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A week in coal: 19 September 2014

World Coal,

Perhaps the most important story to break this week was news that China will introduce coal import regulations from 1 January 2015. The new regulations will ban the import and local sale of coal with high ash and sulfur content, in a bid to tackle air pollution and support the domestic Chinese coal sector. Analysts are fearful that the ban could spell disaster for the Australian coal industry, which is heavily reliant on the Chinese market for its produce. The new regulations could also prove detrimental for Indonesia, and a number of analysts expect coal from both Australia and Indonesia will be diverted away from China towards new export markets, such as India.

Turning, therefore, to India, where news broke this week that Indian state-owned Oil and Natural Gas Corp. (ONGC) has been hit with the withdrawal of Dart Energy from the company’s coalbed methane (CBM) project. Dart Energy surrendered its stake in ONGCs CBM blocks, citing the tough conditions of doing business in India as a reason for its decision to exit the country and surrender its interests in the CBM project. ONGC has been struggling to tap into the potential of its CBM blocks – despite billions of cubic metres in untapped gas reserves. With the exit of Dart, these struggles are likely to continue.

Also struggling to reach its potential is Ambre Energy’s Morrow Pacific coal export terminal project on the Columbia River. After protests from local tribes helped sway the State of Oregon in deciding to reject Ambre Energy’s construction permit for the port (a decision Ambre is set to appeal), the company has now been hit by news the Army Corps of Engineers has stopped its review of the export terminal. The Army Corps' Portland office cited the Oregon Department of State Lands rejection of the permit requested by Australian firm Ambre Energy for its action, and a spokesman said that continuing the review would be “inappropriate”.

Across the Atlantic to Europe, where Germany announced a decision to limit the financing of overseas coal projects. The country plans to limit the financial support the KfW state development bank can give to coal projects abroad, according to the German environment ministry. The move follows similar steps taken by the US, as well as the World Bank and European Investment Bank. KfW said that its support for coal has been dwarfed by its investments in environmental protection but that it has continued provide support to give energy access to countries that cannot move away from fossil fuels immediately.

And finally, in the week of the Scottish independence referendum, came news that the UK’s last viable underground coal mine may have been saved by the intervention of the National Union of Mineworkers (NUM). The NUM stepped in with urgently needed funds to save the employee-owned mine and provided a £4 million loan to stave off closure. It is times such as these, one might say, when coal industry workers and unions come together to protect their bread and butter – the coal mines themselves – that we are, indeed (and to borrow a phrase from the Scottish referendum debate) “better together”.

Written by Sam Dodson

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