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A week in coal: 16 January 2015

World Coal,


The World Coal news team picks out some of this week’s top news stories from around the world.

Every man and his cat are making predictions for the year ahead

As we forge ahead into the New Year, the global coal industry is rife with predictions for what the year has in store. Betting on the future can prove a difficult game, and perceived expertise is no guarantee of success (who could forget the Observer’s findings that a cat named Orlando was better at predicting future stock market trends than stock-picking professionals?). Not to be deterred from having their say, however, were those at Whitehaven Coal, as the company predicted increases in thermal and metallurgical coal prices. With the coal industry still suffering the effects of an oversupplied market and depressed prices, many professionals will be hoping Whitehaven’s experts do better than the Observer’s stockbrokers.

2015: the year of coalbed methane?

Also looking to take a positive outlook on the year ahead were those in the coalbed methane (CBM) industry, as analysts predicted a bumper year ahead. According to IBISWorld, new extraction techniques and the development of export capabilities are expected to drive rapid industry growth, with revenue in the Australian CBM sector tipped to rise 148% over 2015 to AUS$1.83 billion. As the CBM to LNG plants at the Port of Gladstone come online, Australia is well placed to meet growing demand for CBM from Japan, China and South Korea.

Vattenfall determined to sell lignite assets

Despite German hopes of dissuading Sweden’s state-owned energy company, Vattenfall, from selling its lignite assets, it seems as though the Swedish firm is determined to press ahead with the sale. The Nordic region’s biggest utility recently announced a new company structure and there is no room in this new-look company for the German lignite mines and power plants, which it bought a decade ago in the midst of a debt-fuelled expansion. Like some other European utilities, Vattenfall has been hit by demand or renewables squeezing out its gas and coal power plants, low wholesale prices and Germany's decision to phase out nuclear power.

China orders regions to cut coal consumption

China – once so reliable in terms of its seemingly insatiable demand for coal – has many coal traders worried, as its dependence on coal is steadily declining. Furthermore, mutterings from the country’s politicians suggest a transition away from the black stuff and toward cleaner sources of energy. This week, the Asian behemoth’s state planning agency ordered the city of Shanghai and the provinces of Zhejiang, Jiangsu and Guangdong to draw up plans to reduce coal consumption in a bid to improve air quality. China has struggled badly with air pollution – contributing to 1.2 million premature deaths in 2010 alone – and has geared policy to reducing the impact it has on its people’s health. While China’s population may live healthier lives, attempts at cutting pollution by reducing coal consumption could spell disaster for coal professionals and their wallets; which explains the concerned looks on the faces of many at coal conferences worldwide. News of this planned reduction in coal use follows the publication of findings by scientists that most fossil fuels will have to stay in the ground if we are to limit global warming to no more than 2°C and thus ward off the more catastrophic effects of climate change.

Tracking the trends

Unable to rely on a commodity price rally, mining executives have sharpened their focus on achieving sustainable productivity improvements, according to Deloitte’s Tracking the Trends 2015, which was released this week. The pursuit of operational excellence will be the leading theme in the mining industry in 2015, according to the consultancy, as mining companies push to further improve productivity against continued uncertainty in demand for most commodities. In a world where volatility has become the norm, the key to future success lies in driving operational excellence via cost containment and productivity, and truly embracing innovation and technology. 

Read the article online at: https://www.worldcoal.com/coal/16012015/coal-industry-news-this-week-16-january-2015-1754/


 

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