumterm uncertainty and risks posed by the sector.
Australia is the world’s largest coal exporter by value, and coal miners are expected to post bumper profits during the full-year reporting season for listed companies in August.
Australia has 26.2mn t/yr of new coal mining capacity committed for construction or under construction, with a further 399mn t/yr having been proven feasible but not yet approved and 102mn t/yr publicly announced, according to the Australian government's commodity forecaster.
Around 150mn t/yr of the projects not committed but with proven feasibility are thermal coal project in the inland Galilee basin region of Queensland and are dependent on accessing infrastructure to export coal from mines to the coast, which is up to 450km away. Most of the proponents are waiting to see how successful Adani is in developing the Carmichael mine before committing to their projects.
The remaining feasible projects are thermal coal projects with some having semi-soft coking coal by-products, across NSW and Queensland. Some of these projects are being held up by government approvals or by problems securing funding, as financial institutions remove services from the sector.
Firmer thermal and metallurgical coal prices have prompted some of the smaller developers to push forward with plans that were put on hold last year during the Covid-19 lockdowns, while others are waiting to see how sustainable the current price environment is.
australia's Stanmore gets approval to develop Queensland coal project
Australian coal producer Stanmore Resources (SMR. AX) said it received permits for mining leases from the Queensland state government to start work on its Isaac Downs project.
The government issued leases for the project even as Australia's coal industry faced dwindling support and access to finance due to increasing pressure on their backers to break away from fossil fuels.
Australia, the top coal exporter in the world, remains a laggard in climate change commitments, so far refusing to commit to a target for net zero emissions by 2050, citing the risk of hurting the economy.
The Brisbane-based miner said it would spend A$47 million ($34.62 million) on project development, with total estimated costs of nearly A$82 million including civil construction work.
Indonesian Coal industry expects further market improvement in Q3
Indonesian coal miners expect their financial performance to improve in the third quarter of this year, projecting that the upward trend in global coal prices will continue.
Indonesian Coal Mining Association (APBI) executive director HendraSinadia said growing demand for coal would come both from export markets and domestic industries as economic activity was recovering.
“The [coal] price will still be good in the third quarter, which means the profitability of our coal mining companies is expected to be much higher,” he told The Jakarta Post.
With regard to exports, Hendra added that the increase in the purchasing managers’ index (PMI) from coal-importing countries, such as China and Japan, pointed to a surge in energy demand for rising manufacturing activity.
Indonesian coal producers upbeat despite Covid-19
The Indonesian coal mining sector is upbeat on its prospects, despite Covid-19 cases reaching producing areas in east Kalimantan province and consumers' concerns the outbreak could curb output at a time when prices are near historical highs because of weather-related supply disruptions.
The Indonesian coal mining association (APBI) said that its members already developed action plans last year in the event that Covid-19 cases reach coalproducing areas. These include strict and frequent temperature checks and offsite quarantine facilities for workers that are suspected to have contracted the virus.
Coal producers want operations to remain unhampered as they start increasing production for the latter half of the year to take advantage of higher coal prices. Indonesia's energy ministry (ESDM) said that it has received proposals from over 100 companies requesting revisions of their work plan and budget for the year, which it is processing.
Indonesia produced 292.87mn t of coal in the first half, according to ESDM data, or 47pc of the 2021 government-set output target of 625mn t. The government is targeting exports of 487.5mn t this year.
Indonesia to make biomass cofiring mandatory in power plants
Indonesia plans to make the co-firing of biomass in power stations mandatory as part of its efforts to phase out coal power plants, which account for more than 60% of its electricity supplies, an energy ministry director said.
The Southeast Asian country is the world's biggest thermal coal exporter and relies heavily the fuel domestically, but authorities have pledged to start phasing out coal under climate change commitments.
The Indonesian government is preparing a regulation to implement the mandatory co-firing, which would apply to state electricity utility PT Perusahaan Listrik Negara (PLN) as well as independent power producers.
U.S. coal gets boost from higher gas prices
Rising gas prices are encouraging U.S. electricity generators to raise output from coal-fired units slightly this summer, providing a temporary reprieve for the beleaguered coal mining sector.
U.S. coal production, which was already in long-term decline, slumped during the first wave of coronavi-
rus infections and lockdowns, but has been trending upward since the middle of last year as the economy has recovered.
Mine output averaged 11.7 million short tons per week over the five weeks ending on July 17, up from 9.3 million tons at the same point a year ago, though still down from 13.1 million tons in 2019.
Production is around 18% below the pre-pandemic five-year average, but that is an improvement on a deficit of 40% at the end of May last year, according to estimates prepared by the U.S. Energy Information Administration (EIA).
As a result, EIA forecasts coal consumption will rise to 60-63 million short tons per month in July and August this year, up 53-54 million short tons per month at the same point last year.
weekly US coal train loadings average 81.3 trains/day, up 9.8 trains/day on week: STB
Weekly US coal train loadings averaged 81.3 trains/ day in the week ended July 16, up 9.8 trains/day from the previous week and up 16.8 trains/day from the year-ago week, Surface Transportation Board data showed July 23.
In the Illinois Basin, loadings averaged 4.1 trains/day, down 1 train/day from the previous week and flat from the year-ago week.
Northern Appalachian loadings jumped 5.6 trains/day from the week before to 8.6 trains/day. Year on year, they rose 2.1 trains/day.
Average loadings in the Central Appalachian basin were 12.3 trains/day, up 2.9 trains/day from the previous week and up 1.2 trains/day from the year-ago week.
In other basins, loadings averaged 6.7 trains/day, up 0.2 train/day week on week and up 2.2 trains/day from the year-ago week.
EIa says U.S. 2020 coal output lowest since 1965
The Energy Information Administration (EIA) said U.S. coal production fell in 2020 to its lowest level since 1965 due to low global demand in the wake of the coronavirus pandemic.
The EIA said the pandemic slowed global demand for coal, and some U.S. mines were idled for extended periods to slow the spread of the virus among workers, with exports declining significantly in April 2020. U.S. coal-fired generation fell 20% year-on-year and exports were 26% lower in 2020 than in 2019.
Coal production in Wyoming, where more coal is produced than in any other state, was 21% lower in 2020 than it was in 2019, while the second-largest producer West Virginia saw an annual slide of 28%, the agency said.
Coal had been the primary fuel for U.S. power plants for much of the last century, but its use has been declining since peaking in 2007.
US 2021 coal production estimates to rise 14.5% on year: EIa
The US is estimated to produce 617.3 million st of coal in 2021, the US Energy Information Administration said in a July 7 report, raising its monthly estimate by roughly 17 million st, or 2.9%, from June to its highest projection for the year.
The 2021 production would also be 14.5% higher than the 55-year low 539.1 million st produced in 2020, while the 2022 production estimate rose 0.9% on the month to 610.4 million st, EIA said in its July Short-Term Energy Outlook.
Total consumption, including by petcoke plants and retail, is estimated at 569 million st in 2021 and 536.8 million st in 2022, up from 477.3 million st in 2020. Coal exports are projected to climb to 83.8 million st in 2021, up from the four-year low of 69.1 million st in 2020. Exports are expected to increase again in 2022 to 99.1 million st.
Thermal coal export volumes are estimated at 36.9 million st in 2021 and 41.7 million st in 2022, up from 27 million st in 2020. The EIA said it assumes the “seaborne steam coal market in 2021 will be more robust with higher demand for US coal.”
The remaining 46.9 million st in 2021 are expected to be metallurgical coal exports, while 2022 exports are projected at 57.4 million st. In 2020, the US exported roughly 42.1 million st of met coal.
Cabinet approves pact with Russia on cooperation for coking coal
The Union Cabinet has approved a pact between India and Russia regarding cooperation on coking
coal, a key steel making raw material, for which domestic players remain dependent on imports from a select group of countries. Around 85 per cent of India's coking coal demand is met through imports.
The cooperation with Russia will help India reduce its dependence on far-located countries like Australia, South Africa, Canada and the US for sourcing of coking coal. It will also reduce per-tonne cost of steel production, as Russia is geographically closer compared to the said countries.
The objective of the MoU is to strengthen cooperation between India and Russia in the steel sector. The activities involved in the cooperation are aimed at diversifying the source of coking coal, it said.
The pact shall benefit the entire steel sector by reducing input cost and cost of steel production in the country. It will also provide an institutional mechanism for co-operation in the coking coal sector between India and Russia, the statement said.
China’s June coal imports soar to highest so far in 2021
China’s coal imports in June rose 35% from a month earlier to their highest level in 2021, driven by robust demand from power generation and industrial activity in the country.
China brought in 28.39 million tonnes of the fossil fuel last month, up from 21.04 million tonnes in May, and 12.3% higher compared to June of 2020.
For the first six months this year, China imported a total of 139.56 million tonnes of coal, down 19.7% year-on-year, data from the General Administration of Customs showed.
Several regions in southern China, including Guangdong and Yunnan, ordered factories to stagger operations amid tighter power supply conditions in the second quarter.
Coal fired-power plants are building up inventory as peak summer season kicks off in the country. The Chinese state planner has also been urging power plants, coal miners and transportation hubs to build around 100 million tonnes of deployable coal reserves by the year end.
China will release more than 10 million tonnes of coal from state reserves to ensure steady supply to the market, the state planner said in a statement.
The fifth such release this year will come from dozens of reserve hubs and key ports nationwide, the National Development and Reform Commission said, adding that the government would arrange further releases in line with market demand.
The state planner in April urged power plants, coal miners and major coal transport hubs to boost reserves of the fuel because of concerns over tight supplies and an expected demand surge.
China also increased coal imports in June to the highest level so far this year.
Power loads in several eastern and southern regions, including the business hub of Shanghai, hit historic highs this week as hot weather boosted use of airconditioning and analysts expect that average coal inventories at six coal-fired power plants in eastern China have fallen to less than 15 days worth of consumption.
africa's top emitter seeks $10 bln for shift from coal
South African state power utility Eskom, Africa's biggest greenhouse gas emitter, is pitching a $10 billion plan to global lenders that would see it shut the vast majority of its coal-fired plants by 2050 and embrace renewable energy.
Discussions have already started with development finance institutions like the World Bank and the African Development Bank.
“South Africa can offer you the biggest point source of carbon emissions reduction in the world," said Mandy Rambharos, general manager at Eskom's Just Energy Transition office.
Eskom, which generates more than 90% of the country's electricity chiefly by burning coal, is looking for around $7 to $8 for every tonne of carbon dioxide equivalent it cuts from its greenhouse gas emissions. Eskom currently emits around 213 million tonnes of CO2 equivalent a year.
China’s banks going cool on coal power plants in africa
Coal developers in Africa may be forced to find alternative sources of financing or shift into solar and
hydro, as Chinese lenders gradually shy away from plants powered by the fossil fuel, according to observers.
Coal projects worth more than US$20 billion in Africa have either been shelved or cancelled in recent years as environmental activists have piled pressure on lenders. The number could be much higher if distressed projects are added, according to data compiled by the Green Belt and
Road Initiative Centre (Green BRI Centre) at the International Institute of Green Finance.
The latest casualty is a US$3 billion coal-fired power plant in Zimbabwe, which China’s biggest bank, Industrial and Commercial Bank of China, reportedly said it would not fund after pressure from green groups.
Yun Sun, director of the China programme at the Stimson Centre in Washington, said other than hydropower, China traditionally had not been a big player in renewable energy in Africa.
Sun said China was speeding up its green finance to belt and road projects in recent years,
There will be renewable energy projects and their number could even be increasing. But the traditional projects will play a bigger role for the foreseeable future.
80 per cent of planned coal power plants in India, four asian nations
Asian countries are responsible for 80 per cent of the world’s planned new coal-fired power plants, with India being the second-largest coal power producer with around 250 gigawatt (GW) of operating capacity and 60 GW in the pipeline.
This was revealed in the latest report ‘Do Not Revive Coal’ released by the financial think-tank Carbon Tracker. According to the report, China, India, Indonesia, Japan and Vietnam plan to build more than 600 new units with a combined capacity of over 300GW, ignoring calls from United Nations secretary general Antonio Guterres for all new coal plants to be cancelled.
Stating that around 80 per cent of the operating global coal fleet could be replaced with new renewables with an immediate cost saving, the report added, “By 2024, new renewables will be cheaper than coal in every major region, and by 2026 almost 100 per cent of global coal capacity will be more expensive to run
Spain joins campaign to phase out coal by 2030 as races to renewables
Spain joined an international campaign to set a date for closing all coal plants by 2030, signing up to a target it looks well-placed to beat by a wide margin.
The Powering Past Coal Alliance now counts 23 national governments among 133 members united by the desire to speed up the demise of coal-fired power generation and contribute to reining in planet-warming carbon emissions.
The United States and European Union pledged last month to develop green technologies but steered clear of setting a firm end-date for burning coal.
Spain's Energy and Environment Minister Teresa Ribera has long argued that coal will fade out as the costs of emissions permits climb and other sources become ever cheaper. A national climate plan submitted to Brussels last year foresees coal capacity dwindling to zero by 2030.
UK brings forward end to coal power target
Britain will bring forward its target to end the use of coal in electricity generation by a year to October 2024, the government said, as part of efforts to spur other nations to move more quickly to cut emissions before a climate summit.
Stopping the use of coal to generate electricity is a major step to limit the rise in global temperatures to 1.5 degrees Celsius above pre-industrial times, which scientists say would avoid the most devastating impacts of climate change.
In a bid to help meet its climate targets Britain has reduced its use of coal in the power sector to less than 2% of the electricity mix in 2020 compared with around 25% five years ago.
Since Britain completed its exit from the European Union last year, Prime Minister Boris Johnson hopes to build London's influence on the world stage by getting countries back on track to meet global climate targets at the United Nations' Climate Change Conference (COP26) in November.
