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A week in coal: 22 August 2014

World Coal,


Kicking proceedings off with a bang, as two blasts this week signalled the start of opencast mining operations at Whitehaven Coal’s Maules Creek project, as full-scale mining begins at the Australian coal mine. According to the company, the Maules Creek project remains on both budget and schedule, with first saleable coal expected to be railed from the mine in March 2015.

Less proactive news from the Mongolian mining sector, however, as reports are verified that coal mining operations at Mongolia’s Tavan Tolgoi have ground to a halt, amid a disagreement between the mine’s operator and contractor. Contracting firm, Macmahon Holdings Ltd said that operations at the mine had been suspended due to a “a range of disagreements” with state-owned mine operator, Erdenes Tavan Tolgoi JSC. The news will not be met kindly by investors watching developments in the land-locked but resource-rich Asian country, who frequently pose questions over the ability of the Mongolian government to handle the country’s burgeoning resource sector.

One of the major challenges facing Mongolia has been to get the country’s mined resources to the dutifully waiting Asian export market. Yet Asian importers of coal could turn to coal mined in the US – as a new study from Duke University claims that doing so could benefit both economies, and the environment. The Duke study claims that, under the right scenario, exporting US coal to power plants in South Korea could lead to a 21% reduction in greenhouse gas emissions, compared to burning the fossil fuel at coal-fired power plants in the US. However, one US coal export project hoping to do just that was dealt a severe blow this week, as Ambre Energy was informed a permit for its proposed coal export terminal on the Columbia River had been rejected by representatives of the State of Oregon. The state said the project was not in the best interests of the state’s water resources.

Across the Atlantic in the UK came news that coal had been knocked off the top spot in the UK energy mix by natural gas. According to figures from EnAppSys, gas contributed 29% of the UK’s electricity in Q2 – a 9% increase on Q1, as coal-fired power plant outages and lower gas prices saw the fuel move back into favour. Coal power, for its part, fell from 35% to 26%. With the onset of warmer weather, operators had chosen to begin maintenance on several coal-fired plants, helping to lower coal-fired generation, while lower-than-expected levels of wind generation also boosted gas.

Finally, news also broke this week that the long-term future of coal in Poland hangs in the balance. Such a scenario perhaps hardly seems believable, given the European country’s reliance on coal for over 90% of its electricity (a fact which has earned coal the name of ‘black gold’ in Poland). Yet the Polish government has nonetheless published a draft energy policy, which looks to reduce dependency on coal in favour of a low-carbon energy mix. The strategy for this move will see Poland invest in nuclear power and renewables, as the country looks to reduce coal consumption by almost 40% by 2050. Whether the drafted policy remains an impossible pipe dream, or a long-term viable option remains to be seen. For the Polish coal sector: only time will tell. 

Written by Sam Dodson

Read the article online at: https://www.worldcoal.com/coal/22082014/a-week-in-coal-22-august-2014-1245/

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