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A week in coal: 26 September 2014

World Coal,

With the UN Climate Summit taking place this week, many in the coal industry will be interested to hear that existing carbon pricing initiatives are too modest in their current climate reduction targets to drive a meaningful transition to low-carbon technologies, according to analysts at Thomson Reuters Point Carbon. Although a number of countries have implemented carbon taxes or emission trading schemes domestically, analysts argue that without more ambitious carbon reduction targets, such pricing mechanisms will fall short of achieving their goal of a shift to low-carbon technologies and industries.

One country to have repealed what was referred to by the International Energy Agency, as “model legislation for developed countries”, is Australia – where the wheels are now in motion for the construction of a 300 km coal rail line. The Australian government has approved Adani’s proposed coal railway to link the company’s coal mines in Queensland with the Abbot Point terminal. The coal mines and railway are part of Adani’s AU$ 2.2 billion development project in Queensland. The approval is a key step in the rail projects progress from the approvals to construction phase.

Less progress, however, on the Polish railways, where over 200 Polish coal miners blocked trains carrying coal from Russia at a border in northern Poland. The miners were protesting against cheaper Russian coal being imported in to Poland, while local mines are struggling. According to a mining union representative, the miners may block the Braniewo-Mamonowo passage until a government representative is dispatched to hear their demands. For the moment then, the Russian coal trains remain stuck in their tracks.

Also seemingly stuck in one place is the government of New South Wales (NSW), which confirmed an extended 12-month freeze on Petroleum Exploration License Applications, including those issued to coalbed methane (CBM) exploration. The NSW government showed no sign of shifting its position on the license freezes, despite the Australian Petroleum Production & Exploration Association (APPEA) pointing out that the state’s 1.3 million gas customers are set to see gas prices increase more than 10% this year, despite NSW possessing considerable reserves and experienced gas companies willing and able to produce local gas for local consumers. The APPEA said that new gas production depends upon successful exploration activity. Without new exploration and production in NSW, it will be very difficult to put downward pressure on NSW gas prices.

Finally to the UK, where funding has been secured for the managed closure of UK Coal’s deep mining business. The financial deal includes a commercial loan of £4 million from government as well as support from other partners, which will allow the company to safely close Kellingley Colliery in Yorkshire and Thoresby Colliery in Nottinghamshire. The funding means there will be no immediate closure of the two deep mines, with a UK Coal spokesman thanking “the government, our people, our customers, suppliers and other interested parties for all of their support”. 

Written by Sam Dodson

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