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A week in coal: 29 August 2014

World Coal,


News that deep, underlying problems persist within the Indian coal sector may not come as much surprise to some. However, news this week that the country is facing an acute shortage of coal – just days after the Supreme Court ruled that over 200 captive mining licenses issued between 1993 and 2011 were illegal – is nonetheless another sign that the Indian coal industry is in dire need of reform. Stockpiles of coal currently stand at their lowest levels since mid-2012 – when millions of people were left without power in one of the world’s worst blackouts. With half of India’s thermal coal-fired power plants reporting less than a week’s supply of coal on hand, new prime minister Nerendra Modi must act swiftly to ensure there is no repeat of the 2012 blackouts.

Another country in need of coal is Germany, at least that is, according to the country’s energy regulator. The Federal Network Agency (BnetzA) this week announced the country is overly reliant on Russian gas, and that, as further nuclear power plants are closed in the wake of the 2011 Fukushima nuclear disaster, coal must be used to ensure a reliable supply of energy to the European behemoth’s national grid.

Yet calls for a reduction in the use of coal as a fuel source continue to be heard worldwide. This week, the University of Sydney caved into an email campaign organised by Greenpeace and announced that it would halt its investment in coal. Stephen Galilee, chief executive of the New South Wales Minerals Council claimed Sydney University had succumbed to “the bullying of environmental activists masquerading as financial advisers”. The university is considering divesting its coal assets, the most significant of which is an AU$ 900 000 holding in Whitehaven Coal.

Whitehaven Coal may well hold unhappy memories for former billionaire Nathan Tinkler, who was forced to give up his stake in the company to pay off creditors last year. The maverick young entrepreneur was this week dealt a blow in his attempts to make his coal mining comeback, as Peabody Energy announced that it had pulled the plug on the sale of its Wilkie Creek mine to Tinkler’s Bentley Resources. Peabody claimed Tinkler’s company had missed installment payments on a cash-and-debt deal for the coal mine worth US$ 130 million, and that it would not “evaluate alternatives” for the closed mine in Queensland’s Surat Basin.

Finally, there was another twist this week in the tale of Drax’s attempts to win fixed-price subsidies from the UK government to help convert two of its coal-fired units to run on biomass pellets. Drax has lost a lengthy legal battle with the UK government, after the Court of Appeal upheld an initial ruling in April that denied the Yorkshire-based power plant a contract for converting one of its coal-fired units to run on biomass. The company had been expected to win the ruling, after the High Court ruled in its favour in July. However, the Department for Energy and Climate Change (DECC) appealed the High Court’s ruling. Drax has since issued a statement to say it will not appeal against this decision, thus putting to an end a complex saga over what kind of subsidy the company will receive.

Written by Sam Dodson

Read the article online at: https://www.worldcoal.com/coal/29082014/weekly-news-wrap-up-29-august-2014-1266/


 

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