[Coal] Newsflash!!

Bumi Resources 35 percent coal sale contract 2010 settlement

2010-01-13T13:28:00.001+07:00

PT Bumi Resources has only completed 35 percent if its coal sale contract this year. “More than 65 percent of our sale volume did not have a contract in 2010,” the company’s spokesperson, Dileep Srivastava told Tempo in Jakarta yesterday.

Nevertheless, the company is still optimistic that it can produce a high-priced contract within a short time. “We are negotiating with potential buyers,” Dileep said. With the high coal prices, the company has a chance to increase its performance compared to last year’s.

According to Dileep, as the biggest coal mining company in Indonesia, the company is certain that it can sell more coal and use the momentum of the price increase. Based on estimates of the spot market Newcastle Coal Index, the price of coal this year can top US$ 100 per ton.
Source: Tempo Interactive

globalCoal Market Overview 12 January 2010

2010-01-13T08:57:00.012+07:00

The market continued to retreat today. China has announced it was raising banks' reserve requirement by 0.5% because of bubble concerns. Alcoa has disappointed the market with lower reported profit and Stock Markets in Europe and in the US dropped.March DES ARA contract traded $13 lower and RB1 is $7 lower than last week. Cal 10 implied frei g ht narrowed by $1.40 to $3.25, and prompt RB traded at a premium to DES ARA contract. In energy related products, Oil is down ~ $1.

Coal Newsletter for Tuesday 12 Jan 2010

2010-01-13T08:57:00.008+07:00

Well the collapse in coal prices from yesterday lunch time continued. We opened around $1.50 down and then plateaued for most of the morning session. But the afternoon session saw a collapse in prompt API#2 prices, and some low phys DES ARA trades helped justify the collapse. Gas, power, equities, and non-US currencies were all weaker also, but reports of supply issues from Indonesia and continued strong Chinese demand due to their cold snap help keep FOB prices, particularly Newcastle, firm.

In physical we saw a morning 75kt Mar'10 RB1 trade at $87.50. The afternoon saw DES ARA trade for the first time since last Thursday, with two 50kt Mar'10 trades going through, the first at an incredibly low $85.00 the next was higher at $85.75.

International Coal Price Report - Prebon - 1/12/2010

2010-01-13T08:57:00.005+07:00

EnergyCoal@TullettPrebon.com www.TullettPrebon.com

NEWCASTLE COAL INDEX CLOSING PHYSICAL CURVE

2010-01-13T08:57:00.003+07:00

Australia sees higher Asian thermal coal imports

2009-10-02T13:01:00.001+07:00

* Asia '09 imports to rise 3.5%, vs pvs f'cast of 3.3% fall
* Asia 2010 thermal coal imports expected to rise 6.3 pct
* China to become net importer of thermal coal in 2009
(Adds comments on South Korea, table)
By Fayen Wong

PERTH, Sept 22 (Reuters) - Strong demand for thermal coal
in China and India will help Asia avoid the first fall in
imports for a decade this year, and push import growth even
higher in 2010, an Australian government forecast showed on
Tuesday.
In an updated quarterly forecast, the Australian Bureau for
Agriculture and Resource Economics (ABARE) said demand for
imported coal in Asia would rise by 13.6 milion tonnes, or 3.5
percent, to 401.6 million tonnes in 2009.
This compares with its previous forecast in June for a 3.3
percent fall, which would have been the first decline in at
least 10 years. [ID:nSYD142464]
ABARE, the research body for the world's number two thermal
coal exporter, also said Asia's steam coal imports in 2010
would increase by 25.4 million tonnes, or 6.3 percent, to 427
million tonnes, up from its previous estimate of 5.3 percent
growth.
Thanks to improved regional demand and new port capacity,
ABARE has significantly upgraded Australia's thermal coal
exports, estimating it to increase 2.6 percent from a year ago
to 140 million tonnes in 2009/10. It had expected Australian
exports to fall 6 percent to 122.5 million tonnes in 2009/10 in
its June report.

"Over the course of 2009, thermal coal demand in the
Atlantic market has been weak, while demand in the Asian market
has remained relatively strong, underpinned by increasing
imports into China," ABARE said in the report.
Imports from China, the world's largest coal producer and
consumer, are expected to jump about 70 percent from a year ago
to reach 60 million tonnes in 2009 -- making it a net importer
this year by 35 million tonnes, ABARE said.
Previously ABARE had said that China, now the world's No. 6
steam coal exporter, would only become a net importer in 2010.
Indian imports are seen rising 24 percent from a year ago
to 42 million tonnes in 2009 and reaching 50 million tonnes in
2010, underpinned by the government's plan to double coal-fired
electricity generation capacity by 2017.
ABARE also revised up its thermal coal import forecasts by
Japan, the world's largest steam coal buyer, estimating a 10
percent fall in 2009 to 115 million tonnes, compared with its
June forecast of a 14 percent decline.
Japan's thermal coal imports are expected to see little
growth in 2010 due to a subdued economic environment and
possible higher use of nuclear power, the agency said.
In South Korea, ABARE said growth in the country's steam
coal imports is seen slowing in 2010, after a forecast 7
percent increase to 81 million tonnes this year on the back of
new coal-fired power plants coming onstream.
"The program to expand coal-fired generation capacity was
largely completed in the first half of 2009 and limited new
capacity is scheduled to be completed in the near future," it
said.
ABARE'S THERMAL COAL OUTLOOK
2008 2009* 2010*
---------------------------------------------------
Imports (million tonnes)
World 704.0 689.9 729.6
Asia 388.0 401.6 427.0
China 35.4 60.0 65.0
Taiwan 60.3 55.0 60.0
India 34.0 42.0 50.0
Japan 128.2 115.0 115.0
S.Korea 75.5 81.0 83.0
Malaysia 16.6 16.0 20.0
other Asia 37.9 32.6 34.0
Europe 222.5 205.6 215.4
Other 93.5 82.7 87.2
Exports (million tonnes)
Indonesia 193.0 205.0 210.0
Australia 126.4 137.9 146.0
Russia 85.8 88.0 90.0
Colombia 73.6 70.0 74.0
South Africa 61.3 63.0 65.0
China 42.7 25.0 27.0
United States 35.1 20.0 22.0
Others 86.1 81.0 95.6
* ABARE's forecast
(Reporting by Fayen Wong; Editing by Michael Urquhart)

Bukit Asam:coal mines not affected by Indonesia quake

2009-10-01T13:32:00.009+07:00

JAKARTA, Sept 30 (Reuters) - Operations at Indonesia's state-controlled coal miner PT Tambang Batubara Bukit Asam were not affected by the Sumatra quake, said investor relations official Nurtimah Tobing.
(Reporting by Fitri Wulandari; Editing by Ed Davies)

Baltic index rises, set to stay volatile

2009-10-01T13:32:00.005+07:00

LONDON, Sept 30 (Reuters) - The Baltic Exchange's main sea freight index <.BADI>, which tracks rates to ship dry commodities, rose on Wednesday helped by light cargo interest from China.
But brokers said in the absence of stronger demand, freight rates were set to remain volatile.
The index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, rose 1.6 percent or 35 points to 2,220 points.
"It's really a bit of a correction," a freight derivatives broker said. "There is nothing really positive happening on the physical side."
Brokers said an eight-day national holiday in China starting on Thursday was likely to lead to softer conditions on the freight market.
In recent months Chinese demand for iron ore -- the primary material in the manufacture of steel -- has dominated freight market activity while also adding to swings on the main index.
Port congestion in China as well as off Australia had tied up a large number of Capesize vessels, typically hauling 150,000 tonne cargoes such as iron ore and coal. But queues off China have eased.

"There is still interest on the iron ore side from the Chinese, but it is nothing heavy compared to a couple of months ago," the broker said.
The Baltic's Capesize index <.BACI> rose 3.57 percent or 98 points on Wednesday.
"It will be interesting to see what happens after the Chinese holiday because we have a lot of Capesize ships that are going to be delivered," a ship broker said separately.
"At the moment it is a tough call to say where the Capesize market is headed. Volatility is expected."
The main sea freight index hit a more than eight-month high on June 3 of 4,291 but has been erratic since then.
Analysts said while there was a pick-up in appetite for iron ore from European buyers as well as in Japan, without stronger iron ore buying from China it would not be enough to bolster freight rates.
Concerns continued to grow over the rising number of new ships set to hit the market in the coming months despite indications of vessel cancellations and delays, analysts said.
"Overall demand is stabilising and that's encouraging, but the effect of these new buildings (new ships) coming onstream is yet to be seen," the ship broker said. "That is pretty daunting." ((jonathan.saul@reuters.com; +44 207 542 4357; Reuters Messaging: jonathan.saul.reuters.com@reuters.net))
Keywords: BALTIC/

US EPA holds up coal-mining permits as firms fume

2009-10-01T13:32:00.002+07:00

NEW YORK, Sept 30 (Reuters) - Mining companies accused the U.S. Environmental Protection Agency on Wednesday of ignoring America's need for affordable energy and hurting workers in a poor region of the country by delaying permits for proposed surface, or "mountaintop," mines in Appalachia.
The decision that all 79 pending permits must undergo additional evaluation by the EPA and the Army Corps of Engineers, because they pose a potential hazard to water, threatens job security in parts of Kentucky, West Virginia and Ohio that depend heavily on coal mining, the miners said.
But environmental groups welcomed the decision and called on the Obama administration to reverse rules that allow surface mines and to enforce clean air and water legislation.
"EPA's hit-list was compiled by people in Washington who are entirely insulated from the consequences of their actions and far removed from the families and communities affected by them," said Kentucky Coal Association President Bill Caylor.
His Ohio association counterpart Mike Carey accused the EPA of "playing with people's livelihoods. The implications of their delaying tactics will be felt throughout this state's economy."

And Bill Raney, president of the West Virginia Coal Association, said the people of his state were incredulous. "They don't understand why Washington is willing to kill off good paying jobs when our economy is still on the ropes and the unemployment rate is still unacceptably high," he said.
In contrast, Mary Anne Hitt, Deputy Director of the Sierra Club's Beyond Coal Campaign, praised the EPA's move, saying it hoped the Obama administration would take more action toward ending mountaintop mining.
"An enhanced review of each of these pending permits will surely prove that this most destructive form of coal mining is incompatible with clean water."
She wants the EPA "to reverse the Bush-era rule changes that allowed coal companies to dump waste into waterways.
"We call on the Obama administration to reinstate the original intent of the Clean Water Act and to prevent mining waste from being used as fill material."
The issue pits coal miners, who argue it is more economical to dig into mountainsides than sink underground shafts, against environmentalists, who accuse the companies of dumping waste and polluting rivers and streams.
In February, a U.S. Court of Appeals overturned a lower court ruling that had banned surface mining -- which basically slices the top off hills and mountains -- in West Virginia.
The appeal had been brought by Massey Energy , one of the Top Four U.S. coal miners, and the West Virginia Coal Association. Surface mines account for about one-third of West Virginia coal and half of Kentucky's, while coal burned in power plants produces about half of America's electricity.
In a press release, the EPA said Assistant Administrator for Water Peter Silva finalized the list of 79 Appalachian surface coal mining permits requiring additional review and coordination under the Clean Water Act (CWA).
The permits represent all backlogged surface coal mining projects under review by the Army Corps of Engineers, it said.
"After a careful evaluation of these surface coal mining projects, EPA determined that each of them, as currently proposed, is likely to result in significant harm to water quality and the environment and are therefore not consistent with requirements of the CWA," the agency said.
The National Mining Association, which represents coal mining companies, condemned the "enhanced review" process. "We cannot plan for the economic future of our operations absent a workable, transparent process that provides certainty," said association President Hal Quinn.
"EPA's answer of more delay and study is at cross-purposes with our nation's need for affordable energy, investments and secure jobs."
(Reporting by Steve James, editing by Gerald E. McCormick)
reuters.net

European Energy Trades Move to Exchanges to Shun Risk

2008-11-03T08:57:00.006+07:00

European energy traders are increasingly using regional electricity and natural-gas exchanges to reduce their risk amid a global credit freeze and unstable financial markets, delegates at a power conference in Geneva said.

``The last few months we've seen a direct response with traders wanting to cut their counterparty risk,'' said Paul van Son, chairman of the European Federation of Energy Traders. The move away from so-called over-the-counter markets ``could provide a durable shift,'' Van Son, who is also an Essent NV managing director, said yesterday in an interview at the Emart conference.

Traders are opting for exchanges, where settlement is guaranteed by a clearing house. While over-the-counter, or OTC, trading remains dominant, the share of exchange trading has probably risen to 30 percent of the market, with OTC taking the remaining 70 percent, Van Son said.

Last year, exchanges had about 25 percent of the trade in Europe's eight biggest power markets, with bilateral trading via brokers or directly between participants taking the remaining 75 percent, according to consultant Prospex Research Ltd. in London.

The European Federation of Energy Traders, or EFET, brings together more than 90 trading companies from 23 European nations.

``Short-term we'll see a change'' toward the exchanges, Alan Svoboda, director of sales at CEZ AS, central Europe's biggest power company, said in an interview in Geneva. ``It's inherently safer.''

OTC Volumes to Fall

Spectron Group Ltd., an OTC broker, said energy trading volumes may fall next year.

``There will be some decrease in volume,'' Managing Director for Business Development John Evans said today in an interview at the conference. ``We were looking for future growth in the energy market from banks and hedge funds; now we don't know what's going to happen next year.'' October volumes have ``kept up,'' he added.

Other commodity markets are shunning bilateral accords as well. In oil markets, the credit squeeze has reduced the volume of OTC trading ``dramatically'' as banks avoid derivatives, Vitol Group's Chief Executive Officer Ian Taylor said on Oct. 28 at a London conference.

The OTC markets, where brokers such as ICAP Plc and GFI Group Inc. match buyers and sellers, will probably eventually win back trading because their fees tend to be lower than on the exchanges, at least for the bigger traders, CEZ's Svoboda said. Utilities and trading companies also prefer the flexibility of transacting directly with counterparties, where they have more negotiating power than on exchanges, EFET's Van Son said.

Enron's Collapse

Still, electricity exchanges have gained market share following previous declines in OTC trading, such as the 2001 collapse of Enron Corp., which was the world's biggest energy trader at the time, according to the chief executive of APX BV, the Dutch energy exchange company.

``We could have a boost on the exchanges for some time; at least a sizable chunk of that will stay, that is what I expect,'' APX's Bert den Ouden said yesterday in an interview in Geneva. ``This is the experience we've had in the past.''

For APX, which offers prompt and near-term power and gas trading in the Netherlands, U.K. and Belgium, trading volumes are increasing and were rising even before the financial-market turmoil of the past two months.

``We're also seeing more interest from companies to become members and we're seeing an acceleration in memberships,'' Den Ouden said. APX aims to complete the takeover of Amsterdam-based European Energy Derivatives Exchange NV by the end of this year, he said. Endex offers futures contracts in Dutch and Belgian power and gas. Germany is the continent's biggest power market.

Casualties from the global credit crisis include U.S. investment bank Lehman Brothers Holdings Inc., which filed for bankruptcy last month, and Fortis, which was rescued by Belgium, the Netherlands and Luxembourg.

``We don't expect any collapses of any energy companies,'' Van Son said.

Source: Bloomberg 30-10-2008

Coal efficiency set to get boost

2008-11-03T08:57:00.003+07:00

The authorities aim to boost the efficient use of coal supplies by raising the average recovery rate of the resource in the country from about 30 percent currently to at least 50 percent by 2010, a senior government official has said.

The country's top economic planning agency, the National Development and Reform Commission (NDRC), had in 2006 set the goal of a 40 percent coal recovery rate by the end of the decade, Zhao Xiaoping, deputy director of the National Energy Administration (NEA) under the NDRC, said to participants of the 2009 China Industrial Development Forum on Saturday.

China is the world's largest coal producer and consumer. Its dependence on coal continues amid the occurrence of coal mine accidents and its use of the resource is said to be inefficient compared with those of other countries - the coal recovery rate in developed countries including the United States, Australia, Germany and Canada is reportedly about 80 percent.

China uses 3.3 tons of raw material to produce 1 ton of coal, while the US is said to use 1.25 tons.

The country's latest move to boost coal efficiency is expected to save 1.3 tons of resources for every ton of coal produced.

The authorities also aim to reduce energy consumption per unit of GDP by 20 percent, as well as cutting the emission of major pollutants by 10 percent, in the next five years.

As part of its efforts to achieve these goals, the country aims to consolidate the coal industry by building five large mines with a capacity of 100 million tons each, as well as shut polluting and inefficient small coal pits, Zhao said.

"Energy conservation and the ability to raise energy efficiency is a top priority in our energy development strategy," Zhao said.

According to a 2007 energy report issued by the Chinese Academy of Social Sciences, the country's State-owned coal mines have a mining recovery rate of nearly 44 percent, compared with a low of 10 percent seen in a number of small and private coal mines.

The low rate is mostly caused by backward and inefficient mining techniques, the academy reported. The country relies on coal to generate nearly 80 percent of its electricity, NDRC figures showed.

China Daily - 3-Nov-08

China Sep coal output slows on economic downturn

2008-10-30T13:17:00.004+07:00

China's coal output slowed down in September after power consumption weakened for five months in a row on economic downturn.

Raw coal dropped to 229 million tonnes in September from August's 232 million tonnes, show data from the State Administration of Work Safety. Total coal output increased 11.43 percent from a year ago to 1.99 billion tonnes in the first nine months.

The output growth rate was down from 11.46 percent for the year ending August, which, according to analysts, is mainly attributed to closure of small coal mines.

Thermal power consumption declined by 3.4 percent to five-month low in September. Electricity used by the textile industry, hard-hit by the ailing exports, was only 1.9 percent more than the same period last year. By contrast, the power consumption growth rate advanced 11.20 percent in January-November of last year from a year ago, according to Wind Financial Data.

Power coal output, which took up 40 percent of the total, declined 7.64 million tonnes, or 12 percent in September from a month ago.

Meanwhile, overstock has been plaguing the northern Qinhuangdao Port, China's largest loading port for coal, as coal stock reached 8.9 million tonnes on Sep 21.

Coal stock in the port would keep above 8 million tonnes in the short term, predicted Pu Hongjiu, vice chairman of China National Coal Association.

China's GDP slowed to 9 percent in the third quarter as the spreading credit crisis sapped foreign demand for Chinese goods. GDP for the first three quarters slowed to 9.9 percent, the first single-digit expansion since 2002.

(Source:en.sxcoal.com)

Newcastle Coal Price Falls to 6-Month Low, Drops Below Contract

2008-10-07T10:39:00.010+07:00

Power station coal prices at Australia's Newcastle port, a benchmark for Asia, fell for a seventh week, dropping 6.1 percent to trade below this year's contract price as Chinese demand slows and oil prices slump.

The weekly index for power-station coal prices at the New South Wales port dropped $7.81 to $121.17 a metric ton in the week ended Oct. 3, according to the globalCOAL NEWC Index. The spot price is now trading below the contract price of $125 a ton for the year that started April 1 for first time since the week ended April 4.

Oil declined 12 percent last week as reports showed U.S. fuel demand in the previous four weeks was the lowest in almost seven years. Demand from China, the world's largest consumer of thermal coal, is slowing as output from domestic mines increases, said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd.

``Oil prices are really hitting the skids now and that is going to continue to drag energy prices lower,'' Pervan said today by phone from Melbourne. ``China is back on its feet production-wise and at the same stage we are starting to see some slower demand conditions.''

The weekly globalCOAL index has slumped 38 percent since trading at a record $194.79 in the week ended July 4. The monthly index fell 10 percent to $144.82 a ton in September, from $160.90 the previous month.

Commodity prices measured by the Reuters/Jefferies CRB Index of 19 raw materials tumbled 10 percent last week, the most since as least 1956.

``The fact you are seeing such heavy corrections in other commodity markets it's no surprise that we are seeing spot markets dip below last year's contract,'' Pervan said. The price may head toward $100 a ton as demand slows sharply, he said.

Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle.

Thermal coal producers won a 125 percent increase in annual contract prices this year on supply constraints and increased Chinese demand.

Bloomberg - 6-Oct-08

Richards Bay Coal's Exports Decline on Rail Stoppages

2008-10-07T10:39:00.008+07:00

South Africa's Richards Bay Coal Terminal, the world's biggest coal-export facility, shipped 7.2 percent less coal last month compared with a year earlier after rail accidents cut deliveries to the port.

The terminal, on South Africa's northeast coast, exported 5.32 million metric tons of the fuel, it said today in an e- mailed response to questions. That compares with 5.73 million tons in September 2007. In August this year the terminal shipped 5.28 million tons.

The two rail lines that take coal to the port were closed twice in September after carriages derailed. Richards Bay received 4.42 million tons of coal by rail during the month, down from 5.78 million tons in August. Stocks fell 24 percent to 2.92 million tons, below a target of 3 to 4 million tons.

During the month, 59 ships were loaded at the terminal and 548 trains arrived, more than 300 less than a month earlier.

Richards Bay Coal is owned by South Africa's biggest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. While it's the world's biggest coal-export terminal, Australia's Newcastle port ships more of the fuel from two terminals.

The price of coal exported from the port fell 8.9 percent to a four-month low of $132.80 a ton in the week ended Oct. 3, according to McCloskey Group Ltd.

At the rate coal has been shipped so far this year, Richards Bay will export 58.49 million tons, according to the port. It has the capacity to ship 76 million tons.

source: Bloomberg 06 October 2008

Australian's fish firm acquires S. Kalimantan underground coal concession

2008-10-07T10:39:00.006+07:00

Australian firm Sam's Seafood Holdings Limited announced on Monday it will enter Indonesian coal mining business through acquisition of 100 percent interest in Triumph West Pty Ltd.

Triumph has the rights to 80% of the shares in two Indonesian PMA companies, which owns the mining rights to an underground coal concession near Batulicin in South Kalimantan under mining authorities known as Kuasa Pertambangan (KP).

This concession covers an area previously explored by PT. Arutmin Indonesia and in the near vicinity of three exploitation/production licenses currently being mined by Arutmin, the company said.

The KP, by the name of PT.Roda Niaga, covers an area totaling 6,412 hectares and forms part of a relinquished portion of the PT Arutmin contract of work that lies immediately South-Southwest of the Mereh block in the Batulicin area of South Kalimantan.

Based on previous exploration results, Triumph considers that the potential tonnage of coal in the underground seams lying between the Ata and Mereh deposits is significant. However, insufficient work has been completed to date to enable a JORC compliant resource estimate to be determined, the company said.

"It is proposed that initial activity will be concentrated on the exploration and development of underground coal resources. The intention is to secure a long term off-take agreement from a partner that will undertake all exploration and development activities in return for future delivery of coal," the company said.

News Source : September 29, 2008 / Petromindo.com

Japan Tepco to pay Xstrata 24 pct more for thermal coal

2008-10-07T10:39:00.004+07:00

Japan's top utility Tokyo Electric Power(TEPCO) has agreed to a 24 percent price hike to pay Xstrata's Australian coal unit at about $155 a tonne for mid-term thermal coal contracts, traders from Australia and Japan said on Monday.

More than five traders said Xstrata and some Japanese utilities, including TEPCO, had struck an agreement late last week. The deals are for annual contracts that run from Oct. 1 2008 to Sept. 30, 2009.

Japan utilities to pay China coal import tax-sources

2008-10-07T10:39:00.003+07:00

Japanese utilities have agreed to pay an export tariff for thermal coal imported from China, two industry sources said on Friday, adding to the burden of the utilities already faced with higher energy prices.
The additional costs could prompt Japanese utilities, the world's biggest buyers of thermal coal, to reduce their volumes of thermal coal imports from China.
China, the world's largest producer and consumer of coal, imposed an export tax of 10 percent on thermal coal starting Aug. 20, as it seeks to ease a severe power shortage that has forced half the nation to ration electricity. [ID:nSHA56943]
Japan has settled its thermal coal contract price with China at $131.40 a tonne for the current business year.

An official at Japan Coal Development Co Ltd, which negotiates long-term coal supply contracts with China on behalf of the utilities, said a discussion on the tariff has been held with China, but declined to comment on details because the matter is confidential.
The introduction of the export tax on coal has been expected to give China less incentive to sell spot coal cargoes abroad, and they could soon raise term prices.
source: Reuters 03 October 2008

How carbon capture and storage (CCS) could make coal the fuel of the future

2008-09-12T13:41:00.002+07:00

How carbon capture and storage (CCS) could make coal the fuel of the futureLewis Smith, Environment Reporter It has been condemned as one of the main causes of global warming but is coal about to enjoy an extraordinary rebirth as the fuel of the future?

The first power plant in the world that will take the toxic emissions from coal and bury them deep in the ground opens today, carrying with it the hopes of scientists and environmentalists around the world.

If the power station in Spremberg, eastern Germany, is able to produce affordable electricity without polluting the atmosphere, it could mark the start of a new era for a fossil fuel whose days appeared numbered.

Carbon capture and storage (CCS) technology is designed to separate carbon dioxide from other chemicals during the process of generating electricity and siphon it off to be buried safely in disused oil or gas fields, where it can be stored indefinitely. The construction of the new plant by Vattenfall, the Swedish power company, was welcomed by engineers and environmentalists but raised fears that British attempts to develop the technology, which is expected to cut CO2 emissions by up to 90 per cent, may be falling behind. A competition has been launched by the British Government to encourage the construction of a demonstration coal-fired plant with a capacity of at least 300MW — ten times the size of the German pilot — by 2014. It must be capable of being fitted, or “retro-fitted”, to existing power plants. However, a decision on the recipient of the government development money is still a year away and critics believe that Britain's chance to dominate the sector is disappearing.

CCS has the potential not only to be a vital tool in controlling global warming but to win influence and numerous lucrative contracts around the world retro-fitting the technology.

A spokeswoman for the Department for Business, Enterprise and Regulatory Reform insisted that Britain remained “in the vanguard” of attempts to get the technology started. She said: “The UK has an ambitious approach to demonstrating CCS and we are among only a few countries in the world that have made a firm commitment to support commercial-scale demonstration projects. We remain on course for our project to be operational by 2014.”

The power company E.ON has been researching oxyfuel CCS, the system used in Germany, at its test facility in Nottinghamshire for 18 months but concedes that it has fallen behind Vattenfall. “They are ahead of the UK,” Emily Highmore, of E.ON, said.

She added that much of the research by the two organisations was complementary. “What we are hoping to do as a group is develop a pilot to be up and running by 2010. Everybody is working on this to the same end — desperately seeking the holy grail of making coal truly viable.”

Groups such as Friends of the Earth remain frustrated at lack of progress in Britain and accuse ministers of failing to champion CCS with sufficient zeal. Robin Webster, of the green pressure group, welcomed the German pilot: “We welcome it as a genuine attempt to demonstrate that CCS will work. It's small but this kind of thing is really needed. Our concern is that the UK is dragging its heels.”

Adding CCS technology to power plants is widely agreed to be the only realistic hope of making the necessary inroads into carbon dioxide emissions without resorting to the politically unacceptable option of turning the lights out. Fossil fuels are the biggest source of carbon dioxide emissions yet 80 per cent of the world's energy depends on them. The International Energy Authority calculates that CCS could account for almost a third of the CO2 reductions needed by 2050.

The official opening takes place today but the pilot plant has been operating for more than a week. It captures about ten tonnes of CO2 each hour for storage in an old gasfield.

Source: Times OnLine Date: Sept 9th, 2008

Thai Lanna to open new coal mine in Indonesia by Q4

2008-09-12T13:33:00.002+07:00

Thai coal miner and ethanol producer Lanna Resources PCL LANN.BK said it planned to open another mine in Indonesia by the fourth quarter to help ease the impact of the forced closure of one of its existing mines there.

The opening had been delayed from earlier this year due to heavy rains in Indonesia, where until recently the company operated two coal mines, business development director Srihasak Arirachchkaran told Reuters on Thursday.

"We want to speed up operating this mine because it should help compensate for the second mine," he said.

Lanna's coal business contributes almost 90 percent of sales and nearly half of profit.

However, in July an Indonesian court revoked the licence of one of its two mines in the country, which was operated by its 55 percent owned Indonesian subsidiary.

The government may grant a new licence for the mine and Lanna could work with the new operator.

Lanna planned to spend $10 million next year to develop the third mine, which should produce about 50,000-100,000 tonnes this year, rising to 1.2-1.5 million tonnes in 2009 and 2 million tonnes in 2010, Srihasak said. Despite the mine closure, rising prices for coal and ethanol should help Lanna show higher earnings this year.

"We still have growth in terms of both the top line and bottom line because prices of coal and ethanol are much better than expected," he said without giving a specific forecast.

Two analysts polled by Reuters Estimates expected a 2008 net profit of 515 million baht ($15 million), up 38 percent. Its first-half net profit rose 9.7 percent to 288 million baht.

Coal prices were expected to rise to $60 per tonne in the second half from the first half's $55, but prices next year are expected to fall in line with global crude prices, Srihasak said.

Its ethanol business, run by subsidiary Thai Agro Energy, is expected to beat a profit target of 100 million baht this year after oil companies placed more orders to boost their inventories for the fourth quarter, he said.

Domestic ethanol output is expected to be 0.9-1.0 million litres a year and rise to 1.5 million litres next year, which should be sufficient to satisfy domestic demand, he said.

Lanna is 45 percent owned by Siam City Cement SCCC.BK, Thailand's second-largest cement producer.

Lanna owns 75.75 percent of Thai Agro Energy, which plans to list on the Thai bourse in the first half of 2009.

Thai Agro plans to sell 200 million new shares to the public and the proceeds will be used to fund the construction of a second ethanol plant. After the listing, Lanna's holding will be diluted to 51 percent, he said.

Thai Agro operates at full capacity, producing 150,000 litres (26,400 gallons) a day, and its second plant would have a daily capacity of 200,000 litres, Srihasak said.

Adaro's Unit Gets $300 Million Loan

2008-09-12T13:23:00.001+07:00

A unit of PT Adaro Energy, Indonesia's second-largest coal producer, secured US$300 million of loan from banks including Standard Chartered Plc and Sumitomo Mitsui Banking Corp.

The loans will be used to refinance debt and as working capital at PT Saptaindra Sejati, Adaro's coal mining services unit, Andre Mamuaya, a director at Adaro Energy, said in a statement to the Indonesian stock exchange Thursday.

Other banks that extend the syndicated loan include New Zealand Banking Group Ltd Caylon, United Overseas Bank Ltd., the Bank of Tokyo-Mitsubishi, DBS Bank Ltd, Oversea-Chinese Banking Corp. and local banks Bank Export Indonesia and PT Bank Mandiri, Indonesia's largest financial-services company by assets. The loan will mature on June 30, 2013, and pay as much as 270 basis points more than the London interbank offered rate (Libor).

Adaro has recently injected US$40 million out of its recent IPO yield into Saptaindra.

Bloomberg, The Jakarta Post & Investor Daily (05 Sep 2008)

Permits of 43 Mining Concessions Have Been Revoked in Central Kalimantan

2008-09-12T13:17:00.003+07:00

As many as 43 mining concession permits (KP), mostly coal mining operations, in the North Barito regency, Central Kalimantan, has been revoked.

"We don't need a lot of mining operations, which are not capable of operating. It is better for us to pay attention on those willing and serious in conducting business," said the Governor of Central Kalimantan, Agustin Teras Narang in Palangka Raya.

The provincial government of Central Kalimantan has also recently revoked permits of 11 plantations located in the same regency due to a similar reason.

According to Teras, who is also an acting regent of North Barito, most of the companies whose permits were revoked have not follow the existing procedure and prerequisite. While several of them have overlapping areas with other investors. On average each of these companies has areas between 1,000 to 2,000 hectares.

Despite revoking their permits, Teras admitted that his administration will still open opportunities for these companies to improve their operations and complete the necessary procedure to regain their permits.

Source : Antara & Bisnis Indonesia (01 Sep 2008)

Sumitomo gets approval for Tanjung Jati B expansion

2008-09-12T08:21:00.003+07:00

Japanese firm Sumitomo Corp and state owned electricity firm PT Perusahaan Listrik Negara (PLN) have reached agreement to build the planned expansion of the Tanjung Jati B coal fired power plant in Central Java.

Sumitomo plans to double the capacity of Tanjung Jati B to 2,640 MW from 1,320 MW at present.

"The office of State Minister of State Enterprises has approved of the plan, therefore the construction of the power plant can be started," Director General of Electricity at the Ministry of Energy and Mineral Resources J. Purwono said on Friday.

The investment is expected to be around US$1.2-1.5 billion. Most of the funds will be provided by Japan Bank for International Corporation (JBIC) and the rest by foreign or Indonesian banks, he said.

The construction will be started in early 2009 and is expected to be completed in the next three years.

Sumitomo, through its wholly-owned unit PT Central Jawa Power will sell the electricity to PLN at the price of $4.3 cent per kwh. "Next week, the power purchase agreement (PPA) for the project will be signed," he added

Indonesia coal firms to pay $65.5 mln in taxes -audit official

2008-09-03T15:40:00.003+07:00

Five Indonesian coal firms whose executives were banned from travelling due to unpaid royalties, agreed to pay a total of 600 billion rupiah ($65.5 million) in order to settle the dispute, an audit official said on Monday.

Indonesia, the world's largest exporter of thermal coal, slapped a travel ban on 14 executives from six different coal firms including units of Bumi Resources BUMI.JK and Adaro Energy ADRO.JK, the country's two biggest coal producers, following a tax dispute.

"The coal contractors have agreed to pay 600 billion rupiah as a guarantee to settle their obligation to the government and as a show of good will," Didi Widayadi, chairman of the Financial and Development Supervisory Board, told reporters.

So far only five of the six companies affected by the dispute have agreed to settle, he said.

Bumi's units PT Arutmin Indonesia and PT Kaltim Prima Coal have agreed to pay 100 billion rupiah and 150 billion rupiah respectively, while Adaro Energy has agreed to pay 150 billion rupiah, Widayadi said.

Another firm, PT Kideco Jaya Agung, will pay 110 billion rupiah, while PT Berau Coal has agreed to pay 90 billion rupiah, he said.

Altogether, the six coal producers had withheld a total of 7 trillion rupiah of royalty payments related to coal sales between 2001-2007, according to government data, to offset what they regarded as unfair payments of value added tax.

The government will audit the royalty payments to determine whether the amount is correct, Widayadi said.

Widayadi did not say whether the travel ban would be lifted once the companies paid the guarantee, as that will be decided after the government audit.

Producers have argued that under their coal contracts they are not subject to new tax policies brought in after the documents were signed, including value added tax.

Indonesia expects to produce 205 million tonnes of coal in 2008, with domestic demand seen at 52 million tonnes and the remainder to be exported, energy ministry data showed.

Top global resources firms such as Freeport-McMoRan Copper&Gold (FCX.N: Quote, Profile, Research, Stock Buzz) operate in Indonesia, which wants to attract more foreign investment in the mining sector. However, many investors complain of uncertainty over mining laws and contracts, as well as graft and red tape.

source: Reuters 01 September 2008

Berau Coal delays IPO plan until next year

2008-09-03T15:27:00.001+07:00

PT Berau Coal, the country's fifth largest coal producer, has delayed its initial public offering (IPO) plan until next year due to unfavorable conditions in the country's capital market, Investor Daily reported on Monday.

The company's president director Bob Kamandanu said in Jakarta late last week that the company would launch its IPO plan in the first quarter of next year instead of this year as originally scheduled.

He said that the company decided to delay the IPO plan due purely to the bearish condition in the local capital market.

Berau has secured contracts to develop there coal mine areas in East Kalimantan covering total concession areas of 118,000 hectares, of which about 40,000 hectares have begun production. Total proven reserves reach 200 million tons.

Bob said that the company planned to develop a new mining site in the province next year in order to meet the company's higher production target.

News Source : September 01, 2008 / Petromindo.com

Taipower gets 19 offers for coal cargoes - source

2008-08-28T08:29:00.001+07:00

State-run Taiwan Power Co (Taipower) has received 19 offers of sub-bituminous coal cargoes in a recent tender for 9 panamax-sized shipments, a trading source who offered coal into the tender said on Monday.

But all the offers submitted exceeded Taipower's ceiling price, which was set at about $160 a tonne on an evaluated cost and freight (C&F) basis, the source said.

The tender was seeking 630,000 tonnes of thermal coal for delivery between late September and December this year.

source: Reuters 25 August 2008

Russia coal exporters told to prioritise domestic supply

2008-08-28T08:26:00.002+07:00

Russian coal exporters were told by Deputy Prime Minister Sergei Ivanov to prioritise domestic coal supply for the balance of this year over exports at a meeting held on August 7, coal industry sources said.

Russian power plants have extremely low stocks of coal and the lowest hydro reserves for decades.

There are not enough rail cars available to move domestic coal and coal for export so to avoid power cuts domestic coal supply must be given priority, exporters were told.

Russian state rail monopoly RZhD has already cut the availability of rail cars for movement of export coal from the Kuzbass in Siberia by up to 50 pct.

Exporters rushed earlier this year to rent or buy private rail cars to move export coal. (Reporting by Jackie Cowhig)

China to bolster coal price cap enforcement -paper

2008-08-28T08:20:00.003+07:00

China will strengthen enforcement of its price cap on thermal coal to curb prices of the fuel, the official China Securities Journal reported on Wednesday.

The National Development and Reform Commission (NDRC), the country's powerful economic planning body, also foresees tighter coal supplies in central and southwestern China as hydropower generation falls in the winter, the paper said.

It gave no details on what measures would be adopted.

China has struggled with severe power shortages this summer, with power generators reluctant to build coal stockpiles as prices of the fuel rose while state-capped power tariffs also discouraged increased generation.

Although the power crunch has eased since the government raised power tariffs and as the summer draws to an end, worries are now mounting over supplies to meet heating demand in the winter.

The NDRC capped thermal coal prices at June 19 levels and asked coal miners to deliver fully on term contracts.

The market price continued rising until the commission expanded the scope of the price cap at the end of July, but prices have only slid marginally since then, and many power plants have been complaining about the falling quality of coal.

The government is also planning a cash reward to miners with a high level of coal output, the Beijing News, a regional newspaper, reported on Wednesday.

Reuters - 27-Aug-08

Bayan's PIK resumes coal mining operations

2008-08-25T17:07:00.001+07:00

IDX-listed coal mining firm PT Bayan Resources said on Friday that mining operations of its East Kalimantan unit PT Perkasa Inakakerta (PIK) has returned to normal as the local authorities has lifted a blockade on haul road, The Jakarta Post reported.

Bayan director Jenny Quantero haul road that had been blockaded for 12 days by forest rangers since August 10 had been reopened coal transportation from mine to port had resumed.

Rangers closed PIK's haul road after interim East Kutai Regent Irsan Noor ordered PIK to halt its operations in some of their concessions in East Kutai, claiming it had violated the Forestry Law by operating in an area without a proper license.

Jenny said the blockade did not damage the company's coal production.

"Our distribution was disrupted slightly (because of the road block), but overall our production remained fairly normal. The blockade had no impact on Bayan's total production as PIK is a new mine and is not one of our major production sources."

PIK begun operating in April 2007 in an area covering more than 20,037 hectares, and is one of several mining subsidiaries of Bayan.

News Source : August 23, 2008 / Petromindo.com

Bumi Resources estimates productions stoppage costs KPC 74,000 tpd

2008-08-25T17:00:00.001+07:00

IDX-listed coal mining house PT.Bumi Resources estimates to suffer production loss of 74,000 tonnes per day after East Kalimantan regency administration ordered partial production stoppage the mining pits operated by its subsidiary PT.Kaltim Prima Coal (KPC).

The company revealed in an analyst presentation posted at the Indonesian Stock Exchange on Friday that under the worst case scenario, KPC's Melawan Khayal, Belut and Beruang pits operated by Thiess Contractors Suffered production loss of 39,000 tonnes per day. Pelikan and Macan pits operated by PT.Pama Persada Nusantara suffered 16,000 tpd, while Bengalon coal hauling operated by PT.Darma Henwa suffered 19,000tpd. The company, however, said that as per August 21, 2008, Bengalon coal hauling has been back in operations.

Local government backed by local police has ordered production and hauling stoppage at some of KPC's mining area since August 8, 2008, on the ground that some of the company's mine are located in forestry area.

Bumi said KPC would compensate production loss by intensifying mining at other pits.

Bumi CEO Ari Hudaya told Petromindo.Com on Friday that thus far, the company has no intention to declare force majeure to its customers as KPC is still able to meet its obligations.

News Source : August 22, 2008 / Petromindo.com

Adaro sees steep increase in 2009 coal selling prices

2008-08-25T16:43:00.002+07:00

South Kalimantan coal miner PT.Adaro Indonesia expects its 2009 average selling price to increase to US$52-65 per tonne (FOB) from $39-39 this year.

Parent company PT.Adaro Indonesia revealed in a presentation released Friday that coal production would also be increased to 42-45 million tonnes next year from 38-39MT this year.

Adaro Indonesia sells most of its coal production under long-term contracts.

News Source : August 25, 2008

Vietnam plans to hike duties on crude, coal exports

2008-08-25T10:59:00.001+07:00

Vietnam's Finance Ministry has proposed to more than double the export tariff ceilings on crude oil and coal to save more for domestic consumption.

Under the proposal, the maximum tariffs imposed on crude oil and coal exports would rise to 50 percent and 45 percent respectively from 20 percent now. "The increases in these exportable items to the maximum levels are aimed at limiting 'the bleeding' of natural resources," the Ministry said in a report seen on Thursday. The ceiling for export tax on rice would be 40 percent instead of 30 percent now, it said but did not give any timeframe for the new tariffs.
In April Hanoi raised the export duty on coal to 15 percent from 10 percent and doubled that on crude oil to 8 percent as part of its efforts to curb exports and save the fuel for power plants and future oil refineries.

The Southeast Asian country is struggling to meet soaring energy demand at home and plans to slash coal export this year, mainly to China, by more than 32 percent to about 22 million tonnes. It also plans to halve crude exports, now averaging around 300,000 bpd, by the end of next year, to feed its first refinery, the 140,000-bpd Dung Quat plant scheduled to open in 2009.

The government has said it wanted to have at least three major oil refineries by 2015 to stop importing oil products.

This week the ministry also proposed to raise taxes on production of natural gas and mining of manganese, steel, lead, zinc, copper and tin to between 10 percent and 30 percent

source: Reuters 21 August 2008

Prominent India coal trader Bhatia International steps up Richards Bay imports

2008-08-21T10:23:00.002+07:00

Bhatia International, one of the largest coal trading house in India, is aiming to deliver 5 million mt of South African coal to customers in India during the 2008-09 financial year, a 20% increase on the 4 million mt the India-based trading company imported from South Africa in the last financial year.

South African coal imported by Bhatia is destined mainly for Indian sponge iron and steel producers and cement plants which prefer higher quality Richards Bay steam coal over cheaper Indonesian coals. "We are planning to import 5 million mt from South Africa in the financial year 2008-2009. Our company imported 4 million mt of South African coal to India last year," said Bhatia International director Aman Bhatia.

South Africa shipped 66.1 million mt of coal from Richards Bay in 2007 and India has had a growing presence in this market. One coal market analyst commented that extra Indian demand could become an issue for South African coal suppliers. "There is the Eskom power situation, issues with running the railway line and existing contracts going into Europe," the analyst said.

Bhatia said South African coal is becoming an increasingly attractive proposition to coal customers in western India for reasons of distance and quality.

"For the western side of India, its closer to South Africa and customers [there] buying from South Africa benefit in terms of price and quality," said Bhatia. There was a potential saving of between $2-$3/mt on imports of South African coal landed on India's west coast compared to India's east coast. Higher prices demanded by South African coal sellers, currently around $160/mt FOB Richards Bay on the spot market, seem not to be deterring a good number of Indian buyers. "Good companies who understand coal don't mind paying the price for South African coal and they prefer South African coal because of its high quality,"he said. But he conceded that South African coal was "not easily available" in the current market.

Indonesia's export coal market had grown very fast in recent years, said Bhatia. But he believed Indonesian coal availability for Indian buyers could be limited going forward by a combination of rising domestic demand in Indonesia and Chinese consumption. Indonesian coal exporters had also become "very educated" in terms of market prices and were making increasing reference to Newcastle index prices.

Bhatia International owns a fleet of two panamax- and two handymax-sized bulk carriers and has access to other vessels through long-term time charter agreements. "These ensure we get the best freight rates," said Bhatia.

Australian steam coal has yet to make many inroads into the Indian coal market. Bhatia estimated that not more than 500,000 mt of FOB Newcastle, Australian steam coal entered India last year. Though he believes there is scope for India's Australian coal imports to increase.

It is worth remembering at this point, Coal & Oil's recent deal to increase its imports of Griffin Coal from West Australia to India to 1.2 million mt/year from 650,000 mt/year.

News Source : Issue 882 / August 18, 2008 / Platts-International Coal Report

BHP Profit Rises 15% to Record on Prices, Output

2008-08-20T11:05:00.001+07:00

BHP Billiton Ltd., the world's biggest mining company, said full-year profit gained 15 percent to a record after boosting production to benefit from rising prices.

Net income rose to $15.4 billion, or 275.3 cents per share, for the 12 months ended June 30, from $13.4 billion, or 229 cents a share, a year earlier, the Melbourne-based company said today in a Regulatory News Service statement.

Chief Executive Officer Marius Kloppers, 45, who's pursuing a takeover of Rio Tinto Group in the world's biggest mining industry acquisition, has pledged to spend $85 billion to expand output. BHP set records for annual production of seven commodities, including crude oil, copper, iron ore and alumina.

``The key drivers of this performance are volume growth and higher prices in base metals such as copper, petroleum and iron ore as well as very strong manganese prices,'' said Investec's London-based analysts Kieran Daly and Rebecca O'Dwyer in an Aug. 12 report.

BHP shares rose 62 cents, or 1.6 percent, to A$38.60 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The stock has lost 4 percent this year compared with a 21 decline in the benchmark index.

Author:Bloomberg

Newcastle Coal Gains, Snaps 5-Week Losing Streak

2008-08-20T10:17:00.002+07:00

Power-station coal prices at Australia's Newcastle port, a benchmark for Asia, snapped a five-week losing streak to rise 5 percent after a storm damaged Vietnam's largest harbor and cut exports.

The weekly index of thermal coal prices at the New South Wales port gained $7.74 to $163.90 a metric ton in the week ended Aug. 15, according to the globalCOAL NEWC Index. Prior to that, the measure had dropped 20 percent from a record $194.79 a ton reached in the week ended July 4.

Prices of the fuel may rebound after a cyclone damaged the Cam Cha port in Vietnam, the largest supplier of coal used in power stations to neighboring China, analysts at Macquarie Group Ltd. said in an Aug. 8 report. Vietnam accounts for about 3 percent of global seaborne coal supply and the port closure may cut exports by as much as 12 million tons, they wrote.

``It is still digesting lower Vietnamese coal this year,'' said Mark Pervan, a senior commodity analyst at ANZ in Melbourne. Thermal coal is still the bank's preferred commodity, it said today in an e-mailed report.

Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle.

The weekly globalCOAL index is up 83 percent so far this year. The monthly index for July gained 13 percent to $184.51.

``When you look at the fundamentals for thermal coal versus other commodities, it stacks up the best out of any of them,'' Pervan said today. ``It really comes down to tightening Chinese supply and that's the one market where China's tightening supply has a big influence on prices.''

Author:bloomberg

On-grid energy price hike to take heat off power firms

2008-08-20T10:12:00.001+07:00

China raises on-grid electricity tariffs Wednesday, in a move to reduce domestic power producers' losses and help boost supplies.

The on-grid price of power supplied by the country's coal-fired plants will rise by 0.02 yuan (0.28 US cent) per kWh - an average of 5 percent - beginning today, the National Development and Reform Commission (NDRC) said on its website yesterday. The retail power price will remain unchanged.

The government will continue its price controls on coal used for power generation, said the NDRC, the country's top economic planning body.

Analysts said the move would help ease the difficulties faced by the country's power firms, whose profits have been squeezed by soaring coal prices.

"Rising coal prices have put great pressure on the country's power plants as well as electricity supplies across the country," said Xue Jing, director of the department of statistics and information under the China Electricity Council (CEC).

According to the CEC, thermal coal prices at Qinhuangdao, one of the country's major ports for coal delivery, increased by over 300 yuan ($43) per ton between April and June.

Soaring coal prices have plunged most of China's power companies into the red. The country's five leading power firms, Huaneng, Datang, Guodian, Huadian and China Power Investment all said their power generation businesses are expected to suffer losses in the first half of this year.

Figures from the National Bureau of Statistics showed that in the first five months of this year, total profits in the country's power sector were 17.28 billion yuan ($2.47 billion), down from 59.23 billion yuan ($8.46 billion) in the same period last year.

The country's coal-fired power plants incurred losses of 2.29 billion yuan ($327 million) from January to May, down 108.54 percent year-on-year.

( Source: China Daily/COALWorld.net 2008-08-20 )

Australia's Newcastle Coal Gains, Snaps Five-Week Losing Streak

2008-08-19T14:12:00.002+07:00

Power-station coal prices at Australia's Newcastle port, a benchmark for Asia, snapped a five- week losing streak to rise 5 percent after a storm damaged Vietnam's largest harbor and cut exports.

The weekly index of thermal coal prices at the New South Wales port rose $7.74 cents to $163.90 a metric ton in the week ended Aug. 15, according to the globalCOAL NEWC Index. Prior to that, the measure had dropped 20 percent from a record $194.79 a ton reached in the week ended July 4.

Prices of the fuel may rebound after a cyclone damaged the Cam Cha port in Vietnam, the largest supplier of coal used in power stations to neighboring China, analysts at Macquarie Group Ltd. said in an Aug. 8 report. Vietnam accounts for about 3 percent of global seaborne coal supply and the port closure may cut exports by as much as 12 million tons, they wrote.

Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle.

The weekly globalCOAL index is up 83 percent so far this year. The monthly index for July gained 13 percent to $184.51.

Source : Bloomberg

China raises coke export tariff rate to 40%

2008-08-19T10:29:00.002+07:00

China is to raise the coke export tariff rate to 40 percent as of August 20, up from 25 percent, said the State Council's customs tariff commission on Friday. This move aims to ease a tight coke supply in domestic markets and to contain export of products with high pollution and energy cost.

China is the world's biggest coke exporter, which accounts for 60 percent of the coke trade volume.

Despite some western country's move in reducing coke production for environmental reasons, China's coke exports have continued to increase in recent years.

Coke exports surged to 14.50 million tonnes in 2006, representing an increase of 14 times in 15 years since 1991. The figure hit a record 1.66 million tonnes in May this year.

The nation's coke exports, however, hit a turning point in July, when the government decided to adjust its export policy to tackle the problem. Coke export in July fell to 830,000 tonnes, down 10 percent year on year.

China's move in raising export tariffs indicated that the government had made its decision to reduce coke exports, said market analysts.

( Source: Xinhua/COALWorld.net 2008-08-18 )

Vietnam's coal exports to China to fall this year

2008-08-19T09:52:00.002+07:00

The volume of Vietnam's coal exported to China this year is estimated to drop by some one-third because a port in Vietnam's biggest coal hub has been damaged by a recent storm, local newspaper Pioneer reported Friday.

The volume is likely to decline by eight million tons, because three out of four cargo-loading facilities at the Cam Pha port in northern Quang Ninh province, the coal hub, have been heavily damaged, the newspaper quoted Citigroup Inc, a major American financial services company, as reporting.

According to Macquarie Group, a diversified international provider of banking, financial, advisory and investment services based in Australia, the volume can drop by up to 10-12 million tons.

Vietnam supplied the world market with nearly 14.5 million tons of coal worth $811 million in the first seven months of this year, down 22.7 percent in volume but up 38.4 percent in value against the same period last year, according to the country's General Statistics Office.

Vietnam is lessening the export of such fossil fuel as crude oil and coal to ensure sufficient supplies for oil refineries and energy-thirsty industries like electricity and cement.

Vietnam will, under a recent national coal development strategy, produce 48-50 million tons of coal in 2010, and complete exploration of new coal mines in the northern Red River Delta by 2015. Using more advanced technologies in all stages of coal production, it will churn out more high-quality coal, and affect the environment less.

( Source: China Daily/COALWorld.net 2008-08-18 )

China's coal exports seen falling after tax hike

2008-08-19T09:37:00.004+07:00

China's coal exports could fall further in September as higher export taxes take effect, pushing up international prices and giving Australian producers a stronger hand in upcoming contract negotiations.

China, the world's largest producer and consumer of coal, on Friday said it would impose an export tax of 10 percent on thermal coal starting Aug. 20, as it seeks to ease a severe power shortage that has forced half the nation to ration electricity.

"The move will greatly reduce exports on the spot market. Besides the term contracts, there will be very little exports." said Judy Zhu, an analyst at Standard Chartered Bank in Shanghai.

China also raised taxes on coking coal and coke, key ingredients in steel making.

The introduction of the export tax on coal would give Chinese producers such as Shenhua Energy and China Coal Ltd less incentive to sell spot coal cargoes abroad, and they could soon raise term prices, traders said.

Coal exports had already slumped by a third in July from June as international prices fell from record highs, although shipments in the first seven months of the year are up 5 percent from a year ago as Chinese producers took advantage of the gap between lagging local prices and hot overseas markets.

"This is yet another indicator that China's supplies will be tighter than we had initially expected and should be a boost to Asian coal prices," said Mark Pervan, a senior commodities analyst at the Australian & New Zealand (ANZ) bank in Melbourne.

Steam coal prices at Australia, a benchmark for Asia, snapped a five-week losing streak last week, rising $7.74 to $163.90 a tonne amid supply disruptions in Vietnam and Indonesia after falling from a record $201 a tonne in early July.

By crimping China's coal exports from September, the higher taxes are likely to raise international prices. That could give Australian producers an edge in upcoming contract negotiations with Japanese and South Korean utilities, analysts said.

"Although China's coal export volume is small, it is very important for Japan and South Korea," said a Beijing-based trader.

China, which shipped around 7 percent of globally-traded coal supplies in 2007, exported 30.28 million tonnes in January through July.

"If Japanese and South Korean users cannot get Chinese coal, they will have to buy coal from Indonesia, Australia and Russia, pushing up prices in those markets."

Chinese coal prices were steady on Monday after the announcement. The price at Qinhuangdao, China's top coal shipping port, remained around 1,000 yuan ($145.6) a tonne, traders said.

COKE PRICE TO JUMP

China also raised the export tax on coke to 40 percent from 25 percent, and on coking coal to 10 percent from 5 percent, as extremely tight supply this year has pushed up the prices of coking coal and coke.

"International prices will surge as a result, as China exports nearly half of the world's coke," said Lu Ping, an analyst at China Merchants Securities. He estimated that China's coke export price could hit $1,000 a tonne, up from $700 a tonne currently.

China exported 8.3 million tonnes of coke in the first seven months of 2008, down 8.3 percent from a year earlier. It has issued a total 12.01 million tonnes of export quotas for 2008.

But the tax hike is unlikely to solve the coke shortage in China, which produced 329 million tonnes in 2007 and exported 15 million tonnes.

"There would be at most an extra 4 million tonnes of coke staying in China. It's not a big amount," said Lu.

(Source:Reuters)

Enel buys 10 percent of Indonesian coal producer Bayan Resources

2008-08-13T09:43:00.002+07:00

Enel SpA has bought a stake of about 10 percent in Indonesian coal producer Bayan Resources in a move aimed at securing coal supply contracts, the daily Il Corriere della Sera reported.

The Italian power company bought the stake in an initial public offering and paid 150 million euros, the newspaper said, citing rumours circulated on the Indonesian market.

Indonesia is Enel's largest coal supplier and it is followed by South Africa, Colombia, Russia, and Australia.

Indonesia Orders Six Companies to Halt Overseas Sales of Coal

2008-08-13T09:39:00.002+07:00

Indonesia, the world's biggest exporter of power-station coal, has ordered six companies to halt all overseas shipments because they are charging too little for the fuel.

The companies, whose combined annual exports reach 9.3 millions metric tons, have stopped exporting coal since July, said Bambang Gatot Ariyono, director of coal and mineral resources at the energy ministry. The companies have long-term contracts to sell coal at an average price of $34 a ton, he said.

Coal prices at Australia's Newcastle port, a benchmark for Asia, were at $156.16 a ton in the week ended Aug. 8, according to the globalCOAL NEWC Index. Indonesia, which gets a 13.5 percent cut from all coal sales, plans to mandate that export prices be higher than its proposed monthly benchmark. The government is still in the process of creating its price index.

``They can resume export once they've agreed on higher prices,'' Ariyono said. Three of the companies have agreed to raise prices, he said, without elaborating.

The companies told to suspend exports are PT Antang Gunung Meratus, PT Sumber Kurnia Buana, PT Kadya Caraka Mulia, PD Baramarta, PT Bangun Dahva Persada and PT Tanjung Alam Jaya.

The government may require coal miners to renegotiate long- term contracts if they set their prices ``too low,'' Bambang Setiawan, director general of coal and mineral resources at the energy ministry, said on Aug. 6.

Source: Bloomberg

Coal Price - Global Coal Index - 12 Aug 2008

2008-08-12T14:02:00.005+07:00

China Govt considers coal sector restructuring

2008-08-12T13:57:00.002+07:00

The National Energy Administration is planning to promote more mergers and acquisitions in the country's coal industry in an effort to intensify the government's macroeconomic control and deal with overexploitation and over competition in the industry.

"Guidance of mergers and acquisitions in the coal industry has been submitted to the State Council and we're waiting for the approval," an official from the National Energy Administration said.

Industry insiders regarded it as a signal for a new round of reshuffling in China's coal sector.

Kang Rong, an official with China National Coal Association told China Daily the government has been considering regrouping the industry for a while, but was yet to take efficient action.

As early as 2005, the State Council issued the advice on improving the healthy development of China's coal industry, vowing to construct large coal mining bases and form large coal enterprise groups.

The government was alerted when it ran into difficulties in allocating coal to support regions struck by the blizzard early this year, Kang said.

State-owned coal firms aside, many others put their own interests ahead of the county's urgent demands, he added.

According to the State Electricity Regulatory Commission, the coal reserve in the country's big power plants was 43.81 million tons, merely enough to support 11 days of normal operations.

Facing such a severe coal shortage, the country urgently needs to improve its unitization rate of coal. While, the large coal enterprises are much more efficient in mining than small ones, as more than 80 percent of their mines have been fully exploited, compared to 10 to 15 percent for small coal producers which led to serious wastes, he said.

As for construction, large coal mines have always been well equipped. They have advanced mining technologies, transportation and other supporting facilities, he said.

He also said that large coal mines have reclamation plans after mining, and they pay considerable attention to environmental protection issues such as appropriate utilization of underground water.

He suggested the government should start with the consolidation of coal reserves in a bid to make rational exploitation plans and put them into use. ( Source: China Daily/COALWorld.net 2008-08-11 )

China July Coal Exports 4.78 Million Tons

2008-08-12T13:54:00.001+07:00

China exported 4.78 million metric tons of coal in July, preliminary data released Monday by the General Administration of Customs showed. China's coal exports during the first seven months accumulated to 30.28 million tons, up 4.9% from the same period last year, the data showed.

China's coke and semi-coke exports totaled 830,000 tons in July, while January-July exports were down 8.3% on year at 8.27 million tons, according to the data.

No on-year percentage figures for July alone were provided. ( Dow Jones/coalworld.net 2008-08-12 )

International Power signs Power Purchase Agreement for 815MW Paiton plant expansion in Indonesia

2008-08-08T09:21:00.002+07:00

International Power plc is pleased to announce the signing of a 30-year PPA between PT Paiton Energy and PT PLN (Persero), the Indonesian state utility, for the new 815MW, coal-fired Paiton 3 plant in Indonesia. International Power has a 40.5%* interest in PT Paiton Energy.

The Paiton 3 project comprises a single 815MW super-critical coal-fired unit which will be located within the existing Paiton complex, and is expected to be fully operational in 2012. The project has a fixed price contractual arrangement, with the main equipment supplied by Mitsubishi Heavy Industries, Ltd. As a result of its close proximity to the existing plant, Paiton 3 will benefit from shared facilities such as the coal jetty, coal stockyard and waste water treatment plant.

The plant will be operated by PT IPMOMI, the operator for the existing Paiton plant, in which International Power has a 59.5%* interest.

Philip Cox, Chief Executive of International Power, said, "Strong economic growth in Indonesia has led to a significant increase in power demand and a requirement for new generation capacity. The Paiton 3 project will provide much needed additional capacity on the key Java-Bali grid, and will deliver an attractive return on investment for our shareholders. This project demonstrates International Power's ability to capitalise on opportunities in emerging markets."

The total project cost is estimated to be approximately US$1,450 million (STG732 million), which will be funded by a mix of project finance debt and equity in line with comparable long-term PPA projects in the region. International Power's equity investment will be funded from current liquid resources. Financial close is expected in the first quarter of 2009.

Notes to Editors:

PT Paiton Energy is owned by International Power 40.5%*, Mitsui 40.5%*, TEPCO 14%, PT BHP 5%

PT IPMOMI, is owned by International Power 59.5%*, Mitsui 25.5%*, TEPCO 15%.

* These ownership percentages include interests held via IPM Eagle LLP, a 70/30 partnership between International Power and Mitsui. International Power's 40.5% interest in PT Paiton Energy also includes a 9.2% economic interest, acquired from Mitsui.

An exchange rate of STG1: US$1.98 has been applied in this announcement.

About International Power

International Power plc is a leading independent electricity generating company with 33,048MW gross (20,858MW net) in operation and 2,971MW gross (875MW net) under construction. International Power has power plants in operation or under construction in Australia, the United States of America, the United Kingdom, the Czech Republic, France, Germany, Italy, the Netherlands, Portugal, Spain, Turkey, Bahrain, Oman, Qatar, Saudi Arabia, the UAE, Indonesia, Pakistan, Puerto Rico and Thailand. International Power is listed on the London Stock Exchange with ticker symbol IPR.

Coal shortage: Coal India Ltd finds fault with power sector

2008-08-07T16:59:00.002+07:00

There seems to be no end to the confusion and controversy over the real reasons behind the coal shortage at large number of power plants across the country.

While arguments galore criticising the role of Coal India Ltd – catering to 80 per cent of country’s coal requirement – (and railways) in creating the crisis, the Indian coal major on the other hand blames the power sector for practically inviting the trouble.

According to Mr Partha S Bhattacharyya, Chairman of CIL, while the coal major has supplied 95 per cent of the promised quantities during the first four months, it is lower imports than promised by the power sector in the annual action plan, prepared by both the ministries, has made all the difference.

“During the first four months CIL has supplied 95 per cent of the targeted 22.5 million tonnes to power sector during the first four months. On the other hand, power sector imported only 2.5 million tonne coal, 56 per cent less than the targeted 5.7 million tonnes during the period,” he said.

According to CIL, considering that the heat value of imported coal is generally one and a half times of the Indian thermal coal, the real impact of the shortfall is higher than perceived.

The root cause, CIL sources suggest, may be over dependence of power sector on short-term domestic coal linkages due to zooming global prices vis-À-vis low cost of coal in the regulated Indian market. Short-term (or spot) supplies are made by CIL on availability basis and without any contractual obligation.

Thermal coal is currently available (spot) in the global market at $130-140 a tonne, almost double than the corresponding period last year. In comparison, the best quality thermal coal sold by CIL is priced between $25-50 a tonne at the prevailing exchange rate.

Interestingly, there seems to be tougher time ahead for the power sector. According to Mr Bhattacharyya, even if the imports are stepped up in the remaining part of the year, lower availability of wagons post monsoon may pose further hurdles

Source: www.thehindubusinessline.com 07 August 2008

Richards Bay Coal Exports Reach Lowest Since January

2008-08-07T14:28:00.002+07:00

South Africa's Richards Bay Coal Terminal, the world's biggest coal-export facility, in July shipped the lowest volume of coal since January.

The terminal, on South Africa's northeast coast, exported 4.17 million metric tons of coal last month, 25 percent less than the 5.57 million tons shipped a year earlier. Exports in June were 5.15 million tons. No reason for the decline was given in an e-mailed statement today.

The terminal got 5.44 million tons by rail during the month, up from 4.72 million tons in June. Stockpiles rose to 3.33 million tons, from 2.06 million tons. The terminal targets stockpiles of 3 to 4 million tons and has the capacity to store about 6 million tons.

The price of coal exported from the port fell 12 percent, the biggest drop in at least eight years, to $148.15 a ton in the week ended July 25, according to McCloskey Group Ltd.

Richards Bay Coal is owned by South Africa's biggest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. While it's the world's biggest coal-export terminal, Australia's Newcastle port ships more of the fuel from two terminals.

At the current average monthly rate, Richards Bay will ship 58.58 million tons of coal this year compared with capacity of 76 million tons. Smaller volumes of South African coal are exported from Durban as well as from Maputo in neighboring Mozambique.

During the month, 644 trains arrived at the terminal and 45 ships were loaded, down from 60 in June, Richards Bay said.

South Africa is the biggest supplier of coal to European power plants.

Source :Bloomberg

Ports - 31 July 2008

2008-08-07T14:08:00.003+07:00

Ports - 31 July 2008
• Australia 14 coal producers including BHP Billiton, Rio Tinto and Xstrata have submitted a plan to the NSW government to expand coal shipping capacity at Newcastle up to 210Mtpa by 2013 and are prepared to contribute private loans totalling $2.5B. Current installed capacity at Kooragang & Carrington is 102Mtpa.

• PWCS reports Newcastle loaded 1.602Mt in the week to 28 July 2008 (83.8Mtpa pace). Thirty one vessels were waiting to berth and average turnaround time was 14.9-days.

Coal Price and Market - July 31, 2008

2008-08-07T13:45:00.005+07:00

PRICES AND MARKETS - JULY 31, 2008
• Australia Thermal GlobalCOAL trades in past week.

• China Coke The current spot export price for 12.5% ash metallurgical coke is reported to have reached US$745.00/t.

• Europe Thermal On 28 July 50kt Phys ARA (DES) (Oct’08) traded at US$182.00/t and 75kt (Q1’09) traded at US$180.00/t. On 29 July 50kt (Oct’08) at US$184.00/t and on 30 July 50kt (Oct’08) traded at US$186.50/t (ACPRS & Ams/Rot).
• Japan Semi Soft Coking According to Japanese sources the price of semi soft coking coal for JFY08 is heading towards settlement at just above US$240/t FOB. JFY07 contract prices for semi soft were in the range US$63/t to US$64/t.
• South Africa Thermal On 28 July 75kt Phys RB1 (Mar’09) traded at US$150.00/t & 75kt (Jun’09) at US$150.00/t.

• Barlow Jonker Index: Down US$6.85/t FOB. Down A$5.21/t FOB.
BJ SPOT US$/t INDEX A$/t INDEX
24-Jul-08 168.20 525.6 175.45 392.3
31-Jul-08 161.35 504.2 170.24 380.6

Straits Asia sells '09 sub-bituminous coal at $110/T

2008-08-07T11:14:00.000+07:00

Singapore-listed miner Straits Asia Resources Ltd and a North Asian (South Korean PP) utility have settled a 2009 sub-bituminous thermal coal contract at about $110 a tonne, up about 83 percent from a year ago, a source with knowledge of the matter said on Tuesday.

The contract, signed late last month, was for 600,000 tonnes of sub-bituminous coal for delivery beginning in February 2009.

The settlement price is up from about $60 last year, the source said. The supply contract was for coal with a calorific value of less than 5,500 kcal/kg on a gross as received basis (GAR).

Shares in Straits Asia were down 7.7 percent at A$2.39 by 0629 GMT, compared with a 1.8 percent decline in the broader Straits Times index .FTSTI.

Traders said the agreed price was close to market levels at the time, and Straits Asia had benefited from sealing the contract early as coal prices has fallen sharply in the past few weeks.

"The market price for similar quality coal would probably be about $95 now," said a Singapore-based trader.

Prices of top-grade Australian thermal coal, a benchmark for Asia, struck a record high of $201 a tonne on July 1, but have since lost about $40 due to tepid demand and falling oil and gas prices.

The price for top-grade thermal coal in Australia has jumped nearly 80 percent from the start of the year to about $160 a tonne, based on globalCOAL's latest weekly NEWC index.

East Kutai regency stops "small part" of KPC, PIK mining operation

2008-08-05T13:37:00.001+07:00

The East Kutai regency administration in East Kalimantan has ordered the suspension of a small part of the operation of two coal mining companies, PT Kaltim Prima Coal (KPC) and PT Perkasa Inakakerta (PIK) on charges that they operate in forest areas without permits, Republika reported on Monday.

KPC is a coal unit of Bumi Resources Tbk, and PT. PIK is a coal unit of PT. Bayan Resources.

The regency's acting regent Isran Noor said last week that the two companies had carried out coal mining activities in a forest concession owned by PT Prodisa Trading.

"We don't stop the operation of KPC and PIK. We only stop activities at location which are illegal," he said.

Based on the regency's investigation, KPC and PIK illegally operate on 2,200 hectares and 300 hectares of land owned by Prodisa respectively.

Bumi Resources' spokesman Dileep Srivastva dismissed the East Kutai regency's accusation that the company had violated the forestry permit was groundless.

According to him, KPC continues to operate as usual despite the local government's request to stop its mining activities. "Our exploration activities runs as normal,".

PLN gets Rp 10 trillion loans from local banks

2008-08-05T08:40:00.002+07:00

Indonesia State owned electricity company PT Perusahaan Listrik Negara (PLN) signed on Tuesday six long-term rupiah-denominated credit facilities totaling Rp 10 trillion (about US$1.1 billion) to develop several coal fired power plants.

The banks would provide the loans through a bilateral and syndicate measures, the firm said in a statement.

The loans will be used to build coal fired power plants in Pacitan, Teluk Naga, Pelabuhan Ratu, Lampung, North Sumatera, West Nusa Tenggara, Gorontalo, North Sulawesi, Riau Archipelago, East Nusa Tenggara, Southast Sulawesi, Central Kalimantan, and Labuan. The power plant projects are part of the power plants to be built under the 10,000-MW fast track program.

"Today's Loan Agreement signing follows the two US dollar buyer credit facilities concluded in January 2008 with China Exim Bank, five rupiah credit facilities with domestic banks in April 2008, and one US dollar buyer credit facilities with Bank of China consortium in May 2008, and represents a further and continuing progress in the fund raising exercise for the 10,000 MW Program ," the firm said.

"These rupiah loans are supported by a government guarantee from the Ministry of Finance," it added.

The firm explained that the credit facility for the Labuan power plant project was the first long-term local currency funding to be concluded by PLN with a local hank in support of the foreign currency portion for the development of the power plant and becomes part of PLN's effort in managing foreign exchange risk.

The local banks include Bank Mega, which will provide loans for the power projects in Pelabuhan Ratu, Lampung, North Sumatera, West Nusa Tenggara Barat, Gorontalo, North Sulawesi Utara, Riau Archipelago, East Nusa Tenggara, South East Sulawesi and Central Kalimantan; and Bank Bukopin (for Pacitan and Teluk Naga power prjoects). Both will provide the loans as bilateral (sole) creditors. Meanwhile, BNI and Bank Rakyat Indonesia will provide a loan for Labuan with the former as coordinating arranger and lender and the latter as co-lender.

In concluding the financing, PLN is advised by HSBC as financial advisor and Hadiputranto, Hadinoto & Partners (HHP) as legal advisor.

The facilities carry a 13-year (Bank Bukopin) and 10-year (BNI and Bank Mega) door-to door tenor including up to 3 years of drawdown period and grace period, consistent with the construction tenor of the power plants and long-term nature of the assets.

"With today's signing, rupiah and US dollar financing for 4 projects in Java will he fully funded, while some of the other projects in outside Java will be funded using the balance of proceeds from PLN previous global bonds

"The next focus will be on concluding the rupiah and US dollar fundings for the projects of which the EPC Contracts have just been signed," the firm said.

PLN further said the projects to financed by the local banks were part of a total of 35 new power plants in Java and outside Java under the 10,000 MW fast track program. The plants will add a total of 4,353 MW of new electricity generation capacity for Indonesia and are targeted for commissioning in 2009 and 2010.

"The success of obtaining these long term loans reflects high level of confidence from domestic bank to support the development of electricity infrastructure in Indonesia. It can then be assured that such loans conclusion will smoothen the financings of the 10,000 MW fast track program," the firm said.

News Source : July 29, 2008 / Petromindo.com

Whitehaven Agrees to New Coking, Thermal Coal Sales Contracts

2008-08-05T08:35:00.003+07:00

Whitehaven Coal Ltd., an Australian producer, agreed to new coking coal sales contracts with Asian steel customers that allow it to boost production.

The company agreed to sell 1 million metric tons of semi-soft coking coal a year at A$250 ($232) a ton for the year started July 1 (Kalau X-trata ke Japanesse Steel settle di 240 usd/t, July 30 2008) , Brisbane-based Whitehaven said today in a statement to the Australian stock exchange. It also agreed to sell 600,000 tons of thermal coal a year at A$135 a ton for 6,000 kcal/kg NAR , it said.

Source: Bloomberg

Indonesia's Berau sees 18 mln tonnes '09 coal output

2008-08-04T14:52:00.002+07:00

Indonesia's fifth-largest coal miner, PT Berau Coal, aims to produce 18 million tonnes of coal in 2009, up a fifth on this year's target, President Director Bob Kamandanu told Reuters on Monday.

Berau, which is forecasting production of between 14.5-15 million tonnes this year, saw a roughly 20 percent jump in its first-half output to around 6 million
tonnes, Kamandanu said.
Although output in the first six months of this year was only around 40 percent of its full-year target, Kamandanu said that production in the second half was normally higher.
'We are aiming to produce around 18 million tonnes next year with a sales volume of around 17 million tonnes,' Kamandanu said adding that sales for 2008 would be around 14 million tonnes.
The firm plans to double its output to 30 million tonnes in five years funded by an investment of $100-120 million over the period.
Berau, which has 299 million tonnes of coal reserves, produced and sold 12 million tonnes of coal last year.

Indonesia, which has surpassed Australia as the world's biggest exporter of thermal coal, expects to produce 205 million tonnes of coal in 2008, with domestic demand seen at 52 million tonnes and the remainder to be exported, according to energy ministry data.
Rising exports from Indonesia are expected to keep a lid on regional coal prices which have risen sharply in the past three years to due limited Australian export growth plus rapidly rising demand from China and India

NDRC's Second Price Control Causes Decrease in Qinhuangdao's Steam Coal Price

2008-08-04T13:36:00.001+07:00

The FOB trimmed prices of several types of steam coal at Qinhuangdao Port has decreased for the first time since the National Development and Reform Commission initiated the controls on coal price for the second time on July 24th, announced Qinhuangdao Port on July 30th. More specifically, the price of Shanxi quality mix coal with calorific value of 5,500 kcal/kg GAR on July 30th declined by RMB30/t or 4.4 USD/t over the previous day to RMB860-1,000/t or around 125.6-146.1 USD/t, while the prices of Shanxi Dahun coal with calorific value of 5,000 kcal/kg and common blended coal with calorific value of 4,500 kcal/kg dropped by RMB35/t and RMB40/t respectively.

Qinhuangdao Price Control Bureau has assigned two people to monitor the transaction price at the Qinhuangdao Coal Shipping Market and has not recorded any transactions that break the price control, said the Bureau on July 29th.

However, analysts said that due to the influence by the supply and demand on the market, the steam coal price will continue to increase in 2009 with the price to stand between the average level of whole of 2008 and the average level of the second half of 2008.

Source : 20080801 / Xinhua Infolink Development Co. Ltd

Indonesian coal exports set to slow, as rising domestic demand bites

2008-08-04T13:10:00.002+07:00

Indonesia's coal exports are set to rise by 10 million mt year-on-year to 204 million mt in the 2009 calendar year although export growth is likely to slow in future years, said a forecast by the Indonesian Coal Mining Council presented to the 4th Coaltrans Australia conference in Brisbane, July 28.

The ICMC represents the largest Indonesian coal producers such as Banpu, Bumi Resources and PT Adaro.

They are confident of achieving a premium of $5-$8/mt over globalCOAL's Phys Newc index prices for their coal in 2008-2009, following a re-rating of Indonesian coal which had previously traded at a discount to FOB Newcastle prices during the previous five year period.

"From 2009 onwards Indonesia will not add to the export market as significantly as before, due principally to domestic demand growth," said Philip Gasteen, head of marketing and logistics for Banpu. The ICMC is forecasting domestic demand of 60 million mt in 2009, up by 6 million mt on 2008.

"Major greenfield expansion and investment is needed to meet demand and match expectations. There has been very little if any greenfield exploration for 20 years," stated Gasteen.

The Indonesian government is planning to build 10,000 MW of new coal-fired power generation by 2010 in its 'Crash' program. But the ICMC believe the Indonesian government is falling behind its target. "The Crash program looks like being delayed. We see it going out to 2012-2013," said Gasteen.

As a result of this delay, the ICMC believe Indonesia's domestic demand will be 37 million mt lower than the Indonesian government's own demand forecast for 2010.

This is because the Indonesian government's Crash program is forecast to consume around 10 million mt/year of Indonesian coal.

News Source : Platts-International Coal Report

India's Power Companies Face Coal Shortages, Press Trust Says

2008-08-04T10:34:00.001+07:00

India's electricity generators haven't been able to meet output targets because of declining coal supplies from local mines, the Press Trust of India reported, citing a power ministry official it didn't identify.

Supply fell short of demand by as much as 14.6 percent during the quarter ended June 30, the news agency reported. Coal companies produced 31.23 million tons during the period, 9 percent lower than targeted, it said.

Coal-fired plants account for 53.3 percent of India's power generation, according to the report.

Source:bloomberg

Shell, BP Look at Origin's Coal Seam Gas Assets, Telegraph Says

2008-08-04T10:04:00.002+07:00

Royal Dutch Shell Plc and BP Plc have approached Origin Energy Ltd. over its coal seam gas assets in Queensland, Australia, the Sunday Telegraph reported, citing unidentified sources.

The move may thwart BG Group Plc's A$13.8 billion ($12.8 billion) hostile bid for Origin, the newspaper said. BP and Shell are both carrying out due diligence on the Australian company, according to the report.

Source: Bloomberg

EU Carbon Permits Fall to Four-Month Low as Coal Demand Drops

2008-08-01T16:44:00.004+07:00

European Union emission permits fell to their lowest in more than four months as German and U.K. coal demand decreased, potentially curbing purchases of the allowances.

EU carbon dioxide allowances for December slid 64 cents, or 2.8 percent, to close at 22.06 euros ($34.40) a metric ton on the European Climate Exchange in London, the lowest since March 28. They reached 23.90 euros earlier today.

Power utilities need fewer than half as many permits to burn natural gas instead of dirtier coal, which is why they may favor gas this year after carbon allowances surged in price.

German coal consumption by power utilities fell 0.2 percent in the first four months of 2008, government figures show. Electricity generated by burning hard coal and lignite, a soft brown coal, dropped to 93.24 terawatt-hours from 93.45 terawatt- hours a year earlier, according to the state statistics office, whose April data is the latest available.

Coal demand in the U.K. fell 7.3 percent in the first quarter. Demand slid to 16.3 million metric tons from 17.6 million tons a year earlier, according to figures from the U.K. Department for Business, Enterprise and Regulatory Reform. Consumption by power generators fell 8 percent to 13.8 million tons, the data show.

The price of carbon dioxide permits for December averaged 22.21 euros a metric ton in the four months through April this year. That's more than 12 times the 1.78-euro price of December 2007 permits in the year-earlier period.

EU, UN Link

Permits fell after Seb Walhain, the Amsterdam-based head of environmental markets at Belgian bank Fortis, said the EU may link its emissions-trading system to that of the United Nations ``sooner rather than later.'' That will give factories and power stations access to cheaper credits.

Walhain's comments came after France yesterday issued EU allowances for 2008 to factories and power stations. The move ``is a sign of confidence in the software and the registries'' that track trades, Walhain said today by telephone. The registries and software are being tested this week.

The European Commission, regulator of the regional carbon- trading system, is making sure its Community Independent Transaction Log interacts properly with the UN International Transaction Log. The UN system is the second-biggest greenhouse- gas trading program, after Europe's. EU factories and power plants can use credits from either program for compliance.

UN certified emission reduction credits for December fell 2.9 percent to close at 17.72 euros a ton, after earlier today trading as high as 19 euros and as low as 17.20 euros, ECX said.

Source:Bloomberg

Macarthur Coal Sales Rise 10% After Ship Queue Drops

2008-08-01T13:36:00.001+07:00

Macarthur Coal Ltd., the world's biggest exporter of pulverized coal, said fourth-quarter sales rose 10 percent after the line of vessels outside Dalrymple Bay Coal Terminal fell, allowing it to ship more coal.

Sales gained to 1.2 million metric tons in the three months ended June 30, from 1.1 million tons a year earlier, Brisbane based Macarthur said today in a statement. A ``significant fall in the queue of vessels'' allowed more shipments, Macarthur said.

Prices for steelmaking coal jumped threefold to a record $300 a metric ton this year as floods in Australia and bottlenecks in port and rail infrastructure constrained supplies. Profit rose as much as 35 percent in the 2008 fiscal year on increased shipments and the sale of a mine, Macarthur said July 10.

``There continues to be strong growth in the steel market,'' Macarthur said. ``This, in conjunction with continued supply shortages due to limited infrastructure and the flooding event in Queensland last quarter, are keeping the demand for metallurgical coal tight.''

Macarthur, 19.9 percent owned by the world's largest steel producer ArcelorMittal, rose 2.7 percent to A$15.15 at the 4:10 p.m. Sydney time close on the Australian stock exchange.

Production fell 4.1 percent to 943,000 tons as its Coppabella mine recovers from the flooding, it said. The mine remains under force majeure, a legal clause that allows a company to miss deliveries because of circumstances beyond its control, it said.

``Operations are gradually recovering and the potential for lifting the force majeure situation will be reviewed in the later in the year.''

Source: Bloomberg

Japanese steel makers and Xstrata agree on price increase for metallurgical coal

2008-08-01T12:58:00.004+07:00

Nippon Steel and four other major Japanese steel makers have reached an agreement with Xstrata for a roughly 3.6-fold price increase for low-grade metallurgical coal, the Nikkei newspaper reported on Thursday.

The paper said that the price increase would raise industrywide costs by some ¥100 billion, or $925.1 million, and that steel makers planned to pass on higher prices to customers like electronics makers and shipbuilders.

A Nippon Steel spokesman declined to comment.

Nippon, JFE Steel of JFE Holdings, Sumitomo Metal Industries, Kobe Steel and Nisshin Steel are expected to seal the price increase deal as early as next week, the paper said.

The contract price for low-grade coal, which Xstrata mines in New South Wales, Australia, will be raised to about $240 per ton in the current business year, the paper said.

Japanese steel makers have also agreed to price increases of 65 percent to 96.5 percent for iron ore. Industry-wide raw material costs will jump to about ¥3.5 trillion in this business year, the paper said.

Bumi 2nd-Quarter Profit Doubles on Higher Coal Prices

2008-08-01T12:54:00.004+07:00

PT Bumi Resources, Asia's biggest exporter of power-station coal, said second-quarter profit doubled as record prices outweighed a drop in sales volume caused by heavy rains on the island of Borneo.

Net income before one-time items climbed to $198.5 million in the three months ended June 30 from $92.9 million a year earlier, Bumi said, citing preliminary figures. The Jakarta- based company booked a $547 million investment gain last year after selling stakes in two mines, it said in an e-mailed statement late yesterday.

Power-station coal prices have more than doubled on rising demand from Asian electricity producers, led by China and India, and as railroad and port bottlenecks in Australia and South Africa curbed supplies. Second-quarter sales gained 44 percent to $830 million, Bumi said.

``Coal prices should continue to be buoyant in the medium term,'' Kim Kwie Sjamsudin, an analyst with BNP Paribas SA, said in a note to investors on July 24. The supply-and-demand balance ``remains tight until 2010.''

Bumi shares have more than doubled in the past year in Jakarta trading, making them the best-performer of the 23 stocks in the Bloomberg World Coal Index.

Coal sales in the second quarter fell to 12.9 million metric tons from 13.8 million tons, Bumi said. The company cut its full-year sales forecast by 1.6 percent to 60 million tons because it may decide to build up stockpiles, Bumi said in the statement.

The company sold less coal in the first half of the year due to ``higher prolonged rainfall'' and some delayed arrivals of new heavy machinery, it said in the statement.

First-half net income excluding one-time items rose to $302 million from $173 million a year earlier. Sales in the six- months ended June 30 climbed 30 percent to $1.49 billion, Bumi said in the statement.

Coal sales fell to 25.4 million tons in the first half of the year from 28.3 million tons, Bumi said.
Source: --

Bumi 2nd-Quarter Profit Doubles on Higher Coal Prices

2008-08-01T12:54:00.003+07:00

GE May Build $3 Billion Australian 'clean coal' Power Plant

2008-08-01T11:09:00.002+07:00

General Electric Co. could sign a deal within months to build a $3 billion ``clean coal'' power plant in New South Wales or Queensland state that would store carbon dioxide underground, the Australian newspaper reported.

GE is in talks with utilities in both states and wants an agreement within the next six months, the newspaper said, citing GE's global clean coal power business head Keith White.

GE is studying a 700 megawatt to 800 megawatt power station that could be operating by 2014 if approved this year, the newspaper said, citing White.

China Customs report urges reining in coal export growth

2008-07-31T13:40:00.002+07:00

Chinese Customs suggested in a latestreport strengthening quota management on coal export to curb therapid growth of coal export. Customs statistics show that China's coal import came to 4.16million tons in May, valuing at 290 million US dollars, up 11.3percent and 77 percent year on year respectively.

At the same time, coal export reached 3.914 million tons in May,valuing at 520 million US dollars, up 14 percent and 160 percent yearon year respectively.

Chinese Customs said the lop-siding of coal price on the Chineseand international markets has restrained the country's coal importand at the same time spurred export motive.

Currently, China's coal demand is on the rise for low level ofcoal stock for power generation, peak coal consumption in the summerand implementation of electricity guarantee measures during the Beijing Olympic period.

In addition, coal export countries have continuously increasedtheir export price.

Therefore, Chinese Customs suggested strengthening macro controland coal export quota management to rein in China's coal export.

The report also suggested that the government should encourage andguide enterprises to explore diversified markets and stabilize supplyby establishing overseas coal supply bases and signing long-term coalsupply contracts.
Source: Chinamining.org/Coalworld.net 2008-07-30

Long way to go on energy conservation

2008-07-31T13:38:00.001+07:00

Although China is moving forward on the road to energy conservation, it still has a long journey ahead if it is to hit its five-year goal of reducing energy consumption and waste by 20 percent, statistics and expert views reveal.

Figures from the first four months of 2008 released this month from the National Bureau of Statistics, National Development and Reform Commission (NDRC) and National Energy Administration paint a gloomy picture of the national and local energy conservation efforts last year.

In 2007 China consumed 1.16 tons of coal equivalent when it produced 10,000 yuan of GDP, a 3.66 percent year-on-year decrease, far below the target annual level of 8 percent set in 2005 as the base year for the country's 11th Five-Year Plan (2006-2010).

"The figures can prove China's efforts to improve energy efficiency, but it's not enough," says Zhuang Jian, senior economist with the Asian Development Bank in Beijing. "China still has a hard time hitting the goal because the economic structure, as well as energy consumption pattern, is difficult to change in a short term."

Authorities also released 2007 energy consumption by provinces.

Beijing took the lead in developing a sustainable mode, as it burned the least amount of coal equivalent, 0.714 tons for 10,000 yuan of GDP last year, a 6.04 percent year-on-year reduction. However, Hainan, with its economy buoyed by tourism, sat at the bottom of the list. It reported a slight 0.8 percent cut.

Central authorities are now holding local officials accountable for their efforts to increase energy efficiency and environmental protection when compared to the goals set by the government.

The central government asked local officials to lower energy consumption per unit of GDP by 4 percent annually until 2010.

"The assessment index should be flexible, not just focusing on the 4 percent annual goal," Zhuang says.

For example, although Hainan only reduced its energy intensity by 0.8 percent, its energy consumption per 10,000 yuan of GDP was less than 0.9 tons of coal equivalent, a very low level compared with other provinces.

"Each province has a special industrial structure, which decides how much potential it has to improve in energy efficiency," Zhuang says.

Many experts and governmental officials pin more hope on 2008, the third year of the five-year plan, and expect China to reach the average level of energy conservation - a 12 percent reduction from the plan's base year of 2005.

The figures also show the country's industries are not on track to shift to an energy efficient sustainable mode.

The productivity of high energy-consuming industries increased overall compared to the same period last year.

Auto manufacturing increased 21 percent, construction of power plants was up 9 percent, crude steel production rose by 21 percent and cement production also jumped 14 percent.

Because of the growing industrial demands, power generation also saw a growth of nearly 16 percent, mostly from coal-burning power plants.

According to NDRC figures, increased investment in high energy consuming industries also saw a rise in pollution emissions in the first four months.

Dai Yande, deputy director of the Energy Research Institute under the NDRC, says: "Rising investment in heavy industries leads to more heavy industries and will make it more difficult for China to lower its energy consumption with industrial restructuring."

The country has also failed to get on track to replace outdated polluting plants because many Local governments are still pursuing short-term economic interests partly because new environment and energy accountability system has yet to be finalized, Dai said.

The accountability system will be added to the development goals and standards that officials are expected to meet or exceed in order to keep their jobs.

For China, which is undergoing rapid industrialization, hitting these goals will also inevitably cause many economic pains, experts said.

For instance, the country will close small inefficient polluting power plants with a combined generation capacity of 13 million kilowatts this year and replace them with larger, more energy-efficient plants

That involves not only a huge investment but also the loss of many jobs.

Though the six-month statistics on GDP and energy consumption are not available yet, policymakers say these preliminary figures point to a worrying trend that calls for a greater sense of urgency.

Worse, as domestic demands have pushed large industries to grow, an increase in heavy exports is stalling the country's progress towards sustainable development.

From January to April, due to rocketing international steel prices, China exported more than 21 million tons of steel, a 132 percent rise over the same period last year. Zinc exports exceeded 160,000 tons, up year-on-year by 198 percent.

Experts say tougher government measures are needed to correct the trend.

They say new taxes, such as fuel taxes and natural resources taxes need to be levied to make better use of natural resources and to reduce energy consumption.
Source: COALWorld.net 2008-07-30

Coal shortage brings fear of electricity crisis in China

2008-07-31T13:35:00.002+07:00

China's sprawling industrial heartland is braced for an electricity crisis as the closure of unsafe coalmines before the Olympic Games and the rising price of coal have left many power stations either without the fuel they need or unable to make a profit.

Energy experts believe that China's coal shortage could trigger its worst spate of blackouts and brownouts in four years, hitting the metals and manufacturing sectors especially hard.

Coal generates 80 per cent of the country's power and has been the predominant fuel of China's economic boom. State energy authorities have given warning of long-term coal deficits at power plants in the world's second-largest energy user. China, also the world's biggest consumer of coal, could continue to face coal-related disruptions into the winter.

Transportation issues, typhoons and widespread pit closures have left many power stations without enough coal to fire their generators.

Across China, 51 power plant units have been closed because of the lack of coal, removing almost 3 per cent of national capacity and prompting electricity rationing in 14 provinces.

Yesterday, the State Grid Corporation of China said that 46 per cent of the stations connected to its grid had coal stockpiles below the official “caution line”, enough to last only seven days.

Central Government is expecting an overall power shortfall of about ten gigawatts over the summer, but the combined forecasts of the country's individual provinces suggest that the real shortage could be more than three times as severe.

The underlying coal shortage is partly linked to China's desire for the success of the Olympic Games. Coalmining in China has long been a notoriously dangerous business and the cause of about 4,000 deaths last year.

A drive to improve safety began months ago, but with the Olympic Games and international scrutiny looming, the Government is particularly keen to minimise the risk of a high-profile mining disaster occurring during August.

Dozens of pits, particularly in Shanxi province, have been closed because they have failed to pass more stringent safety regulations. Officials have promised stricter supervision in July and August, even for those pits that have met the new requirements. Other pits have been closed because of the cost of reducing pollution.

China has faced power shortages before but Andy Rothman, chief China economist at CLSA, said that the potential crisis this summer was different. Previously, China built power stations as demand outstripped the nation's total generation capacity. This time, plants are shutting down because of a lack of coal and hugely inflated prices.

Runaway coal prices have shattered the business models of many power stations, quickly converting profit to loss because of government caps on what consumers pay for their power.

Thermal coal prices have risen by as much as 80 per cent since January. Beijing, meanwhile, allowed power tariffs to rise only 4.5 per cent in June - an increase shared between both the grid and the generators.

Commodities analysts are also factoring in the possibility that China's status as a net exporter of coal could be on the point of reversal. As with other natural resources such as phosphorus, the Chinese Government is increasingly keen to keep more of its coal at home and may consider importing coal to protect domestic supplies.

Analysts added that the coal shortages would skew their ability to forecast Chinese growth at a critical time for the global economy.

source: http://www.timesonline.co.uk 30 July 2008

BHP suspends ops at SAfrica coal mine after death

2008-07-31T13:30:00.001+07:00

Mining giant BHP Billiton's (BLT.L: Quote, Profile, Research) (BHP.AX: Quote, Profile, Research) said it had suspended operations at its South African Klipspruit coal mine after a worker was killed in an incident early on Tuesday, the company said on Wednesday.

BHP said mining had been suspended pending the results of an investigation by BHP Billiton and government authorities, and it was not immediately clear how much output would be lost.

"Mining operations at Klipspruit Colliery have been suspended pending the outcome of the investigation," BHP said in a statement. Another worker was critically injured, BHP said.

Source: Reuters 30 July 2008

China's coal price caps are making energy shortages worse - analysts

2008-07-31T13:17:00.001+07:00

SHANGHAI - Conflict between the power and coal sectors in China is intensifying the coal shortages afflicting the country, and new "emergency" coal price caps may actually have made the problem worse, analysts suggested.

They said recent government measures aimed at making coal more affordable for China's power producers have served only to discourage the mines from maximizing supplies.

"The price control system is actually worsening the long-standing conflict between power plants and coal mines," said a domestic industry analyst who preferred not to be named.

Last winter, the storm-induced coal and power shortages across southern China were believed to have been exacerbated by the power plants themselves. Aggrieved by high coal prices and caps on electricity charges, utility bosses were reluctant to build up stockpiles.

In public, the authorities said that the weather had been the sole cause of their problems, caking power lines in inches of ice and incapacitating delivery networks. However, many observers said that coal shortages would have been less acute if power producers had had the incentive to maintain their inventories at safe levels.

The decision last month to cap the price of coal - as well as raise power tariffs - suggests that the government has paid heed to the utility companies' grievances and redressed the growing imbalance between the coal and power sectors.

But some analysts say the govedrnment failed to fully consider the very worrying possibility that the coal price caps would discourage the country's miners.

Morgan Stanley, in a note to investors, said that the recent price caps could worsen the coal supply gap. If the caps are fully enforced, smaller mines might actually "stop coal production until the price cap is removed at the end of 2008 with an expectation to sell at higher prices later."

This "may intensify current tight supply," the note said.

Underlying all this is the fate of China's small mines, many of of which had been shut down for safety reasons. Earlier this year, the authorities decided that a certain number of "rectified" small coal mines could reopen so as to increase supplies this summer, but the decision doesn't appear to have had much effect.

According to Deng Liangsheng, an analyst with China Merchants Securities, the decision always "lacked feasibility."

"Because reopening mines requires a lot of investment in safety and around two years of renovations, right now more than 60 pct of the mines that have been closed still do not comply with requirements," he said in a note.

"Furthermore, after formally reopening they will probably be forced to close again during the Olympic Games," he added.

In previous years, profit margins in the coal sector were so high - and state vigilance so low - that local officials tended to ignore legal niceties and allow thousands of small and unlicensed mine owners to produce at full capacity or more, leading to frequent catastrophic loss of life in the industry. This year, however, they appear less willing to risk the wrath of Beijing's safety inspectors.

Although the state attempted to tighten the price caps in a new policy document issued last week, market pressures are unlikely to ease.

According to Song Shen, coal analyst with Goldman Sachs, enforcement remains the biggest problem.

While it is comparatively easy for the government to force big coal companies like Shenhua or China Coal to stay within the government-set price range, it still needs to find a way of persuading the smaller operators to boost output despite the risks, Song said.

With power plant inventories down - in some cases - to less than a day of supplies, there are likely to be emergencies, and in an emergency, power plants are likely to pay higher prices now and complain later, said the domestic analyst.

"Coal is scarce and there is a reason why the price is so high," he said.

The market is still waiting for the only plausible long-term solution to the problem: the opening-up of the pricing system for both power and coal.

"Supply tensions and price rises are an accurate reflection of supply and demand and a result of cost pressures," said Merchant Securities' Deng.

"Price caps are not of benefit to the consolidation of the upstream coal sector and in fact protect the backward nature of downstream sectors. They also widen the gap between domestic and international prices and distort normal international trade, and by doing so, effectively subsidize other countries."

Source: Xinhua Finance 30 July 2008

China Announces Emergency Rules to Cut Pollution

2008-07-31T13:12:00.002+07:00

China announced emergency measures to further restrict traffic and shutter industrial production in case of ``extreme'' pollution during the Olympic Games.

Private cars won't be allowed to hit the road if their license-plate number ends with the same digit as the day's date, according to the Ministry of Environmental Protection. Half of all vehicles are already banned each day, depending if the date ends with an odd or even number.

Beijing will also shut down a further 105 polluting factories, the ministry said.

The measures were announced ``in order to effectively implement Olympics environmental pledges,'' according to the statement, which didn't define ``extreme'' pollution.

The neighboring city of Tianjin and the province of Hebei will also limit driving and close more polluting factories such as coal-fired power plants, the statement said.
Source : Bloomberg --

Coal export boom feeds talk of US port expansion

2008-07-31T13:08:00.001+07:00

Plans for a new U.S. coal terminal on the East Coast have been suspended, but expanding U.S. export capacity remains a hot topic due to booming world demand, industry sources said Wednesday.

At a conference in March, Houston-based Kinder Morgan (KMP.N: Quote, Profile, Research) outlined a plan to export coal from docks at Baltimore, Maryland, but dropped the project after storms damaged the site, sources said. Kinder Morgan declined to comment.

"Kinder Morgan did talk about the possibility at Cartagena," said New Jersey-based trader Frank Kolojeski, referring to the international coal conference in Cartagena, Colombia, earlier this year.

There also has been talk about expanding shipments from the U.S. West and Gulf coasts.

Arch Coal Inc (ACI.N: Quote, Profile, Research) Chief Executive Steve Leer last week told analysts that the U.S. West Coast can handle more exports, and Illinois state officials have proposed helping to finance additional Mississippi River capacity.

U.S. coal export capacity expansion is getting a closer look as shipments to Europe and booming Asia soar and other exporting countries face delivery problems.

U.S. exports, less than 50 million short tons two years ago, could reach 80 million tons this year and 100 million tons in 2009 or 2010, according to many estimates.

"The nameplate capacity right now is somewhere north of 140 million tons," said analyst David Khani of FBR Capital Markets.

But systems underused for years can require maintenance or changes to reach capacity, he said. "You don't know whether you can do it until you do it," Khani said.

Market sources said Kinder Morgan aimed to start exporting coal using existing docks and equipment at a steel mill site near Baltimore by the end of this year, hoping ultimately to move 2 million tons a year.

A severe windstorm in early June wrecked an existing crane the plan relied upon, and officials shelved the plan, sources said.

As for the West Coast, Arch Coal's Leer said he thinks the current trickle could grow to 2 million tons a year.

Leer did not name potential West Coast ports, but small amounts have moved out of Richmond, California, and market sources said Stockton, California, is another possibility.

California's biggest ports, Los Angeles and Long Beach, are less talked about because Los Angeles has closed its coal terminal and spare capacity at Long Beach is limited.

Some in the industry also are exploring opening up an export terminal in Oregon, an analyst said.

Virtually all U.S. coal exports into the Pacific region currently go through Vancouver, British Columbia, but even there the amount is small.

The Mississippi River is handling more export coal, and Illinois has launched a grant program to help finance transportation improvements to move Illinois coal to market.

One potential applicant is the IC Rail Marine Terminal upriver from New Orleans, which already handles some Illinois coal.

"They expect the private sector to take the lead," said IC Rail Marine President Bruce Conti. "It's something we're looking at." (Editing by Jim Marshall)

Forthcoming Industry Events Anouncement

2008-07-31T11:24:00.005+07:00

McCloskey Russia Coal Conference 2008
09 September 2008 to 10 September 2008
St Petersburg

For further information regarding this conference please contact: claire.lewis@mccloskeycoal.com, Tel: +44 (0) 1730 265095 or visit: www.mccloskeycoal.com/conferences

6th China International Coking Technology and Coke Market Congress
11 September 2008 to 12 September 2008
Held in Renaissan, Tianjin TEDA Hotel & Conference Center, Tianjin, China. Contact Persons: Mr. Qiu, Guangjun E-mail:qiu@mc-ccpit.com Tel: +86-10-85110095 / 65132109 Fax: +86-10-85110094 Official Website: http://www.coke-china.com

McCloskey China Coal Conference 2008
09 October 2008 to 10 October 2008
Kempinski Hotel, Beijing

For further information regarding this conference please contact: claire.lewis@mccloskeycoal.com, Tel: +44 (0) 1730 265095 or visit: www.mccloskeycoal.com/conferences

28th Coaltrans' World Coal Conference, Prague
19 October 2008 to 21 October 2008
This conference has been running for 28 years. 1400 participants in 2007. At each event, new business has been won, existing relationships consolidated and valuable contracts have been negotiated and agreed; quite simply, it is the event where coal deals are done. Visit www.coaltrans.com/prague

17th International Symposium on Mine Planning and Equipment Selection 2008 and China International Mine Planning and Equipment Selection Exhibition
20 October 2008 to 22 October 2008
Held at the Beijing International Convention Center, Beijing, China. Contact persons: Mr Guangjun Qiu Tel: +86-10-85110095 / 65132109 Fax: +86-10-85110094 Email: qiu@mc-ccpit.com

Official Website: http://www.mpesbeijing.com

McCloskey US Coal Imports and Exports Conference 2008
11 November 2008 to 12 November 2008
Renaissance Hotel, Portsmouth, Virginia

For further information regarding this conference please contact: claire.lewis@mccloskeycoal.com, Tel: +44 (0) 1730 265095 or visit: www.mccloskeycoal.com/conferences

McCloskey India Coal Conference 2008
04 December 2008 to 05 December 2008
The Oberoi, New Delhi.

For further information regarding this conference please contact: claire.lewis@mccloskeycoal.com, Tel: +44 (0) 1730 265095 or visit: www.mccloskeycoal.com/conferences

Exploration, Mining & Processing Fundamentals
09 December 2008 to 10 December 2008
A Comprehensive 2 Day Course Teaching the Technical Fundamentals of Exploration, Geology, Mining Methods & Production for Industry Newcomers Visit: www.ibc-asia.com/exploration for more information today!

South African Coal Sales to India, Asia Jump, Hurting Europe

2008-07-31T11:15:00.004+07:00

South Africa's Richards Bay Coal Terminal, the world's biggest coal-export facility, expects a 30-fold surge in sales to India this year, increasing prices for European power producers competing for supplies.

The terminal shipped 7.3 million metric tons to India in the first 10 months, compared with 300,000 tons for the whole of last year, Donovan Raj, the terminal's shipping coordinator, said in an interview Nov. 22. That may rise by another 2 million tons before the end of the year, he said. Richards Bay coal prices have gained 72 percent this year.

Benchmark prices for thermal coal, used in power plants, have reached a record in Australia, South Africa and Europe in the last three weeks. Costs have risen because of shipping and rail bottlenecks as Asian customers compete for supplies with European utilities. Indian coal demand will exceed supply for the next five years, Tata Power Co. said last month.

``India is the golden child at the moment,'' Raj said, speaking from the terminal on South Africa's northeast coast, the biggest single source of coal for European power plants.

Indian Power Minister Sushil Kumar Shinde said Aug. 24 the nation planned to add 78,755 megawatts of capacity in the five- year development plan ending in 2012. That would add 60 percent to the current level, much of it though coal-fired plants.

Richards Bay's shipping potential will expand to 91 million tons a year by the first half of 2009, from 72 million tons now, said Kuseni Dlamini, the terminal's chief executive officer.

``That is a market the world is looking at,'' Dlamini said. Richards Bay, which has about 3.5 million tons of coal stockpiled at the moment, is owned by mining companies including BHP Billiton Ltd. and Anglo American Plc.

Australian Coal

Coal exported from Richards Bay rose last week to $85 a ton, the highest since at least August 2000, according to McCloskey Group Ltd., a U.K.-based consultant. Coal from Newcastle, Australia, has risen 64 percent this year to $84.65.

The jump in prices is encouraging European utilities to buy supplies from the U.S. The power producers are paying more for the shipping than for the coal, London shipbroker Galbraith's Ltd. said this month. Peabody Energy Corp., Consol Energy Inc. and Arch Coal Inc., the three biggest U.S. coal companies, forecast the largest increase in exports in 20 years.

Additional demand is also coming from Japan and South Korea. The nations each bought 300,000 tons of coal through the port this year, compared with none last year.

Thermal Coal

More than a quarter of western Europe's thermal coal is shipped from Richards Bay, which reported total shipments of 66.5 million tons last year. Exports through October this year were 53.8 million tons, little changed from a year earlier.

November's volumes should total about 5.6 million tons, from 6.48 million tons a year earlier, Raj said.

Derailments of trains run by Spoornet, the state rail operator that delivers coal to the port, and bad weather have hampered shipments, Dlamini said.

Turnover times for ships at the port have been slowed by equipment shortages at the government's National Port Authority.

A helicopter used to transfer pilots to ships was replaced in September this year after crashing in 2005, Raj said. In the interim pilots have been transferred by boat, a process that can take four to six hours, instead of the 90 minutes to 2 hours by helicopter, Raj said. The helicopter service is no longer operating at night.

While Richards Bay is the world's biggest coal-export terminal, Australia's Newcastle port ships more of the fuel from two terminals. South Africa is the world's third-biggest thermal coal exporter after Australia and Indonesia.

Source:

South African Coal Sales to India, Asia Jump, Hurting Europe

2008-07-31T11:15:00.000+07:00

Richards Bay, DES ARA coal prices rise

2008-07-31T09:51:00.003+07:00

Prices for prompt cargoes of South African coal free-on-board Richards Bay and for coal delivered into Amsterdam-Rotterdam-Antwerp rose on Monday on strong, renewed demand.
Indian traders returned to the market for prompt South African cargoes for January and February loading. Prices rallied late last week to $100.00 a tonne FOB Richards Bay from around $97.00 on Indian buying.

On Monday, a February loading panamax cargo traded at $101.50 a tonne FOB Richards Bay via brokers.

On electronic trading platform globalCOAL, February was bid at $101.50 and offered at $104.50 a tonne FOB Richards Bay.

A March delivery parcel of multi-origin coal traded at $132.00 a tonne DES ARA on globalCOAL on Monday, a price up around $2.00 from last week's levels.

Source: Reuters

Newcastle Coal Price Falls to 9-Week Low on Holidays

2008-07-31T09:49:00.001+07:00

Export prices for power-station coal at Newcastle, Australia, the world's largest-export terminal, fell to a nine-week low as holidays in China and Japan slowed demand.

The price of thermal coal for immediate delivery from the port in New South Wales state fell $2.37 to $52.22 a metric ton in the week ended May 4 from a week ago, according to the globalCOAL NEWC Index. The Baltic Panamax Index rose to its highest in more than 2 years after the queue of ships waiting to load at Newcastle Port lengthened.

``I'm surprised by that weakness,'' said Andrew Harrington, a commodities analyst at Australia & New Zealand Banking Group Ltd. in Sydney. ``We have seen very strong demand especially with the switch in China from a net exporter to a net importer in March, indicating to me the thermal market is still strong.''

Rio Tinto, BHP Billiton Ltd. and Xstrata Plc are trying to increase shipments after China raised imports and cut exports. Bottlenecks at the port and on the rail system in New South Wales are preventing miners from fulfilling orders, raising their costs. Port Waratah Coal Services Ltd., operator of the coal terminals at Newcastle, said all coal shippers using the port will have their capacity allocations cut this year due to high demand.

China, the world's second-largest energy user, increased coal imports 53 percent to 5.67 million metric tons in March. The nation's coal exports fell 36 percent to 3.71 million tons in the same month, the Beijing-based Customs General Administration said April 23. China is the world's biggest coal producer and consumer.

The Newcastle price has increased from last year's low of $41.10 in the second week of November. In February prices rose to $55.79.

Holidays

Buyers in Japan and China, Asia's biggest importers, were away for public holidays last week. Chinese businesses and markets were closed last week and today for the annual labor holiday. Japan observed holidays May 3 and May 4.

The queue of ships waiting to load rose by three to 70 for the week ended early today, the Newcastle Port Corp. said on its Web site. The queue of vessels had fallen to 67 last week, the lowest in three weeks. The average waiting time to load coal was 25.7 days compared with 0.2 days for general cargoes.

``Anything above $50 is still relatively strong in my view,'' said Harrington. ``Perhaps the slight improvement in the vessel queue is seen as something that may indicate less demand, although that's hard to imagine.''

The Baltic Panamax Index rose 2 percent for the week ended May 4 to 5,942, the highest since December 2004. The index measures the cost of hiring Panamax ships, the class of vessel that carries most of Newcastle's coal exports.

Shipping Costs

The average daily hire rate for a Panamax vessel, which typically carries about 75,000 tons, has risen 38 percent this year, extending its gains for a second year. The rate advanced to $47,981 on May 4, the highest since Dec. 6, 2004, according to data from the London-based Baltic Exchange.

Twenty ships carrying coal left Newcastle in the week ended May 5, one more than the week earlier, Newcastle Port said today in a statement. Fourteen vessels headed to Japan, two to Korea, two to Mexico and one to the Netherlands and Egypt, it said.

A 20 percent production cut by Coal & Allied Industries Ltd., an Australian thermal coal producer controlled by Rio Tinto Group, may be made up by Indonesian producers.

Australia may have exports of the fuel crimped for two years because of port constraints, Preston Chiaro, head of the energy unit at Rio Tinto, the nation's largest thermal coal exporter, said in an April 27 interview.

Straits Asia Resources Ltd., a Singapore-listed coal producer with mines in Indonesia plans to expand coal production by 50 percent to 6 million tons annual in the first quarter of 2008. Japan is Straits Asia Resources' biggest customers.

Author:Michele Batchelor From:Bloomberg Edit:inen

Coking-Coal Firms Offer a Way To Play China's New Price Caps

2008-07-31T09:43:00.002+07:00

Despite a near doubling in global spot-coal prices in the first half, listed coal producers in China -- the world's biggest coal consumer -- have been market laggards as a result of price caps imposed by the state to regulate supply.

The Hong Kong shares of China Shenhua Energy, the country's largest integrated coal producer by output, have slumped 38% so far this year, while industry No. 2 China Coal Energy lost 43% amid concerns of the price-control risks.

Analysts say these stocks may be susceptible to further near-term losses following measures the government announced Thursday to cool red-hot domestic thermal-coal prices by artificially capping spot prices at major ports.

The new steps affect producers of thermal coal, used mainly for electricity production. However, producers of coking coal -- the key ingredient for metals processing -- aren't affected.

Shares of Hong Kong-listed coking-coal maker Hidili Industry International Development have outperformed both its thermal-coal peers and the Hang Seng Index, which is down 18% this year.

Sichuan-based Hidili, which listed last September, is down 10% in 2008. But many analysts say now is a good time to accumulate the stock, thanks to expectations coking-coal prices will continue to rise and to attractive valuations.

Four analysts that cover the company have an average price target for the stock of 18.69 Hong Kong dollars (US$2.40), or 74% above its Friday close of HK$10.76.

"We are bullish on China's coking-coal sector because of the current tight-market-supply situation," says UOB KayHian analyst Karen Li. "We believe HK$11 or below is a good entry point to gain exposure to this booming industry."

Hidili, which raised US$525.4 million from its initial public offering, supplies coal to steelmakers in southern and western China, including Panzhihua Iron & Steel Group and Liuzhou Iron & Steel Group. Analysts say Hidili is attractive because of rising coking-coal prices, which have almost doubled in the first half on strong demand both in domestic and global markets.

Xu Hui, Hidili's company secretary, says its coking-coal prices in the first half jumped 90% from the previous year and reached 1,500 to 1,600 yuan (US$220 to US$235) a metric ton at the end of June. He didn't give any forecast for prices in the second half.

Liu Jianzhong, deputy general manager of Shanxi Coking Coal Group, China's biggest coking-coal producer by output, told state media earlier this month that he expects coking-coal prices in the second half to rise 200 to 300 yuan a metric ton.

Coal prices will also likely be supported by the government's effort to crack down on smaller mines in hopes of reducing the number of deaths from accidents.

The government plans to shut more than 4,000 small coal mines and reduce their numbers to below 10,000 by 2010, from about 16,000 currently, the Xinhua News Agency reported this month. Of the total, 90% of the coking-coal mines are considered small ones, with much lower safety standards than larger, more established operations, Xinhua said.

Goldman Sachs says Hidili's share weakness, and its differentiation from thermal-coal producers, provide a good opportunity for investors to buy into the stock.

"The key advantage of coking coal verses thermal coal is a better demand profile and lower risk of government price control," Goldman analyst Song Shen wrote in late June. "We believe Hidili shares have been weak given the higher risk premium due to government price controls on thermal coal."

Analysts say the Chinese government won't likely intervene in the coking-coal industry, given the nature of the domestic metals market.

"The setting of power tariffs is regulated by the government in order to curb the country's rising inflation," says Nomura analyst Donovan Huang. "As China's steel prices are largely market-driven, coking-coal producers have lower government price-control risks."

Beijing last month imposed temporary price ceilings on thermal coal to protect the profitability of power producers using it. China's thermal-coal mines can't sell at prices higher than those reached June 19.

Aside from the booming market for coking coal, Hidili's shares are also attractive because of the company's acquisition plans, analysts say. Hidili intends to raise its reserves by acquiring mines in western Guizhou province.

The company said it aims to boost coal output to eight million metric tons by 2011, more than twice this year's target of 3.2 million tons. In 2007, it produced 2.27 million tons.

Given those projections, analysts are generally upbeat on Hidili's earnings for the next two years. Goldman Sachs said it expects the company's net profit to more than double this year, followed by a 75% increase in 2009, due by higher sales volume and prices.

In 2007, Hidili's net profit jumped more than sixfold to 570.3 million yuan from a year earlier.

Hidili's valuations are lower than those of peers. According to Thomson Reuters, the stock is trading at about 16.11 times projected 2008 earnings, compared with 18.95 times for Shenhua Energy and 17.08 times for China Coal.

Nonetheless, concerns that growth in China's steel industry could slow amid rising prices for raw materials might hurt Hidili's near-term share performance, analysts say.

"If steel-production growth slows down sharply, we could see coking-coal prices coming down," Goldman Sachs says.

Citigroup projects Chinese steel production at 640 million tons next year, up 16% from its 2008 forecast of 553 million tons. The nation accounts for slightly more than one-third of the world's demand for steel.

Mr. Xu, Hidili's company secretary, says he expects China's steel production will grow strongly until 2010 as "we have confidence Beijing will maintain sound economic growth over next two years."

Source: in-en.com 2008-7-28
Author:online.wsj From:online.wsj Edit:steven

Australia's Newcastle Coal Exports Gain 4%, Ship Queue Drops

2008-07-31T09:34:00.004+07:00

Coal exports from Australia's Newcastle, the world's biggest export harbor for the fuel, rose 4 percent last week after protesters disrupted ship loading during the previous seven days.

Volume shipped in the week ended 7 a.m. local time yesterday rose to 1.67 million metric tons from 1.61 million a week earlier, Newcastle Port Corp. said today on its Web site. A total of 30 ships, waiting to load 3.06 million tons of coal, were lined up outside the port, down from 36 a week earlier.

Shipments from the port a week earlier were disrupted after protesters chained themselves to a conveyor and railroads, temporarily halting coal loading and delaying deliveries. Rio Tinto Group, Xstrata Plc and BHP Billiton Ltd. are among mining companies that ship coal through Newcastle.

Coal ships waited 13.2 days to load coal in the week ended July 28, up from 11.1 days a week earlier, Newcastle Port said. The waiting time compared with 0.82 day for general cargo vessels, it said. A total of 28 vessels carrying coal left Newcastle in the week ended July 26, five fewer than a week earlier, Newcastle Port said today in an e-mailed report. Fifteen ships were bound for Japan, and one for South Korea, it said. The destinations of the other ships weren't disclosed.

Source :

Putin's warning to Mechel about pricing policies

2008-07-29T10:13:00.003+07:00

Down 38% to $22.8 after Putin's criticism. Yesterday, Russian Prime Minister Vladimir Putin chaired a meeting on the Russian steel and coal industry with ministers and senior representatives and owners of major Russian steel and coal companies in Nizhny Novgorod. In our view, the core reason for the meeting was the final decision on export duties on steel, coal, scrap and pricing regulations in Russia. However, Putin did not mention anything new on these issues, while he unexpectedly criticized Mechel for its pricing policy. According to Putin, Mechel's principal Igor Zyuzin, who was invited to attend yesterday's meeting, "has suddenly fallen ill". He urged Zyuzin to get well soon, "otherwise, we will send him a doctor and clean up all these problems". Putin recommended Mechel's pricing policy to be examined by Federal anti-trust service and if needed the special committee of the General Prosecutor. The Mechel share price dropped by 38% to $22.8/ADR yesterday.

Confusion over pricing policies. Putin, in his speech, specifically mentioned that Mechel in 1Q08 in Russia sold coking coal in the domestic market at double the export price. In our view, such a difference in domestic and export coking coal prices can be explained by the relatively low price (around $70- 80/ton) of last years export contracts at Yakutugol. (We note that the contracts expired at the end of 1Q08 and were concluded prior to Mechels acquisition of Yukutugol in October 2007.) At the same time, domestically Mechel decided to shift its coking coal and steam coal sales from annual contracts to spot sales (unlike other coking coal producers), which allowed the company to increase its average realized coking coal price to $145/ton in 1Q08. After fulfilling the contract, Mechel in 2Q08 substantially hiked the export coking coal price from Yakutugol to at least $315/ton FOB in order to match the international benchmark level, implying a premium to the current domestic price of $240/ton.

Market over-reaction. Basically we agree with the opinion of NLMK's core shareholder Vladimir Lisin, who said yesterday after the meeting that "if the Mechel behaves properly on the market, it will be fine. Putin has reacted to a situation when someone falls out of mutually accepted norms of behavior in the market". Mechel has been the most aggressive in its pricing policy in Russia, however, earlier this week Mechel already showed signs of conforming to socalled mutually accepted norms when it announced that it had signed quarterly contracts for the supply of coking coal domestically. We will watch the news flow carefully, but at this stage we suggest that the market reaction yesterday was way overdone. We would not be selling Mechel at these levels and reiterate our Buy recommendation. The stock now trades at a 2008E PE and EV/EBITDA multiples of just 3.5 and 2.6, respectively.

News Source : July 25, 2008 / Internet Securities, Inc. (ISI), All rights reserved

“Indonesia policy copy Russia atau vice versa??”

Undergoing MyBlogLog Verification

Peabody says recent coal spot price volatility mainly paper-driven

2008-07-29T09:17:00.004+07:00

Peabody Energy President and Chief Commercial Officer Richard Navarre said he believes the recent volatility of CIF ARA (API2) and Newcastle prices are mainly paper-driven and has little to do with physical transactions being closed.

"We look at API2 and it went well up over $200, Newcastle [FOB] at $200. And you've seen a retreat in the last two weeks," Navarre said in his company's July 23 webcast.

"I think it's a lot of traded activity in those markets and they are not really that physical at the end of the day.

There's not a lot of physical contracting," Navarre said.

"I've talked to a lot of people on the physical side. We are still seeing the strength [in demand] but I think a lot of [price] retreats [are] tied to a softening of oil and gas prices," he said.

He added traders "have that mentality to move with the overall energy sector and so you are seeing a decline because oil prices are declining."

"If you look at API2, it was essentially running at parity with EU gas. It was running close to gas levels. It has come down a little bit, so you have seen the API2 drop out a little bit," Navarre said.

API2 is a derivatives contract for coal traded in the Amsterdam, Rotterdam and Antwerp (ARA) trading hub in north-west Europe. Physical cargoes are also delivered into ARA on a CIF basis.

In Asia, coal buyers and traders said they were highly suspicious of the unprecedented rise in FOB Newcastle physical prices for coal shipped out of Australia which touched $200/mt on July 1 on the globalCoal screen, while physically traded prices were $20/mt lower in the previous week. One trader told Platts that physical demand for coal, although tight, did not justify a $20/mt jump in prices in just a week.

News Source : Issue 879 / July 28, 2008 / Platts-International Coal Report - copyright The McGraw Hill Companies

Coal Export Monitored Through Verification

2008-07-28T16:21:00.004+07:00

The Department of Trade has set the verification mechanism as the government's short term ploy to monitor coal export activities to be adjusted according to domestic requirements.

The Directorate General of Foreign Trade of the Dept. of Trade Diah Maulida said that her dept. still chose to use existing instruments although there has been a strong urge by various parties to apply an export duty on coal.

"The first phase would be verification (of export products)," she said. Coal and LRC are included in the A class mine product that need to go through verification or technical analysis based on the Trade Minister regulation no 14/M-DAG/PER/5/2008. The regulation signed by Minister Mari Elka Pangestu in May 2008 regulates verifications or technical analysis prior to shipment at the loading port.

The verification includes an analysis and administration check of source of goods, goods specification in relations to its tariff post number, the amount and type of goods, shipment schedule, loading port and export destination country.

Diah said the verification aims to minimise illegal export, minimise environmental damage caused by unchecked mining, to obtain information on technical specification, export volume and source of goods.

The high price of coal at the international market has spurred miners like PT Tambang Batubara Bukit Asam (PTBA) to increase coal export to over 20% this year.

A Senior Corporate Communications of PTBA, Asmara Karma, said that the current coal price is quite favourable and that his company plans to increase export, however it will still regard the domestic market as its main focus.

Last month, a number of the 6th Commission members of the legislative have requested the application of export duty and domestic market obligation for coal.

However, the Trade Minister, Mari Pangestu, said that coal export duty is not the only way to increase state revenue from mining. It could also be in the form of corporate revenue tax. Mari said that the regulation will also impact negatively on the 2nd and 3rd generation coal contract of work (PKP2B) holders, which have not acquire the significant benefits as the 1st generation PKP2B holders.

A similar effort by the government to apply a 5% export duty on coal has previously met strong opposition from the coal mining community and has failed to pass the judicial review. The government has had to pay Rp 60 billion in restitutions in connection to the case two years ago.

Source : Fahmi Achmad & Nana O Musliana/Bisnis Indonesia, Monday, July 14, 2008

China's central government places additional caps on domestic coal prices at sea ports

2008-07-28T15:56:00.001+07:00

China's National Development and Reform Commission late on July 24 has introduced further measures to curb rising coal prices by capping the FOB prices of domestic coal at major ports at June 19 prices, including Qinhuangdao, Tianjin and Tangshan.

In the announcement, the NDRC said it was capping FOB prices of Chinese thermal coal with a calorific value of 5,500kcal/kg GAR at CNY 860/mt ($126.5/mt) at Qinhuangdao Port from July 25 to December 31, 2008.

At Tianjin Port, FOB prices of similar thermal coal have been capped at CNY 840/mt, and at Tangshan Port, FOB prices have been capped at CNY 850/mt. Prices of thermal coal with different calorific values will be calculated at a rate of CNY 16/100kcal on the basis of 5,500kcal/kg GAR.

The price caps introduced can be compared with the current FOB prices China's National Development and Reform Commission late on July 24 has introduced further measures to curb rising coal prices by capping the FOB prices of domestic coal at major ports at June 19 prices, including Qinhuangdao, Tianjin and Tangshan.

The price caps introduced can be compared with the current FOB prices of around CNY 1,080/mt for quality thermal coal with a calorific value of 5,800-6,000kcal/kg at Qinhuangdao, according to a Beijing-based analyst.

In early July, China's domestic coal market surged to fresh highs, with quality Shanxi thermal coal -- with a calorific value of 5,800-6,000kcal/kg -- fetching up to CNY 1,000/mt free carrier (FCA) at Qinhuangdao, China's largest coal port, as previously reported.

Meanwhile, the NDRC pledged to strengthen the honoring of key thermal coal contracts between coal mining and coal consuming companies with related penalties, including the allotments of rail wagons for coal transportation, ready to apply to defaulting companies.

According to the Beijing-based analyst, the new price cap notice can be expected to be more effective than the previous price freeze issued by the NDRC on June 19. This is because the central government is already planning to impose a 10% resource tax on the basis of ex-works prices of coal. This compares to the current resource tax which has been calculated on the basis of the quantity of coal mined, ranging from CNY 2.5/mt to CNY 4/mt.

Should the 10% resource tax take effect by the end of 2008 as many industry sources believe, Chinese coal miners will become more careful about raising their prices at will, which in turn will help China's domestic coal prices to stabilize, the analyst noted to Platts.

While the NDRC did up the retail price of electricity on July 1, power plants have been suffering from higher coal prices which has had an impact on profits.

News Source : Issue 879 / July 28, 2008 / Platts-International Coal Report - copyright The McGraw Hill Companies

PLN to acquire shipping firm

2008-07-28T10:42:00.004+07:00

State electricity firm PT Perusahaan Listrik Negara (PLN) said on Thursday that it would acquire state-owned shipping firm PT Bahtera Adiguna to ensure a smooth transportation of coal to its power plants.

PLN's President Director Fahmi Muchtar told reporters that PLN would use its internal funds to acquire the firm at about Rp 70 billion

"We have been approaching Bahtera Adiguna and the office of State Minister of State Enterprises had also approved of the acquisition plan, "he said.

The acquisition process is expected to be completed later this year, he added.

State coal miner PT Tambang Batubara Bukit Asam (PTBA) Tbk. was also interested to acquire Bahtera Adiguna but the firm's shareholders did not approve of the acquisition plan during a meeting in Jakarta in May, 2008.

News Source : July 24, 2008 / Petromindo.com

Coal Price

2008-07-28T09:37:00.004+07:00

Coal Price
• Australia Thermal GlobalCOAL trades in past week.

• China Coke The current spot export price for 12.5% ash metallurgical coke is reported to have reached US$724.00/t.
• Europe Thermal On 17 July 2008 50kt Phys ARA (DES) (Sep’08) (ACPRS & Ams/Rot) traded at US$214.00/t. On 21 July 50kt Phys ARA (DES) (Sep’08) (ACPRS & Ams/Rot) traded at US$202.00/t, 25kt (Sep’08) (S & Rot) traded at US$201.00/t and 50kt (Oct’08) (ACPRS & Ams/Rot) traded at US$194.00/t. On 23 July 50kt (Sep’08) traded at US$194.00/t and 50kt (Oct’08) traded at US$185.00/t (both ACPRS & Ams/Rot).

• India Coking SAIL has settled its annual contracts with Australian suppliers of hard coking coal at about US$300.00/t FOB to take effect from 1 July 2008. In 2007/2008 SAIL paid Australian suppliers about US$98.00/t FOB for hard coking coal. SAIL estimates imports of coking coal could reach 12Mt in 08/09.
• Korea Thermal Korea South East Power has issued tender KOSEP-Coal-2008-SP05 seeking 0.78Mt of bituminous coal (5,350 NAR min) with delivery to commence August 2008. Bids by lots of 60kt on both FOB & CFR basis are due by 31 July.
• Mexico Thermal CFE is reported to be preparing to issue a tender for 0.36Mt for delivery to Petacalco in 2008. CFE recently purchased coal from selected pre-qualified suppliers.
• South Africa Thermal On 18 July 2008 75kt Phys RB1 (Oct’08) traded at US$165.00/t and on 22 July 75kt Phys RB1 (Oct’08) traded at US$153.00/t. On 23 July 75kt Phys RB1 (Oct’08) traded at US$143.00/t FOB.

Shenhua Energy reports saleable coal production

2008-07-27T23:10:00.002+07:00

Shenhua Energy reports saleable coal production in H1’08 was 89.6Mt, up 17% on H1’07. Sales in HI’08 totalled 115.1Mt,

up 17.7% and exports were 10.6Mt, down 13.1%.

Peabody Energy announce completed Wambo expansion

2008-07-27T21:26:00.003+07:00

Peabody Energy announced it had completed the $50M expansion of its Wambo Coal Preparation Facility.

The plant serves the 2.5Mtpa North Wambo underground and the 4.5Mtpa Wambo open cut mine both export through Newcastle.

Caledon Resources plc reports saleable coal production

2008-07-27T21:23:00.002+07:00

Caledon Resources plc reports saleable coal production at its Cook Colliery in H1’08 totalled 176kt (coking 149kt and thermal 27kt).

Caledon is planning to raise ROM production to 100kt per month from July 2008 to reach 600kt to 700kt saleable in CY 08.

BHP Billiton attributable production (continuing operations)

2008-07-25T16:13:00.005+07:00

• BHPB reported metallurgical coal production in Queensland recovered strongly from extreme weather in the March 2008 quarter with force majeure lifted during the June 2008 quarter.

Recovery efforts continue and on average mines are operating at about 90% capacity. Illawarra Coal had record production in Q2’08. Approximately 1.4Mt of metallurgical coal that will be delivered in Q3’08 will be sold at 2007 prices. BHPB said New Mexico thermal production for Q2’08 reached an all time high.

BHP Mitsubishi Alliance (BMA) had acquired 100% of the New Saraji Project

2008-07-25T15:53:00.005+07:00

Australia BHP Billiton announced that BHP Mitsubishi Alliance (BMA) had acquired 100% of the New Saraji Project from New Hope Corporation for a cash consideration of approximately US$2.4 billion (BHPB share US$1.2B). New Saraji is a 690Mt (156Mt indicated and 534Mt inferred) undeveloped metallurgical coal resource located adjacent to BMA’s Saraji mine.

The purchase comprises MLA 70383 and EPC 837 along with a port user contract entitling the purchaser to 10Mtpa of capacity at the Abbott Point Coal Terminal as it is expanded.
New Hope Corp is planning to use funds raised from the sale of the New Saraji Project to expand its New Acland thermal coal mine. The New Acland mine exports through Brisbane that is currently being expanded to 7Mtpa by 2010 (2007 5.26Mt).

Technorati Profile

Timah in search of new coal market

2008-07-24T12:40:00.004+07:00

PT Timah Tbk (TINS) is currently seeking for new additional markets of coal following the acquisition of a coal company named PT Tanjung Alam Jaya. The company’s coal production has so far been marketed to Malaysia and the Philippines. Timah conducts diversification by acquiring the company whose coalmine is located in South Kalimantan.

“We acquired the coal company for less than US$10 million. With the acquisition as estimated PT Timah would receive additional revenue from coal production of US$11 million,” said president director of PT Timah Tbk Thobrani Alwi as quoted from Bisnis Indonesia daily.

Timah will also allocate US$5 million for the improvement of infrastructures in effort to increase the coal production. In year 2004 Timah targets an increase of coal production from 300,000 tons to 1 million tons a year. With the production increase Timah expected to earn additional revenue of US$11 million.

“When we made the acquisition the company’s production capacity was only 300,000 tons a year. After having been evaluated, we estimated that the production could increase to 1 million tons a year,” he said prior to a hearing with the national parliamentary commission VIII in Jakarta on Dec. 2.

Alwi admitted that the coal production from the coalminer--which was acquired by TINS’ affiliate PT Timah Investasi Mineral as part of the corporate diversification program--was not considerably bulky at maximal 1 million tons, but the mine life can be as long as 7 years. *

Source : MiningIndo.com

Newcastle Coal Exports Drop 18% on Protests; Queue Unchanged

2008-07-24T08:44:00.002+07:00

July 22 - Coal exports from Australia's Newcastle, the world's biggest export harbor for the fuel, fell 18 percent last week as climate-change protesters disrupted loadings.

The volume shipped in the week ended 7 a.m. local time yesterday fell to 1.61 million metric tons from 1.96 million tons a week earlier, Newcastle Port Corp. said today on its Web site. A total of 36 ships, waiting to load 2.96 million tons of coal, were lined up outside the port, the same number as last week.

Shipments from the port were delayed last week after protesters chained themselves to a conveyor and railroads, temporarily halting coal loading and delaying deliveries. Rio Tinto Group, Xstrata Plc and BHP Billiton Ltd. are among mining companies that ship coal through Newcastle.

Coal ships waited 11.12 days to load coal in the week ended July 21, unchanged from a week earlier, Newcastle Port said. The waiting time compared with 0.08 day for general cargo vessels, it said.

A total of 33 vessels carrying coal left Newcastle in the week ended July 19, two fewer than a week earlier, Newcastle Port said today in an e-mailed report. Seventeen ships were bound for Japan, two for Taiwan, and one each for Korea, Turkey and Noumea, it said. The destinations of the other ships weren't disclosed.

The weekly index for power-station coal prices at the New South Wales port fell $6.85 to $180.85 a metric ton in the week ended July 18, according to the globalCOAL NEWC Index. The price reached a record $194.79 a ton in the week ended July 4.

Source: Bloomberg

Rising coal prices slash profit of power producers

2008-07-24T08:15:00.002+07:00

China's power producers were feeling the pinch of soaring coal prices with more and more companies starting to report huge losses in the first half.

Of the 31 power producers who had released profit forecasts for the first half, 19 expected losses and six forecast profit decrease, the Wind Info, a provider of financial data, said on Sunday.

Shanghai Electric Power Co, which suffered the heaviest losses, forecast 560 million yuan ($82.11 million) in losses in the first half, compared with a net profit of 211 million yuan during the same period of 2007.

The Huaneng Power International Inc, the listed arm of China Huaneng Group, also forecast losses early this week. According to the China Securities News, the company would lose 500 million yuan in the first half as the rising coal price added one billion yuan in fuel costs.

The government has raised retail electricity price by 0.025 yuan per kwh starting from July 1. Prices directly related to people's livelihoods, however, remained unchanged, including public transport, taxis and household electricity.

The price increase, however, could only cover 15 percent of the losses in coal-fired power plants, said a Citic Securities analyst.

source: http://www.chinadaily.com.cn 21 July 2008

Napocor defends coal supply contracts

2008-07-24T08:12:00.001+07:00

MANILA, Philippines -- The state-run National Power Corp. on Friday defended the awarding of two coal supply contracts to the joint venture of PT Marsitero Marloan Prakarsa of Indonesia and its local partner Transpacific Consolidated Resources Inc., amid allegations of overpricing and undercapitalization.

“We’re not buying overpriced coal. We’ve bought nothing higher than what’s priced in the market. We’ve even asked some of the (independent power producers) to buy coal for themselves to see if they could get a supply that costs lower than what we got,” Napocor president Cyril del Callar said Friday.

Del Callar said the state firm’s bidding process was completely transparent, and it was not favoring any specific bidder.

“The coal contracts we awarded to them were for coal priced at around $109 per metric ton. That’s already the price on delivery, which include freight costs and taxes. The selling price at the market now is around $165 per MT, and that’s for the coal alone and doesn’t include any other charges,” he said.

The coal supply contracts bagged by PT Marsitero and Transpacific Consolidated—which involved one contract for one 65,000-MT shipment and another for three 65,000-MT lots—had been mired in controversy because the local joint venture partner had a paid-up capital of only P62,500.

Del Callar admitted that this was true, but said the Indonesian partner PT Marsitero had a track record in the coal industry, with gross profit from operation reaching $15.58 million in end-2006.

The Indonesian firm also had two coal concessions in South and East Kalimantan.

“The joint venture’s commitment is to deliver the first shipment to us by Aug. 5-14. If this isn’t delivered, we’ll cancel the second contract,” he said.

He added that the joint venture posted a cash bond of $391,462.50, which Napocor could get if the delivery commitment is not fulfilled.

In a presentation Friday, Napocor fuel management department manager Marilou dela Cruz explained that global coal prices continued to soar, amid tight supply and unrelenting demand.

As of July 15, she said the price of Chinese coal had skyrocketed to $200 per MT, Australian coal to $187.65 per MT and Indonesian coal to $165 per MT. These prices did not include freight costs and other charges.

Freight rates to the country, she said, were around 20-30 percent of the price of coal—or between $25 and $50 per MT.

“Coal price indices reached unprecedented heights. Coal analysts are still expecting coal prices to increase in the next few months,” she said.

The Philippines sources most of its coal supply from China, Indonesia and Australia.

Dela Cruz said Chinese coal producers had decided to cut exports to meet growing domestic demand while the Indonesian government also wanted to review its existing coal sales contracts to take advantage of soaring coal prices. This could mean higher prices even for countries with which Indonesia had long-term supply deals.

Weather had also contributed significantly to coal price increases, as well as delays in supply deliveries. Indonesia, for example, had to delay scheduled coal deliveries because of heavy rains.

source:http://www.inquirer.net/ 18 July 2008

Coal Price and Market - June 26, 2008

2008-07-22T21:10:00.004+07:00

COAL PRICES AND MARKETS - June 26, 2008
• Australia Thermal GlobalCOAL trades in past week.

• GlobalCOAL announced that the final specifications of the globalCOAL ICE Newcastle Futures contract have been agreed by ICE Futures Europe. The contract is scheduled to be introduced on the ICE platform on 5 September. The Newcastle Futures contract will financially settle on the gC Newc Index.

• China Coke Spot export price for 12.5% ash metallurgical coke has risen to US$680/t FOB.
• China Coking According to trade statistics China has imported 0.855Mt of coking coal from Mongolia in the 5 months January-May 2008, up 32% on the same period in 2007. Imports of coking coal from Australia for January-May 2008 were 0.809Mt, down 34% on the same period in 2007.

• Europe Thermal On 24 June 2008 2 x 150kt Phys ARA (DES) (Q4’08) traded at US$199.50/t and US$200.00/t while 150kt (Q1’09) traded at US$200.00/t. On 25 June 50kt (Oct’08) traded at US$200.00/t (all trades ACPRS & Ams/Rot).

• Japan Anthracite Steel mills are reported to have reached agreement with Vinacomin for JFY 08. Hongay No 6 used as PCI is priced at just under US$250/t and Hongay No 8 used for sintering is priced at about US$225/t FOB.

• Japan Semi Soft Coking The JFY 08 price for Newcastle semi soft coking coal has not yet been settled. Market reports suggest Xstrata Coal has indicated a price of US$260/t FOB, up US$196/t on the JFY 07 price of about US$64/t. The JSM are reported to be seeking settlement below US$200/t.

• Taiwan Thermal According to the Bureau of Energy coal consumption by the electric power industry for January-April 2008 totalled 11.148Mt (Taipower 8.864Mt and IPPs 2.284Mt), up 0.425Mt (4%) on the same period in 2007.

• Vietnam Thermal Vinacomin has signed framework contracts with PT Berau Indonesia and Maintime Hong Kong to buy 3.5Mtpa of Indonesian thermal coal for the Vihn Tan 1 power project in central Bihn Thuan province. The coal may be used to fuel the Thanh Hoa Province’s Nghi Son No 2 power plant if there is sufficient domestic coal for the Vihn Tan No 1 plant.

Ministry to replace two directors at Ministry of Energy and Mineral Resources

2008-07-21T13:32:00.001+07:00

The government has decided to replace two seniors officials at the Ministry of Energy and Mineral Resources: Director General of Oil and Gas Luluk Sumiarso and Director General of Mineral, Coal and Geothermal Resources Simon F. Sembiring.

A source at the ministry told Petromindo.com on Monday that Luluk would be replaced by Evita Legowo, who currently serves as the ministry's staff expert for technology and human resources and Simon will hand over his position to Bambang Setiawan, currently the secretary of the directorate general.

"The installment ceremony of the new officials will be held tomorrow (Tuesday)," the source said.

Another source confirmed the replacement of both directors general but said the ceremony to install the new directors general would be held "later this week".

The second source said Simon would retire, while Luluk would become secretary to the National Energy Council.

News Source : July 14, 2008 / Petromindo.com