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The World Bank awards $497 million to South Africa to move away from coal
The World Bank said that South Africa, a significant emitter of greenhouse gases and a country struggling with its energy transition, had been awarded $497 million to convert one of its old coal-fired power plants. The continent's leading industrial power, gets 80% of its electricity from coal, a pillar of the South African economy employing nearly 100,000 people. However, the country is plagued by continuous power cuts, with debt-laden state-owned Eskom unable to produce enough electricity with aging facilities that are on average 41 years old and poorly maintained. South Africa last year secured $8.5 billion in loans and grants from a group of rich countries to finance the transition to greener alternatives. According to the World Bank, the country needs at least $500 billion to achieve carbon neutrality by 2050.
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Countries like the US, the UK, Spain, and Canada lead the way in quitting coal
Countries leading the coal exit such as the US, UK, Germany, Spain, and Canada have often had access to relatively cheap alternatives. They are able to finance new energy infrastructure and support workers and communities in coaldependent regions. Coal-dependent countries like China, India, and Bangladesh also need to rapidly manage the growing energy demand. Transformation with regards to coal is not just about phasing out polluting sectors, it is also about creating new jobs, new industries, new skills, new investment, and the opportunity to create a more equal and resilient economy.
Canada strengthened support for closing all coal-fired power stations by 2030 by working closely with coal-dependent communities and providing integrated investment, infrastructure, training, and employment packages.
Researchers have reviewed the policies of nations working towards transitioning from coal and have provided guidance in this regard. Strong proactive and collaborative leadership Governments quitting coal in a rapid, just and orderly manner have commonly employed a proactive, collaborative, and well-coordinated mix of demand and supply-side policies.
South Africa is not ready to dump coal, says DlaminiZuma
NC NEC member and presidential hopeful NkosazanaDlaminiZuma took a jab at the Western countries and criticized them for bullying South Africa into dumping coal in favor of renewable energy. This comes after President Cyril Ramaphosa’s utterances in Egypt at the COP27 conference where the president said South Africa was planning on closing a number of aging coal-fired power stations as part of the country’s energy transition process.
Ramaphosa had also announced that a number of European countries would be investing sizeable amounts of money in the process. DlaminiZuma said it was ironic how some of these Western countries were pushing for South Africa to stop the use of coal in favor of renewable energy while their economies were built on the use of coal.
Zuma stressed the importance of using innovative cleaner ways of producing energy through coal. She said that they have coal power stations in Japan which are very clean, so the effort should be made towards technology like the Pebble Bed Modular Reactor that was used earlier but abandoned and taken by other countries.
South Africa must find technological solutions to lower carbon emissions
South Africa must find technological solutions that can maximize the usage of minerals such as coal with "minimal carbon" emissions, said Mineral Resources and Energy Deputy Minister, Dr. NobuhleNkabane.
The Deputy Minister emphasized that less developed countries need to make considered choices for their Just Energy Transitions. She added that if the situation is not handled properly by the countries of the South in general and Africa in particular, they risk aggravating energy poverty amongst economies and communities that have not benefitted from the previous energy transition that caused climate change.
The minister also stressed that South Africa remains committed to the Paris Agreement, an international climate change treaty. She said that they have submitted Nationally Determined Contributions that demonstrate a high ambition to partake in the global agenda to arrest climate change. Turning to the exploration of oil and gas, Nkabane said this remains a key area for South Africa, especially in the context of the current energy crisis in Europe.
Indonesia raises power sector’s 2023 coal requirements to 161.15 mil mt
The Indonesian government has requested thermal coal miners to supply 161.15 million mt to the country’s power producers in 2023.According to a letter to miners seen by S&P Global Commodity Insights. Indonesia’s ministry of energy and mineral resources prepared a list of 125 miners and each of their specific requirements ranged from volumes to coal grades and other areas. Industry sources said these projections were based on the discussions between the ministry, PLN, independent power producers, and miners, which will allow these stake-
The coal demand from the power sector was projected at 127 million mt for the year, at the beginning of 2022. PLN’s demand was initially projected at 64 million mt. however, the company requested for an additional 5.4 million mt and 2.2 million mt of thermal coal from the ministry in July and August, respectively. This marked a yearly increase in coal demand projection of 26.7% from Indonesia’s power sector.
Indonesia introduces methods to retire coal plants
Indonesia is looking at taking baby steps toward making the country’s net-zero emissions goal successful. The country introduced three schemes to axe coal-fired power plants early. As per the optimistic views of experts, stakeholders would be able to move forward with the plan despite the long-drawn process.
State-owned electricity monopoly PLN’s director of corporate planning and business development HartantoWibowo, introduced three options to retire coal-fired power plants earlier. PLN and state-owned coal miner PT Bukit Asam signed a principal framework agreement (PFA). The PFA, aimed to technically cut its operational life from 24 years to 15 years. The PFA would be followed by Bukit Asam’s acquisition of PLN’s PelabuhanRatu coal-fired power plant.
ElrikaHamdi, an energy economist with the Institute for Energy Economics and Financial Analysis (IEEFA), said challenges to implementing the deal would include the complex valuation process and the coal mining company’s financial condition.
China expands 2023 coal term contracts to all mines and aims at stabilizing market
In a bid to ensure market supply and stabilize prices, China has expanded long-term thermal coal supply contracts for 2023 to all coal mines and asked power utilities to source more of their demand through those contracts.
The world's second-biggest economy relies mainly on coal to generate 60% of its electricity Chinese President, Xi Jinping, has repeatedly emphasized the significant role of fuel. All coal mining firms, and coal-fired power, and heating plants will fall under long-term contracts, a document issued by the National Development and Reform Commission (NDRC). The expanded coverage aims at reducing coal supply in the spot market ensuring better supply to power utilities, and avoiding a repeat of a nationwide coal shortage that led to unprecedented power outages in 2021.
The state planner is maintaining the benchmark price for coal with an energy content of 5,500 kilocalories at 675 yuan ($92.76) a tonne for the 2023 term contract. Firms that failed to honor their contracts will have their support in new capacity approvals, rail transportation, and financing reduced.
Huanghua Port, China's largest port for coal transportation, inaugurated a foreign trade container route. The route will open up a low-cost and high-efficiency marine thoroughfare for clients in the hinterland and is expected to meet the transportation needs of foreign trade. The route will reduce the logistics cost, promote the growth of regional economic trade, and greatly enhance the capability of Huanghua Port.
Huanghua Port, located at Bohai Bay, realized a record high of 311 million tonnes of cargo
throughput last year and was among the world's top 20 ports regarding cargo throughput for five consecutive years. The port with a throughput of 100 million tonnes, is one of the most potentials among the Bohai Bay port group and is the country's largest port for coal transportation. In recent years, the port has established an information database of incoming ships and realizes the full coverage of the 5G network. The port has also automated the entire coal loading and unloading process and thus improved its overall efficiency by 10 percent.
Kang Yanmin, secretary of the Cangzhou Municipal Party Committee, said that Cangzhou, designated by the State Council as a coastal city with an open economy, is a significant city for the coordinated development of the BeijingTianjin-Hebei one-hour transportation circle and one of China's most dynamic cities.
Mongolia sells more coal to China even as the world shuns the polluting fuel
Mongolia sends 86 % of its exports to China, with coal accounting for more than half the total. It is upgrading its infrastructure in the hopes of selling even more to its southern neighbor. China is the world's largest polluter and has pledged to achieve carbon neutrality by 2060
. Chinese authorities ordered producers in spring to add 300 million tonnes of mining capacity this year, the equivalent of an extra month of coal production. Mongolia is keen on shipping 19 million metric tons of coal to China this year, according to research statistics, already exceeding 2021's 16 million total.
Government officials are hoping for Mongolia to surpass the record 37 million tonnes sent in 2019 and to keep supplying China with a steady stream of coal well into the next decade. Deputy mining minister, BatnairamdalOtgonshar said that coking demand won't decline in the next 10 years, but the technology may change. Batnairamdal is pushing for Mongolia to invest heavily in coal, and new railways to connect to China's ports and processing plants.
Australian government mulls coal price cap
Prime Minister Anthony Albanese indicated that government intervention on the coal price is likely. With Australia’s electricity prices tipped to skyrocket 56 % by the end of 2023, the Federal Government has long signaled it would move to drive down prices. One of the key factors to contain the price hike is to place a temporary cap on the price of coal.
Significant global issues like Russia’s invasion of Ukraine have seen coal prices soar to more than $US400 a tonne in 2022, leading to significant profits for coal producers. The government believes these prices have driven higher local energy prices. Albanese said there was a “sense of urgency” in helping to reduce soaring energy prices. “But we also have the sense of making sure that we get it right and get the detail right,” he said.
Part of that complex process is working with coal-producing states New South Wales and Queensland, whose support would be required to make any changes to pricing structures. Albanese said he was having discussions with state leaders and would see the premiers and chief ministers at a national cabinet meeting.
Peabody approves $140m redevelopment capital for Australia coal mine
US-based coal miner Peabody Energy has begun steps to redevelop its North Goonyella mine, a hard-coking coal longwall operation in Australia with more than 70 million tons of reserves.
The company announced an initial $ 140 million of redevelopment capital budget for further ventilation, equipment, conveyors, and infrastruc-
ture updates in anticipation of reaching development coal subject to regulatory approvals in the first quarter of 2024.
Development costs beyond the current boardapproved amount are estimated to be $ 240 million, allowing longwall operations to start in 2026. The project would benefit from substantial infrastructure and equipment in place at the mine including a new 300 m longwall system, a proven coal handling preparation plant, a dedicated rail loop for transport to the Dalrymple Bay Coal Terminal, and an accommodation village with housing and service amenities for more than 400 workers.
The Australian coal industry is facing increased industrial action, making it harder for firms to maintain production as they struggle with flooding that has already cut exports and added upwards pressure to already inflated coal prices.
Unions are pushing hard for improved working conditions, representation and wages, spurred on by inflationary pressures on their members, higher profits by coal mining firms, labor shortages, and changes in the federal government. Several mining firms, as well as a port service provider, are negotiating new enterprise agreements (EAs), with unions representing workers balloting their members on taking protected industrial action.
Australian-Japanese joint venture BHP Mitsubishi Alliance is facing potential strikes at its coking coal mines in Queensland after unionized workers voted for industrial action.
U.S. renewables to outpace coal and nuclear in 2022
Renewable energy sources like solar and wind will likely generate more power than coal and nuclear plants in the United States as per reports. According to the report, wind and solar output are up 18% through Nov. 20 compared to the same time last year and have grown 58 % compared to 2019, according to the U.S. Energy Information Administration.
But doubts remain whether the growth of renewables will meet the 40% emissions reduction goal by 2030 set by the Biden administration. It has been observed that supply chain constraints and trade disputes have slowed wind and solar installations, raising questions about the United States’ ability to meet the emission reductions sought by the Inflation Reduction Act.
Despite the hundreds of billions invested in clean energy by the Inflation Reduction Act, it will take time to implement the new law and get new funding out to projects. Researchers at Princeton University estimate the country needs to install about 50 gigawatts of wind and solar annually between 2022 and 2024, or roughly double the 25 GW that the United States installed annually in 2020 and 2021.
Colombia to face the effects of tax reforms
Colombia, the world's fifth largest coal exporter, will next year have to address the effects of the country's recently approved tax reform, which, among other things, prevents mining companies from deducting royalty payments from their income tax bills. In addition to the economic effects that this will have on the coal industry, the sector is also facing the impacts of the global economic slowdown and further reforms that the government may carry out.
Former deputy minister of mines and current president of coal producers' federation Fenalcarbón, Carlos Cante, in an interview stated that the main challenge has to do with the global economic slowdown that will deepen in 2023 and will mean a decrease in volumes of energy
demand in general, so we will have to see the implications for thermal coal and also for steel production and its effects on metallurgical coal and coke.
One of the fundamental indicators of the decrease in the rate of economic growth at the global level is the demand for energy and steel, so we're uncertain about the depth of the recession and how the international trade volumes of both thermal and metallurgical coals will decrease, as well as the impact it will have on prices.
The seaborne thermal coal situation returns to pre-Ukraine invasion period
The global thermal coal market has returned to where it was before Russia's attack on Ukraine, with prices for most seaborne grades dropping back to pre-invasion levels while volumes remain steady. Seaborne thermal coal prices spiked after the Feb. 24 assault on Ukraine, reaching record highs amid concerns over the loss of exports from Russia and Ukraine, as well as higher demand in Europe on fears of a shortage of natural gas for power generation.
Most-traded grades from top exporters Australia, Indonesia, and South Africa have in recent weeks fallen below or dropped close to, the preinvasion levels. Seaborne thermal coal volumes have also steadied in recent months, even if there has been a small realignment of flows toward Europe and away from Asia.
The exception to the return to normality is highenergy Australian thermal coal shipped from Newcastle, but while this remains a widelywatched grade in the media, it only covers a tiny part of the market and is focused on buyers mainly in Japan. Indonesian thermal coal is popular with buyers in China, the world's biggest importer, and India, the second-largest, as it tends to be cheaper than other grades, even though it's lower energy.
.Poland plans on delaying coal phase-out, looks at opening mines amid energy crisis
The ongoing energy crisis has led Poland to delay its plans to shut down existing coal mines. According to government ministers, the country plans to expand production and even open new facilities. Poland generates 70% of its electricity by using coal, making it by far the highest figure in the EU. One-third of Polish households are heated by burning coal, and the authorities have sought to reduce this figure.
Most of the coal burned in Poland is mined domestically. Under an agreement with unions, the government announced plans in 2020 to close all Polish coal mines by 2049. In an interview with TV Republika, climate minister Anna Moskwa stated that there was growing “demand for coal even before the outbreak of war” in Ukraine. As a result, “we are planning to increase production wherever possible and are also planning new [mining] locations”. Moskwa added that, although “nuclear energy is the future for Poland” – with the government currently finalizing plans to construct the country’s first three nuclear power plants – “until we are sure of this atom[ic] energy we will not shut down any coal-fired power plant”.
The government is aiming to build another plant in the near future. The state treasury has been on a quest to buy coal assets from state-owned energy firms as part of an effort to restructure the Polish energy sector by helping state firms more easily find financing for low- and zero-emission investments.
