Steve Doyle
The past five years in the coal sector have shown us what happens when coal executives, investment bankers, consultants, equity investors and creditors are wrong in a big way. Other people’s money gets squandered; venerable coal companies file for bankruptcy; too many valiant coal miners lose their jobs; too few coal executives lose theirs. I would like to think that we learn from our mistakes, but my cynical side reminds me that we will probably make similar mistakes in the future. History does not always repeat, but it usually rhymes.
The coal sector’s bet was a binary one: coal demand would grow and it geared up accordingly. But in the seaborne market, coal demand from China has declined by 120 million t since 2014 and China’s exports of steel and coke probably took an additional 30 – 40 million t of annual demand away from the seaborne metallurgical coal market. China’s coal imports could very well decline by another 30 – 50 million t during the course of 2016. Meanwhile, the coal juggernauts had geared up to supply a volume that was even higher than the lost demand. The present price environment is evidence of that miscalculation.
In the US market, the coal producers had factored-in declining demand from utilities due to various EPA regulations, but they had not factored-in how much market share would be captured by the natural gas sector. The revolution in natural gas drilling and extraction not only resulted in much lower operating costs than anyone had expected, it also caused a glut of supply, which could only be rebalanced in the short and medium term by forcing it into the power sector. By the end of this year, thermal coal demand will have dropped 150 million t since 2014. To make matters worse for the US coal miners, utility inventories were so high entering 2016 (approximately 180 million t), the expected drawdown will provide yet another headwind. Adding insult to injury, export demand will have declined by 40 million t during this same period.
Production cutbacks and closures, which began in 2014, accelerated in earnest during 2015 and reached an epic level in 4Q15 and in the early months of 2016. What has captured my attention is from where the most recent cutbacks have been coming: highly efficient longwall operations. Bowie’s closure of the Bowie No. 2 operation in Colorado and CNX’s idling of its new Harvey mine in Northern Appalachia are the most recent examples, but the past few months have included short- and medium-term cutbacks by virtually all of the major longwall operators. Due to the high fixed-cost component of a longwall mine, the incremental tonne has always been considered the least expensive. The current round of cutbacks is the market’s way of saying in a loud voice that low prices no longer matter; it simply has no use for anyone’s incremental supply.
US coal production will probably overcorrect as it attempts to match output to weak utility demand and inventory drawdowns. On the positive side, natural gas demand will gradually grow as new industrial facilities come online to convert the inexpensive feedstock into marketable derivatives, pipeline exports into Mexico expand and LNG exports into the seaborne market start. Natural gas production will level off due to declining drilling in the natural gas fields and from the ailing oil sector, which will generate less associated gas. Natural gas prices, in turn, will finally recover to the degree that annual utility demand for coal could be a sustainable 670 million t.
Can the US continue to play its historical role as swing supplier to the seaborne market? After all, the export infrastructure remains intact and, from a cost perspective, the surviving coal sector has never been leaner, consisting mainly of highly efficient longwall operations in the Illinois Basin, Northern Appalachia, Montana and Colorado/Utah, and low-cost surface mines in the Powder River Basin. The answer is yes, but I am uncertain at what price. Depending on weather and natural gas prices, the US utilities could have occasion to call on a portion of their coal-fired generation fleet’s unused capacity, which could easily consume an additional 60 – 80 million t. In the seaborne market, a supply event (Big Wet III?) or a demand event (poor hydro output in China?) could easily create an equivalent shortfall, of which a portion could be supplied by the US. If significant demand from the US utility sector or the seaborne market materialised, coal companies would understandably command higher prices to bring any ‘flex coal’ to market. However, if the US and seaborne high demand scenarios coincide, coal prices have the potential to skyrocket.
I have no doubt the major exporting countries can serve seaborne demand in the long-term with little help from the US; however, history has taught us the speed of coal demand is always much faster than the speed of coal supply. Price volatility is the result of this disconnect and the rewards will go to those who are currently preparing for that inevitability.
Note: This article first appeared in the April 2016 issue of World Coal.
About the author: Steve Doyle has over 30 yr of experience in the coal trading business, founding Doyle Trading Consultants in 2002. He is now President of BtuBarron LLC.
Edited by Jonathan Rowland.
Schaeffler has introduced a new generation of large-size bearing housings to Australasia and are engineered to increase the life of fitted spherical roller bearings by up to 50% compared to conventional plummer block housings.
The FAG Plummer Block Housing SNS – for shafts from 115 mm to 530 mm and from 4 7/16 in. to 19 1/2 in. dia. – is designed to reduce the total cost of ownership of industrial machinery widely used in Australia and New Zealand, including machinery operating in aggressive environments.

The radically extended lifespan is made possible by its housing design, which ensures optimum load distribution in the bearing, indicated Schaeffler Australia Pty Ltd Industrial Sector and Product Manager, Martin Grosvenor.
The housing also provides a very high sealing action against the ingress of contamination under extreme environmental conditions, making it suitable for use in aggressive environments commonly encountered in industry.
Different sealing variants allow matching of the SNS to specific environments with particularly harsh contaminant and dust conditions. An axial lubrication groove in the upper section of the housing ensures optimum lubricant supply for bearings in every bearing position (for example, using FAG CONCEPT 8 compact lubrication system for grease and oil).
The design also integrates good anti-corrosion characteristics and reduced cleaning requirements, due to inclined run-off areas as well as a projecting upper housing section.

These qualities – combined with increased strength and shock resistance due to the use of (EN-GJS-400) spheroidal graphite cast iron as standard – make the SNS particularly suited to applications in industries, such as mining and energy, oil and gas processing, materials handling (including port loader facilities), manufacturing and steel, primary product and food and beverage processing, pulp, paper, packaging and forestry, and major infrastructure and water and waste water plants.
“The focus during development of the new SNS plummer block housing was on compliance with customer and application-specific requirements,” said Grosvenor. “Criteria such as increasing efficiency, robustness and improved condition monitoring played a major role.”
Edited from press release by Harleigh Hobbs
Stanmore Coal’s Isaac Plains metallurgical coal mine has processed its first product coal, according to a company announcement. The coal was processed at the mine’s coal handling and preparation plant (CHPP).

First product coal on stockpile. Image: Stanmore Coal.
“It is my great pleasure to announce the production of our first coal at the restarted Isaac Plains coking coal mine,” said Stanmore’s CEO, Nick Jorss. First production marks a significant milestone for the company and signifies our recent transition from explorer to producer.”
Stanmore Coal bought the shuttered Isaac Plains mine last year from Vale and Sumitomo Corp. for AUS$1. The acquisition included all assets relating to the mine, including the CHPP, as well as logistics infrastructure. Stanmore also agreed to take on responsibility for the AUS$32 million rehabilitation obligation for the site.
The mine produces metallurgical coal for export to Asian steelmakers. The company is planning its first dispatch of coal customers in early May, said Jorss.
Edited by Jonathan Rowland.
DryShips Inc., an international owner of dry bulk carriers and offshore support vessels, has sold three of its vessels, the Fakarava, Rangiroa and Negonego, along with the associated bank debt, to entities controlled by the company’s Chairman and CEO, George Economou.
The vessels were sold at fair market value as supported by independent third party broker valuations, and the transaction was approved by the disinterested members of the company’s Board of Directors.
As a result of this transaction, the company’s total bank debt has been reduced by US$102.1 million, and currently stands at US$213.7 million.
The company has also agreed to sell all of its shares in Ocean Rig UDW Inc. to an unrestricted subsidiary of Ocean Rig for total cash consideration of approximately US$49.9 million. The sale proceeds will be used to partly reduce the outstanding amount under the Revolving Credit Facility (Revolver) provided to DryShips by a company controlled by Economou and for general corporate purposes.
In addition, DryShips has reached an agreement under the Revolver whereby the lender has agreed to (i) release its lien over the Ocean Rig shares and (ii) waive any events of default, subject to a similar agreement being reached with the rest of the lenders to Dryships, in exchange for certain LTV covenants being introduced under the Revolver. This transaction was approved by the disinterested members of the company’s Board of Directors on the basis of a fairness opinion and is subject to standard closing conditions. After this transaction, the company will no longer hold any equity interest in Ocean Rig.
Ziad Nakhleh, Chief Financial Officer of the company, commented: “We are pleased to have reached a preliminary agreement with one of our lenders to waive any events of default and we hope that the rest of the lenders follow suit, recognising the pro-active approach of the company to reduce its debt burden and cash flow burn.”
Edited from press release by Harleigh Hobbs
Tyler Hodge, US Energy Information Administration
Last year marked the first time on record that the average capacity factor of natural gas combined-cycle plants exceeded that of coal steam plants. The power industry has been running natural gas combined-cycle generating units at much higher rates than just 10 yr ago, while the utilisation of the capacity at coal steam power plants has declined. The capacity factor of the US natural gas combined-cycle fleet averaged 56% in 2015, compared with 55% for coal steam power plants.

The mix of energy sources used in US electricity generation has changed dramatically over the past few years. This change is particularly evident in the shift from the use of coal to natural gas for power generation. The industry has been building new natural gas capacity and retiring coal plants, but another important factor behind the changing generation mix is the day-to-day pattern of how existing power plants are used.
Coal power plants primarily rely on steam-driven generating units. In contrast, power plants fuelled by natural gas rely on a variety of technologies. Natural gas-fired generating units driven by combustion turbines or steam turbines accounted for about 28% and 17%, respectively, of total natural gas-fired capacity in 2015. Combined-cycle plants, which are designed as an efficient hybrid of the other two technologies, accounted for 53% of gas-fired generation capacity and tend to be used more often than the other types of natural gas generators, as measured by capacity factors.
Capacity factors describe how intensively a particular generating unit or a fleet of generators is run. For instance, a capacity factor near 100% means that the unit is operating almost all the time at a rate close to its maximum possible output.
When natural gas prices exceeded coal prices by a large margin, as was typically the case over the 2005-08 period, electricity systems where both natural gas-fired combined-cycle and coal-fired power plants were available to serve load would typically run combined-cycle units only after making maximum use of available coal-fired generation. As natural gas prices have declined, power plant operators have found it more economical to run combined-cycle units at higher levels.
The capacity factor of the US natural gas combined-cycle fleet has risen steadily from an average of 35% in 2005 to more than 56% in 2015. Although there is a wide variation of capacity factors for natural gas combined-cycle power plants, many of these units operated in the 50% –80% range in 2015. In 2005, combined-cycle units commonly operated at capacity factors lower than 30%.

Coal steam power plants require more energy input per megawatt-hour of generation than natural gas-fired combined-cycle plants. Yet, the low cost of coal relative to natural gas until recent years favoured the use of coal-fired generating units to fulfill baseload electricity demand, leading plant operators to run these units at rates close to their output capacity during peak demand hours. During off-peak hours, such as overnight, coal plants generally continued to operate. But, in areas with large amounts of available coal or nuclear generation capacity, many coal plants would run at rates closer to their minimum operable capacity.
Nearly half of all coal plants ran at capacity factors above 70% in 2005. Since 2012, coal plants have faced much more competition from natural gas combined-cycle units for supplying baseload demand. In 2015, less than one-fifth of all coal plants operated at capacity factors higher than 70%.

Edited by Jonathan Rowland. Source: EIA Today in Energy.
Haver & Boecker has announced a three-year leasing option for its Pulse vibration analysis service programme, giving mining and aggregate customers insight into their equipment’s performance. The leasing options – basic and professional – fit small and large operations. Both programmes include an industrial-grade tablet computer, eight tri-axial sensors, a monthly maintenance package and optional expert analysis reports.
Haver & Boecker designed the Pulse programme specifically to monitor the health of vibrating screens to ensure optimum screening performance and equipment durability. The reporting and historical tracking of the machine’s performance gives customers the information needed to maximise uptime and productivity – significant contributors to profitability.
“We understand screening equipment is a significant portion of an operation’s budget, which is why we developed the Pulse leasing programme,” said Karen Thompson, President of Haver & Boecker Canada. “The Pulse leasing option offers customers the tools to optimise screening efficiency on a daily basis. This helps increase their operation’s profitability by minimising downtime, as well as maintenance costs.”
The Pulse system uses an industrial-grade tablet computer that connects wirelessly with eight tri-axial sensors. The sensors attach to key places on the equipment and send up to 24 channels of data to the tablet, which displays a real-time view of the machine’s orbit, acceleration, deviations and more.
For an additional cost, the Haver & Boecker engineering team will analyse the results. The team then provides the customer with a report that includes a thorough examination of the machine’s performance and recommendations for improvement. If the results require further examination, a technician will schedule an onsite inspection.
For easy accessibility, customers can store all vibration analysis reports electronically in an online database: the Pulse Information Portal. The customer can download machine data in two formats. The first format is the Orbit Report, which provides a visual of orbit and wave form, as well as data about acceleration, stroke, speed and phase angle. The software processes Fast Fourier Transformation, or FFT, plots for values for three channels of data for each measuring point.
The second format is the Tuning Report, which extrapolates side to side, feed to discharge and diagonal deviations between measurement points while providing recommendations on balance, acceleration, stroke and speed.
Haver & Boecker designed Pulse for easy setup and operation in difficult environments where screening takes place.
Edited by Jonathan Rowland.
Leigh Creek Energy Ltd (LCK) is an emerging gas company focused on developing its Leigh Creek Energy Project (LCEP), located in South Australia, which will produce high-value products, such as electricity, methane and fertilizer from the remnant coal resources at Leigh Creek.
LCK has signed a heads of agreement (HoA) with Shanghai Electric Power Generation Group, which is the main business sector of Shanghai Electric Group Co. Ltd.
In relation to the joint development of a power plant in South Australia, in accordance with the HOA, LCK and the company would work together to establish a joint venture company in South Australia, with the intent to build, own and operate a gas-fired power plant.
Commenting on the signing of the HoA, Justyn Peters, Executive Chair of LCK said: “We are very pleased to have developed our relationship to the point where we have now agreed to sign a HoA. The generation of base load power through a gas fired power station is important both to our company and to South Australia. We see this as a great first step in our development as an energy company.”
Peters concluded: “The building, owning and operating of a power station ensures the success of our project, but also has the ability to provide cheaper, reliable power to industry and mines in South Australia. I look forward to updating the market with the progress of this project and additional news.”
This agreement with Shanghai Electric, one of the largest companies in the world in its sector with global operations and alliances, is a major endorsement of LCK’s LCEP.
Edited from press release by Harleigh Hobbs
Cargotec has appointed Mikko Puolakka, M.Sc. (Econ.), (b. 1969) as the company’s new Chief Financial Officer, effective 1 May 2016.
Puolakka will be a member of the Executive Board and report to CEO Mika Vehviläinen.
Mikko Puolakka has previously held the positions of CFO at Outotec Oyj and CFO at Elcoteq SE, as well as several financial management positions in Elcoteq and in the Huhtamaki Group.
“I warmly welcome Mikko to Cargotec. He brings with him a solid experience in widescale financial leadership and development. I expect a strong contribution from him to the company strategy execution and to further development of our financial processes,” commented Cargotec’s CEO Mika Vehviläinen.
“Cargotec’s global business, the further development of financial management and the possibility to participate in a central role to the realisation of company targets will make my work particularly interesting. I am excited to join Cargotec, a company that is a recognised leader in its field,” said Mikko Puolakka.
As previously announced by the comapny, Cargotec’s current CFO Eeva Sipilä will take up the position of CFO at Metso Corp. in the beginning of August.
Edited from press release by Harleigh Hobbs
Brazilian mining company, Vale, has sold its stake in Companhia Siderurgica do Atlântico (CSA) to German industrial conglomerate and CSA joint venture partner, thyssenkrupp. The 26.87% stake was sold for a “symbolic price” as part of Vale’s initiatives to streamline its asset portfolio, the mining company said.
Located in the industrial district of Santa Cruz in the state of Rio de Janeiro, CSA is an integrated steel mill complex that produces steel slabs for export. The plant has the capacity to manufacture up to 5 million tpy of steel.
In 1Q16, CSA posted a loss of €74 million as a recession in Brazil and a glut of steel on the global markets have put pressure on the business.
On completion of the sale, existing shareholder and other operative contracts between Vale and CSA will be renegotiated or cancelled, although Vale will continue to supply iron or the plant. The deal also includes an earn-out clause, which entitles Vale to a portion of any future sale of CSA.
According to the German company, the acquisition will “reduce complexity and risks, and increase its room for maneuver for the further development of CSA.”
The transaction is also subject to approval by thyssenkrupp’s supervisory board and the Conselho Administrativo de Defesa Econômica (CADE), Brazil’s competition regulator. But, according to research company, CRU, the transaction may have been timed to take advantage of the current political unrest in Brazil to avoid government intervention in the sale.
“This transaction reinforces Vale’s strategy to sell non-core assets and its commitment to preserve financial strength,” the company said in a press release.
CSA was opened in 2010 as part of an costly effort by thyssenkrupp to grow its business in the Americas. Much of the €12 billion investment, which included CSA and another plant in Alabama in the US, has since been written off by the German company. The Alabama plant was sold in 2014 and thyssenkrupp has previously expressed an interest in selling CSA.
CSA’s simplified ownership structure may now make a sale easier – although the current woes in the steel industry will not make it an easy sell.
SGS has completed its acquisition of the South African mining EPCM business, Bateman Projects, from Tenova.
Bateman Projects specialises in providing process plant design and engineering, project management and commissioning and optimisation services for mineral processing plants for a variety of minerals, including gold, iron ore, copper, uranium and coal.
“This acquisition will significantly expand and improve our mine and plant services activities, providing SGS with a team of high qualified staff with extensive project experience in key commodities,” said Frankie Ng, CEO of SGS, when the acquisition was announced in October 2015.
Tenova will continue to develop its mining and minerals business through its Takraf and Delkor businesses, focusing on the equipment and process technology sector.
Bateman Projects is based in Johannesburg and its active throughout South Africa and Sub-Saharan Africa. It generated revenues of more than €30 million in the financial year closing 30 June 2015.
The oldest independent coal company in the US, Westmoreland Coal Co., has appointed Gary Kohn to Vice President of Investor Relations. Kohn will serve as a member of the leadership team effective 11 April 2016.
“Adding Gary with his extensive investor relations, finance and strategy experience underscores our commitment to build even stronger relationships with the investment community,” said Westmoreland’s Chief Executive Officer Kevin Paprzycki. “Gary’s focus will be on strengthening our investor relations programme so that it is of the highest quality and effectiveness.”
Before joining Westmoreland, Kohn served in leadership roles in investor relations, treasury and finance at companies, including First Data, Western Union, Ciber and Intrepid Potash.
Edited from press release by Harleigh Hobbs
A second review of the Russell Vale coal mine expansion by the New South Wales Planning Assessment Commission (PAC) has thrown doubt on the project.
Despite acknowledging the short-term benefits of the project – which includes the provision of 300 jobs for five years, about AUS$23 million in royalties to the state government and AUS$85 million in CAPEX and other direct and indirect flow-on effects – the PAC concluded that these were “most likely outweighed by the magnitude of impacts to the environment”.
In particular, the PAC identified the risk of water loss, risk to upland swamps, noise impacts on nearby residents, potential hydrogeological impacts and a loss of ecosystem functions.
In response, Russell Vale’s owner, Wollongong Coal, said it “worked tirelessly for several years to ensure the proposal met the requirements of government policies,” noting that the New South Wales Department of Planning and Environment had already recommended approval of the project.
Wollongong Coal added that it would now “review the PAC’s report in detail before it determines its future course of action.”
The Russell Vale mine has been operating since the late nineteenth century and is currently in care and maintenance.
It is located in Sydney’s water catchment areas, leading utility, WaterNSW, to warn that extension of mining there could significantly deplete the reservoirs that supply Australia’s largest city.
The PAC also noted concerns from the Office of Environment and Heritage that the project could drain upland swamps known to be home to the protected giant dragonfly.
The PAC report might through a number of other mine expansion projects in the Illawara region into doubt, including South32’s plans to expand mining at Dendrobium and the expansion of Peabody Energy’s Metropolitan mine.
“The NSW government should act now to protect the Special Areas [of Sydney’s water catchment] from any further mining by refusing the submitted plans for more mining at Dendrobium and the soon to be submitted plans for the next stage of the expansion of the Metropolitan mine,” Dr Peter Turner of the National Parks Association told the Sydney Morning Herald.
Hitting back at detractors, however, Wollongong Coal said it considered its assets – including Russell Vale – to be a “critical component to an integrated long-term economic plant for the [Illawara] region.”
“While the PAC is correct in its assertion the project is short term in nature, its approval was part of Wollongong Coal’s longer-term strategy to re-establish a stable and sustainable operation with benefits extended far beyond those of the Underground Expansion Project,” Wollongong Coal concluded.
Edited by Jonathan Rowland.
Argentinean power plant operator AES Argentina Generacion S.A. (AES) has ordered Terex Port Solutions’ Terex® Gottwald Model 2 portal harbour crane in the G HSK 2224 variant from TPS.
As of the end of 2016, AES will use the cargo handling machine at its 1540 MW power plant in San Nicolás de los Arroyos to unload coal imported from Colombia and South Africa. The G HSK 2224 crane will be the first Model 2 in the world designed as a portal harbour crane. It will replace the ageing cargo handling equipment in the river terminal located approximately 200 km to the north west of the Atlantic estuary of the Rio Paraná.
The versatile portal harbour crane based on Terex Gottwald mobile harbour crane technology features a 32 t grab curve and a maximum lifting capacity of 80 t. It offers an outreach up to 40 m and maximum lifting speeds of 85 m/min. and will be used at the terminal of the AES power plant for efficient coal handling on vessels of the panamax class.
The machine will be driven by external power from the terminal’s own supply. TPS will adapt the crane portal with 10 m track gauge and 6 m clearance height to individual local conditions. This includes rail-bound travel units that comprise a total of 24 wheels – six in each corner – in order to comply with maximum permissible rail loading.
Guillermo Paponi, Operations Director for Argentina, commented: “With the G HSK 2224, we have opted for a state-of-the-art solution that specifically meets our requirements for cargo handling rates and design of the crane portal and is also based on proven Terex Gottwald mobile harbour crane technology.”
Terex Gottwald portal harbour cranes can be incorporated into both existing and new terminal infrastructures and particularly allow for operation of conveyor belts, trains and road trucks below the portals. According to the company, there is currently increased demand in South America for mobile harbour crane technology on rail-mounted portals.
Daniel Vanegas Torres, Regional Sales Manager TPS, explained: “In Brazil, two Model 6 and two Model 4 portal harbour cranes are already working in the demanding area of fertilizer handling. The four machines are each tailored to very specific individual terminal requirements. We are delighted that a customer in the neighbouring country of Argentina has now opted for one of these adaptable cranes – a success to which Schoss S.A., our TPS distributor from Argentina, has also contributed.”
Edited from press release by Harleigh Hobbs
Australian engineering company, RCR Tomlinson, is to exit the coal mining services business on the back of pressure from mining companies to reduce pricing.
“The continued pressure of service providers to reduce pricing is unsustainable,” the company said in a statement. “Provision of services is unlikely to return to profitable business in the foreseeable future.”
As a result, RCR is closing twelve unprofitable businesses that re highly exposed to this type of mining services. RCR will take a AUS$35 million non-recurring impact for closing the operations.
The company will instead focus on renewable energy projects, saying it would divert existing resources to “support our aspiration in renewable energy initiatives.”
Edited by Jonathan Rowland.
Pan African has assumed control of the Uitkomst coal mine in South Africa after acquiring the mine for ZAR 176 million (US$11.7 million) from Oakleaf Investment and Shanduka Resources.
The mine produced 412 000 t of ROM coal and 278 000 t of saleable coal between 1 July 2015 and 29 February 2016. It has an estimated 28 years life of mine.
“We are pleased to have finalised the transaction and we welcome the Uitkomst colliery employees to the group,” said Cobus Loots, CEO of Pan African. “The transaction is expected to be value accretive to Pan African.”
The Uitkomst mine will now implement a Black Economic Empowerment (BEE) transaction to boost the mine’s ownership by historically-disadvantaged groups by 9%.
This 9% ownership will be financed by the mine, which will retain 80% of the dividends due to the BEE shareholders as repayment over a period of 10 years.
Uitkomst joins Pan African’s gold and platinum holdings in South Africa, which producer over 100 000 oz of gold and 8000 oz of platinum group metals per year.
Atrum Coal’s shareholders have voted down two resolutions from company founder and former director, Gino D’Anna, which aimed to remove two of the company’s directors.
At an extraordinary general meeting (EGM) on 1 April, shareholders holding 59.3% of the company’s stock voted against the resolutions, which would have removed Steven Boulton and Cameron Vorias, from the board.
“The shareholders did not support this action from Mr D’Anna,” said Bob Bell, Atrum’s Executive Chairman. “As previously stated, the company has benefitted from the input from both Mr Vorias and Mr Boulton since there appointments and will continue to do so into the future.”
Before the vote, Bell had criticised the calling of the EGM as an “unnecessary distraction of management and board attention that would been better put to use in the affairs of the company.”
Bell was also scathing of the resolutions, noting that since D’Anna had resigned from the Atrum board last year, he “has not been involved in any meeting of the board” and is “therefore not in a position to comment on the individual contributions of Mr Vorias and Mr Boulton.”
The EGM was the latest spat in a dispute between D’Anna and co-founder of Atrum, Russell Moran, and the current board. D’Anna and Moran were forced out of the company last year after alleged misconduct, although both retain significant shareholdings.
In March, D’Anna and Moran announced their new company, BC Anthracite, had been awarded 36 coal licences in the anthracite fields of British Columbia, Canada, adjacent to Atrum Coal’s existing Groundhog project. That move prompted legal action from Atrum Coal.
Away from the boardroom shenanigans, Atrum Coal announced that it has settled a promissory note payable to Anglo Pacific Group, which had a balance of US$1.4 million at the end of March. The note was settled through payment of US$0.6 million and the granting of a new royalty.
“We are pleased to have settled the Anglo Pacific promissory note in a manner that conserves the company’s current cash reserves,” said Bell.
Edited by Jonathan Rowland.
New research in Scotland has stressed the need for a clear government policy that positions enhanced oil recovery (EOR) in the North Sea as part of a managed transition towards a low-carbon economy in the UK.
The findings from a joint research project between Robert Gordon University (RGU) in Aberdeen, UK, and Scottish Carbon Capture & Storage (SCCS) highlight differing attitudes when people consider how current government priorities on maximising oil recovery relate to climate change objectives.
The use of carbon dioxide (CO2) captured from the power and industry sectors could boost oil production from mature oil fields and providing long-term storage of the greenhouse gas as a means of addressing climate change.
Findings from the research, conducted by Dr Leslie Mabon from RGU’s School of Applied Social Studies, and Chris Littlecott from SCCS, have been published in the International Journal of Greenhouse Gas Control.
Their paper is entitled “Stakeholder and public perceptions of carbon dioxide enhanced oil recovery (CO2-EOR) in the context of Carbon Capture and Storage (CCS) – results from UK focus groups and implications for policy.”
It assesses the views of citizens and expert stakeholders regarding the government’s policy push to maximise oil recovery in the North Sea against the need to combat climate change and the UK’s transition towards a low-carbon economy.
CO2-EOR is distinct from other forms of EOR as it has the potential to be linked with CCS and could form part of a managed transition for the UK economy. Other forms of EOR are already in use in the North Sea, but do not provide any direct climate benefits.
Based on focus group data from Aberdeen, Edinburgh and London, the research assessed how stakeholders and members of the public responded to four varying scenarios for CCS with CO2-EOR in the North Sea, and drew implications for deployment in other mature fossil fuel basins around the world.
Dr Mabon said: “Interest is growing in carbon dioxide enhanced oil recovery as an additional economic incentive for CO2 injection and the acceleration of CO2 storage as a means of addressing climate change.”
Mabon continued: “However, given increasing concerns and campaigns against the continued extraction of fossil fuels, it is possible that CO2-EOR may unintentionally hinder CCS by reducing support from neutral or cautiously supportive voices from Non-Governmental Organisations.”
Dr Mabon and Mr Littlecott found that scenarios that emphasised maximising oil recovery were met with scepticism or even opposition, and that there is an expectation for national governments to lead and ensure CO2-EOR and CCS are developed in the public interest.
Littlecott said: “Through our research we found that all stakeholder groups wanted to look beyond scenarios that focus purely on maximising economic recovery of North Sea oil.
“Citizens and experts alike recognise that action must be taken to reduce CO2 emissions, and want to see coherence between these different government objectives,” Littlecott continued. “We also found that the public recognises that fossil fuels are currently deeply embedded in society, with Scotland particularly dependent on the offshore oil and gas sector. There was therefore significant interest in seeing a fair transition pathway put in place for workers.”
He further added: “Within this context, we found that there may be qualified support for CCS with CO2-EOR to make best use of existing fields whilst decarbonising the power and industrial sectors at the same time. However, for this support to emerge there is a need for a joined-up government policy that positions CO2-EOR firmly within a managed transition towards a low-carbon economy.”
Development and deployment of conventional CCS has been slower than expected, with the UK government withdrawing support for its £1 billion Commercialisation Competition in Autumn 2015.
Mabon said: “There is an increasing awareness of the need to imagine a future for the North Sea that balances our oil and gas needs with our obligations to climate change mitigation and the need to develop a sustainable economic base for the northeast of Scotland.”
“The idea of a ‘managed transition’ for the North Sea from existing oil and gas operations has started to appear a lot more widely in the political sphere, with the recent decline in oil prices bringing the future of the North Sea and the northeast of Scotland into even sharper focus.”
Mabon concluded: “CO2-EOR might offer one way of enacting this, by capturing emissions from industrial sources on land and using this to extract remaining required oil in a more sensitive manner. This could make a contribution towards mitigating the effects of climate change that also gives the North Sea, and the communities that depend on it for income and employment, a gentler transition away from oil and gas. But for this to happen, what came across loud and clear from our research was that there is an expectation that the government will lead on decarbonisation and create a joined-up, coherent policy that balances oil production with our climate change obligations.”
Tears were shed as Britain’s last remaining deep coal mine closed in North Yorkshire in December, bringing the curtain down on an industry that once dominated great swathes of the country.
Where there were once one million coal miners in the UK, that number has been decimated and is now limited to a small number of men working at opencast mines.
But despite this, the world’s largest independent lubricant manufacturer, FUCHS, has made the decision to keep its Centre of Excellence for underground mining in England.
FUCHS operates in six continents – every one bar Antarctica – and all overseen from FUCHS’ UK base in Hanley, Stoke-on-Trent.
Far from scaling back its mining division, FUCHS has been able to expand and grow in countries like Australia, US, Russia and – in the last decade China – where both longwall underground and surface mining remain key sectors.
“FUCHS, having its mining headquarters here in Staffordshire, goes back to the days of Century Oils, which was a company that grew rapidly by supplying lubricants to the local mining industry in Stoke-on-Trent,” said Martyn Rushton, Head of Global Mining for the FUCHS Group.
“It’s an historic relationship which goes back well over 100 years. To still have the Centre of Excellence held here at FUCHS UK makes us all exceptionally proud.”
FUCHS acquired Century Oils in 1991 and set its sights on new territories.
Martyn said: “Throughout the 1980s, the UK longwall mining industry was declining rapidly. It was a horrendous period. During the strikes we had to make redundancies and, when the strike was in full flow, we couldn’t even get to the mines.”
“We had to make some deliveries because there was equipment which had to be maintained from a safety aspect. I remember crossing the picket lines and that wasn’t pleasant at all,” Martyn continued.
“But we came through that and when FUCHS took over Century Oils, the focus really switched to overseas, including non English-speaking countries. We went to Poland, Russia and the Ukraine where there was a huge amount of business to be won.”
Today FUCHS’ most significant markets include South America, South Asia and the Nordics.
Each of these present their own unique challenges. Martyn detailed: “Often these mines are in the middle of nowhere, which can be a logistical nightmare. And then each country is different. In Ukraine at the moment, for example, there is still conflict. All of the coal that heats the Ukraine comes from the Donets Basin. We are still managing to supply product, manufactured in the UK, to that area every week.”
“Some of the coal mines have been critically damaged and may never open again – but even during hard times it’s in everyone’s interests to keep some of the lights on.”
“Russia is a huge market for us”, Martyn explained, “but we’ve seen the devaluation of the Russian Rouble and Western products can be very difficult to sell – or impossible under an embargo. However, what we do have in Russia, is a newly-commissioned modern manufacturing plant, which has meant we’ve been able to maintain our sales. We supply the plant with some very special super concentrates made in the UK.”
“The Kuznetsk coal basin is in the middle of the Siberian Plain. The Siberian winter can be quite challenging. The coldest I’ve experienced is minus 38 Celsius. It was certainly a test for our Western clothing.”
He said the key to FUCHS’ success is respecting different cultures and offering personal service and expertise. “Our technical people are brought from within the industry – and that’s crucial.”
“We bring in mining engineers and FUCHS can train them in lubrication. Industry knowledge is key when you’re sitting there with a mining engineer. They recognise you know what you’re talking about.”
“Deep mining is very dangerous and our customers need to know they can trust us. In a deep mine, you stand on a lift and you might go 600 or 800 metres underground. The products have to stand up to the harsh conditions and they have to do their job.”
“We send out our people to countries to provide training seminars and show them how to maintain fluids and so on. We also bring people to the UK and use our fantastic facilities and labs dedicated to mining. We show our customers the benefits of the products and that is key.”
“Moreover, the members of our global mining division, from different subsidiaries, meet on a regular basis, particularly at large trade fairs, to exchange ideas.”
Martyn predicts difficult years ahead for the mining industry due to the plummeting price of coal, climate control issues and the continuing decline in the steel industry.
Martyn said that longwall coal mining will continue to grow in some developing countries as Industrial growth requires the continued use of coal – but he said FUCHS’ main focus is growing the non-longwall mining side of the business, particularly in South Africa, where in 2014 FUCHS acquired Lubritene.
“This year will be tough for all mining activities,” he said. “Will coal mining continue? Yes, and it will expand in certain countries. We are continuing to develop and supply specialised products, such as optimised coal froth flotation reagents for recovery of coal from mines. FUCHS has a specialist flotation facility in Poland with a dedicated laboratory, working with raw feed from the mines, formulations comprising Frothers and Collectors can be optimised. Flotation reduces the % of Ash in the coal making a valuable fuel for energy production which would otherwise be lost as waste”.
“In places like China, coal mining will diminish because it has to reduce its emissions. Going forward, our main aim is to grow the surface mining side of the business globally,” he explained. “The demand for minerals will increase. We’re going more and more electric so there will be an increase in the need for copper, for example.”
And last but not least, Sustainability is a key strategy for the FUCHS Group. In a recent supplier evaluation programme published by EcoVadis for GlaxoSmithKline, FUCHS Lubricants UK were awarded a gold recognition level as one of the top 5% performers.
“There is huge potential for growth – worldwide there are still many opportunities for the team to pursue, and we’re delighted to be driving that forward from an area with such a rich mining heritage as Staffordshire,” concluded Martyn.
Edited from press release by Harleigh Hobbs
A global leader in bulk material handling technology, Martin Engineering, has introduced its new Pin LatchTM Secondary Belt Cleaner, a tungsten carbide-tipped secondary cleaner that slides in and out for service without requiring any tools.
The design features a square, tabbed mainframe with segmented blades connected by a simple pin mechanism, allowing easy access and quick blade replacement by semi-skilled personnel.

The new cleaner design can drastically reduce service time, since no alignment of the blade is required.
The pin latch design provides adjustable tension for varying conditions, such as belt speed, material being conveyed and belt cleaner position relative to the head pulley. It will handle belt speeds up to 1000 ft/min. (5.1 m/sec.) and the versatile unit accommodates belt rollback. The carbide tip is acid- and abrasion-resistant, and the assembly is well suited for use on belts with mechanical splices, smoothly adapting to and riding over the splices without damaging the splice, belt or blade.
“The maintenance-friendly design of the new pin latch belt cleaner is engineered for a wide range of global applications,” commented Martin Engineering South Africa Sales Manager Pieter Opperman. “It can drastically reduce downtime for service or replacement, since no alignment or setting of the blade is required. Inventory is reduced to a one-part blade and buffer, without bolts, nuts or other fasteners,” he observed.

The Pin Latch Secondary Belt Cleaner is a carbide-tipped design that simplifies maintenance.
Opperman said that blade replacement can be performed with a greatly reduced risk of errors, and the narrow blades conform readily to conveyor belt profiles. “The quick replacement of this design means shorter shutdowns and reduced maintenance time,” he continued. “That translates to more productive and profitable operations, with personnel able to concentrate more on core activities.”
The Martin® Pin Latch Secondary Belt Cleaner delivers excellent cleaning performance with quicker blade recovery, and provides the versatility to adjust blade performance to match a wide range of application characteristics. It is considered a preferred upgrade for Martin® SQC2 and SC16 secondary cleaners.
“Matching the blade performance to the unique conditions of a specific application is a key to maximising efficiency,” Opperman added. “And servicing these units simply requires sliding the pin out and removing the old blades by hand. New blades are slipped onto the mainframe, and the pin is re-inserted through the new blades. That’s all there is to it.”
Edited from press release by Harleigh Hobbs
The Initiative for Responsible Mining Assurance (IRMA) released the second and revised draft Standard for Responsible Mining for a sixty-day review and public comment period ahead of the first-ever global certification programme for industrial-scale mine sites, planned to begin in late 2016.
This second draft of the Standard for Responsible Mining is based on the input from over 1400 points of comment contributed by over 70 organisations and individuals worldwide, including industry and technical experts. Additionally, in October 2015 and March 2016, IRMA conducted two field tests of the Standard for Responsible Mining to ground-truth the draft Standard through simulated mine audits in the US and in Zimbabwe. Auditors hired by IRMA reviewed company documentation, made first-hand observations at the mine site, and conducted interviews with company representatives and other stakeholders to verify the requirements in the Standard are clear, practicable, and measurable.
With growing awareness and demand for ecologically and socially-responsible products, jewellers, electronics businesses and others have sought assurances that the minerals they purchase are mined responsibly. The Standard seeks to emulate for industrial-scale mine sites what has been done with certification programmes in organic agriculture, responsible forestry and sustainable fisheries.
“Microsoft believes that fairly applied global mining standards, such as outlined in the Standard for Responsible Mining, are key to helping solve labour, human rights and environmental issues at the far reaches of industry’s supply chains,” said Joan Krajewski, General Manager, Compliance and Safety, Microsoft. “Collaborative initiatives like these can help improve practices associated with mining of metal ores at their source, which is why we work closely with and support IRMA.”
The draft Standard for Responsible Mining is the result of ten years of collaboration between groups from the mining industry, organised labour, nongovernmental organisations, impacted communities and businesses.
“We believe that using our brand to advocate for critical issues, like responsible mining, is one of the most important things we can do,” said Anisa Kamadoli Costa, Chief Sustainability Officer at Tiffany & Co. “Today, collaboration across sectors is necessary to drive systemic change. As a founding member of IRMA, working across sectors to strengthen mining standards, we are proud IRMA is close to launching its certification. We believe IRMA’s progress represents a significant step toward a global standard in responsible mining.”
“IRMA’s value lies in the commitment by leaders from five different sectors to establish meaningful, verifiable environmental and human rights standards for mining,” said Jennifer Krill, Executive Director at Earthworks, an international mining reform group.
“ArcelorMittal believes that, although challenging and rigorous, the Standard for Responsible Mining is possible to implement over time. It serves as a credible multi-stakeholder tool to allow participating mines to differentiate themselves as leaders in environmental and social responsibility,” said Alan Knight, General Manager, Head of Corporate Responsibility at ArcelorMittal. “We commend the addition of a scoring tool that allows mines at all levels to demonstrate continuing improvement in the areas of environmental and social responsibility.”
The Standard for Responsible Mining’s best practice requirements for mining include elements, such as health and safety for workers, human rights, community engagement, pollution control, mining in conflict-affected areas, rights of indigenous peoples, transparency in revenue payments from companies to governments, and land reclamation once mining is done.
“IndustriALL Global Union represents over 50 million workers in mining and manufacturing in 140 countries. We have worked hard to ensure that the interests of working miners and communities are fully represented in the development of this multi-stakeholder certification and assurance reporting system for the mining industry,” said Glen Mpufane, Mining Director at IndustriALL and a former underground miner and member of the National Union of Mineworkers of South Africa.
Stakeholders and the general public are invited to participate in this next round of feedback and input. After the 5 June comment deadline, the Steering Committee will make another set of revisions to the draft Standard for Responsible Mining and release the final Standard in late 2016.
Edited from press release by Harleigh Hobbs
Australian coal company, Yancoal, has lost control of the Ashton, Austar and Donaldson coal mines in New South Wales as part of a US$950 million debt funding agreement. However, it will remain as the exclusive provider of mine management, marketing and infrastructure at the three operations.
As part of the agreement, ownership of the three mines was transferred to a newly-established Yancoal subsidiary, Watagan Mining Co. Pty Ltd.
Control of Watagan was then assumed by the lenders – which include Industrial Bank Co, BOCI Asia Financial Producst and United NSW Energy (UNE) – with UNE holding the right to nominate a majority of the Watagan’s directors.
Under the agreement, Yancoal can regain control of its subsidiary by repaying the bonds or should Yancoal’s Chinese parent company, Yankuang Group, acquire the bonds.
Edited by Jonathan Rowland.
The giant Carmichael coal project in Queensland has moved a step closer to reality with the approval of the mining leases by the state government. The state Minister for State and Development and Minister for Natural Resources, Dr Anthony Lynham, approved three individual mining leases covering an area about 160 km northwest of Clermont.
“This is a major step forward for this project after extensive government and community scrutiny,” said Queensland Premier Anastascia Palaszczuk.
The Carmichael project includes thermal coal mine, railway and export port facilities at Abbott Point and is being development by Indian industrial conglomerate, Adani. At peak capacity, the mine would produce 60 million tpy of thermal coal.
“Some approvals are still required before construction can start and ultimately committing to the project will be a decision for Adani,” continued Palaszczuk. “However, I know the people of north and central Queensland will welcome this latest project for the potential jobs and economic development it brings closer for their communities.”
The 70441 Carmichael, 70505 Carmichael East and 70506 Carmichael North leases are estimated to contain 11 billion t of thermal coal. The granting of the leases allows mining and development of related infrastructure, such as haul roads, buildings, workshops, power lines and workers’ camp. According to Adani, the integrated mining, rail and port project will generate more than 5000 jobs during construction and more than 4500 during operation.
“My decision to approve these leases is tangible evidence of the Palaszczuk government’s commitment to the sustainable development of the Galilee Basin for the thousands of jobs and economic development it will create,” said Dr Lynham, adding that the project now had 19 permits and approvals at local, state and federal level.
A number of other steps are still to be completed, however, before construction can begin. According to Dr Lynham, these include secondary approvals for rail, port facilities, power, water, roadworks and the airport and a financial assurance agreement with the Queensland Department of Environmental and Heritage Protection.
“The independent coordinator-general will continue to work with Adani to progress the project,” Dr Lynham concluded.
Edited by Jonathan Rowland.
A federal appeals court has vacated an earlier court order stopping operations at part of the Navajo coal mine in New Mexico, US, according to a report from a local newspaper.
Last year, mining in Area IV North at the Navajo mine was halted on the order of a federal judge, who ruled the US Office of Surface Mining, Reclamation and Enforcement (OSMRE) should have considered the environmental impact of burning coal produced at the mine in its approval process.
As the OSMRE had failed to do this, the mine’s approval violated the National Environmental Policy Act.
The mine, which is owned by the Navajo Transitional Energy Co. (NTEC), itself owned by the Navajo Nation, supplies the Four Corners Power Plant. In a press release following the appeal court’s ruling, NTEC welcomed the decision – but said the halt in mining operations had already cost the Navajo Nation US$2 million.
“NTEC is very pleased with this outcome on appeal,” said Clark Mosely, CEO of NTEC, in a press release. “The unfortunate decision of the Colorado District Court last year is no longer on the books and NTEC can now move on with its operations on behalf of the Navajo Nation.”
The Navajo Nation bought the Navajo mine from BHP Billiton last year for US$85 million.
T.L. Headley
According to the latest reports from the US Energy Information Agency (EIA), coal production in the US continues to slide, finishing the week off by 38% from 2015 totals. Meanwhile spot prices for coal continue to hold steady as they have for the past month. Natural gas spot prices, however, continue to slide.
According to the EIA’s 1 April 2016 weekly report, US coal production for the week totalled just 11.60 million short t, down from 18.84 million short t for the same week in 2015. Year to date production totalled just 157.27 million short t, down from 227.45 million short t (down 30.9 %). And for the previous 52 weeks, production was off by 17.4%, down from 819.97 million short t from 992.90 million short t in 2015.
The decline in coal production was reflected in railcar loadings, which were off 37.8 % from for the week to just 66 281. This decline in rail traffic is almost entirely due to the decline in coal production and has resulted in both major eastern rail systems announcing major restructurings. CSX recently announced it is closing its regional headquarters in Huntington, West Virginia. Norfolk Southern likewise announced it is closing the Bluefield, West Virginia offices.Coal exports for the month of January (the most recent data available) were sharply below last year. Metallurgical coal exports are off by 38.5% from January 2015 and thermal coal exports are off by 54%. Imports of coal into the US were down for the month by 46.4%.
Electric output was down 4.6% compared to the same week last year, with 67 690 MWh of electricity produced compared to 70 933 MWh produced for the same period last year.
Domestic steel output was up was up from the previous week.
According to numbers from the American Iron and Steel Institute, in the week ending 26 March 2016, domestic raw steel production was 1.68 million net short t while the capability utilisation rate was 71.6%. Production was 1.60 million net short t in the week ending 26 March 2015 while the capability utilisation then was 67.7%. The current week production represents a 4.6% increase from the same period in the previous year. Production for the week ending 26 March 2016 is up 0.4% from the previous week ending 19 March 2016 when production was 1.69 million net short t and the rate of capability utilisation was 71.3%.
Adjusted year-to-date domestic raw steel production through 26 March 2016 was 21.5 million net short t, at a capability utilisation rate of 70.3%. That is down 3.4% from the 22.3 million net short t during the same period last year, when the capability utilisation rate was 72.1%.In terms of regional coal production, all three major basins report significant decreases from 2015.
The Appalachian Basin finished the week at 2.81 million short t, down from 4.83 million short t in 2014 (-42%). Interior Basin production also finished the week down, at 2.19 million short t compared to 3.51 million short t last year (-38%). Western production finished the week at 6.6 million short t from 10.30 million short t last week (-36%). All three basins remain down significantly for the previous 52 weeks, with the Appalachian Basin off 23.1%, the Interior Basin off 17.3% and the Western Basin off 14.7%.
According to the West Virginia Office of Miners’ Health Safety and Training (WVOMHST), coal production in the state stands at 11.66 million short t through 24 March. Of that total, 9.66 million short t was mined by underground operations and 2.01 million short t was produced by opencast mining. Only 62 mines have reported production in December 2015. Several large operations have idled production due to financial restructuring or in response to slack demand.
However, according to WVOMHST, coal mining employment in West Virginia has fallen sharply to just 11 907 total active miners, with 9782 working underground and 2125 working on opencast operations. The office does not report data for contract miners or preparation plant workers on a weekly basis.According to the EIA, West Virginia coal production for the week totalled 1.23 million short t, off from 2.11 million short t for the same week in 2015 – down 42%.
Production was down in both the northern and southern coalfields of West Virginia compared to the same week in 2015 by 39% and 45% respectively. For the week, northern West Virginia production finished up at 628 000 short t versus 617 000 short t last week and 1.03 million short t last year. Southern West Virginia, however, finished down at 601 000 short t versus 588 000 short t last week and 1.07 million short t a year ago.
Coal production in Kentucky ended the week at 774 000 short t produced, down from the 1.31 million short t from 2015. Eastern Kentucky coal operations finished the year at 344 000 short t, down from 596 000 short t. Meanwhile, western Kentucky coal operations finished at 431 000 short t versus 710 000 short t in 2015.
Wyoming coal production finished the week at 4.92 million short t versus 7.73 million short t in 2015 – off by 36%.
Illinois coal production finished the week at 839 000 short t versus 1.3 million short t for the same week in 2015. Indiana production, however, fell significantly, finishing at 461 000 short t versus 734 000 short t for the month a year ago. Ohio production finished the week at 205 000 short t versus 398 000 short t for the week in 2015. Pennsylvania production was down, finishing the week at 634 000 short t versus 1.1 million short t in 2014. Virginia coal production continues to tall, finishing the year down at 140 000 short t versus 286 000 short t for the year in 2015.
Coal prices on the spot market were unchanged this week. Central Appalachian coal finished the week at US$42.25/short t or US$1.69/million Btu. Northern Appalachian coal also finished unchanged, coming in at US$48.60/short t or US$1.87/million Btu. Illinois Basin coal held steady at US$32.20/short t or US$1.36/million Btu, while Powder River Basin coal remained at US$9.45/short t or US$0.55/million Btu. Uinta Basin coal prices finished unchanged at US$38.05/short t or US$1.63/million Btu.
Natural gas prices on the Henry Hub also held steady this week to finish at US$1.79.million Btu. Natural gas producers reported a significant decline in their stored reserves – at 2.47 trillion ft3, down by 25 billion ft3 compared to the previous week, for a total of 3.48 trillion ft3 in storage. This week’s working natural gas rotary rig count is down by 12 from last week to 464 working rigs. And the count remains down by 584 rigs from a year ago – a decline of 21%. This number includes rigs working in both oil and gas plays.
About the Author
T.L. Headley is a veteran public relations expert and former journalist with more than 20 years in mass communications with a focus on energy. Headley has an MBA in finance and management and an MA in journalism. He is the principal for Genesis Communications and is a public relations consultant for several major coal and energy organizations in West Virginia. Headley is also a 2001 graduate of the West Virginia Chamber of Commerce’s Leadership West Virginia program.
Edited by Harleigh Hobbs.This article first appeared in the WV Coal Seam blog of the West Virginia Coal Association.
Work on the environmental review (EIS) process for the proposed Gateway Pacific Terminal (GPT) dry bulk commodity export terminal on the West Coast of the US has been suspended, according to a press release. The project is currently waiting on a ruling by the US Army Corps of Engineers relating to a request by the Lummi Tribe’s to deny permits to the GPT project.
The Lummi Tribe requested the Corps deny permits to the project based on perceived potential impacts to the tribe’s treaty-protected fishing rights. The request resulted in the Corps conducting a fact-finding process, which has not been completed, with a decision expected shortly.
“There are a number of reasons that have gone into this decision, including the timing of the US Army Corps of Engineers consideration of the Lummi’s request and a desire to ensure all processes in the EIS are in sync,” explained Bob Watters, Senior Vice President at SSA Marine, a one of the companies sponsoring development of the GTP.
“It makes sense to get this ruling out and in the clear. Based on the facts […] we believe the Corp’s should agree that there is less than a de minimis impact on the Lummi Tribe’s fishing rights and that the EIS process should be completed.”
GTP was originally proposed to boost US coal exports to Asia at a time of high coal prices on the back of high demand for coal from Asia. However, the recent downturn in the coal industry has thrown the economics of US thermal coal exports into doubt.
In February, Wood Mackenzie said that the slump in global coal prices and a contraction in Asian demand have made US coal export unable to compete with regional suppliers, such as Australia and Indonesia.
“Three short years ago, the conventional wisdom was both that growing thermal coal demand in Asia couldn’t be met by regional suppliers and that low-cost coal from the US would fill the breech,” said Wood Mackenzie’s Andy Roberts. “The intervening three years have made clear what a miscalculation that was. Opposition to major projects – Gateway Pacific, Millenium and Port Morrow – has been effective […] But as challenging as this was for port developers, the larger problem has been economic.”
Edited by Jonathan Rowland.
Deswik has launched a new survey functionality with its latest software release: Deswik.Suite 2016.1. Integrating seamlessly with Leica instruments, Deswik.CAD now features in-built survey functions commonly used by underground surveyors internationally. Built on the powerful CAD and plotting engine, the new functionality includes: survey job management, in-built stations database, attribute values varying along polylines, as well as advanced features, such as automatic solids creation from tunnel as-builts. These allow for dynamic data updating and rapid plot generation.
In May 2015, Stephen Rowles and Luke Waller from Independence Group NL began work at the new Nova project in Western Australia. They were tasked with setting up best of breed systems for the survey department. As Deswik was already in use by the planners, its survey functionality was reviewed and found to show potential. Working in conjunction with the Deswik development team, their core CAD platform was enhanced to suit the site needs and simplify the typical surveying processes.
“At Nova, we began working with Deswik in July 2015, the purpose was to provide technical assistance to the development team to create a platform for underground surveying” explained Stephen Rowles, Senior Surveyor at the Nova Project. “This would allow data in the mining sequence to flow seamlessly between the departments, while at the same time performing all of the functions that we need as surveyors. Several core software functions have been built into the CAD package, which has improved our processing time and the integrity of the data. The lateral development side of Deswik.CAD is now robust and a proven commodity, we are now focusing our attention to the production side of the package and get it to the same standard already in place.”
“The feedback on site has been very positive from all parties involved and we are looking forward to building on the quality product that is already in place. The opportunity to create a new survey package has been a rewarding endeavour and being the first mine in the world to use this for surveying is quite an experience”.
The survey functions in Deswik.CAD enable data generated by the engineers and surveyors to be used by each other without the need for file conversions. This has allowed seamless integration when transferring data between the mining departments.
The new survey functionality was released with another 141 enhancements to the Deswik software suite and two new underground tools: Deswik.Caving (cave flow modelling) and Deswik.UNO (underground network optimisation).
Edited from press release by Harleigh Hobbs
Mitsubishi Hitachi Power Systems Ltd (MHPS) has concluded an agreement on collaboration in the provision of field services for thermal power generation systems together with two Indonesian power providers – PT Pembangkitan Jawa-Bali (PT PJB) and PT Indonesia Power – and Mitsubishi Corporation (MC).
The aim of the collaborative undertaking is to strengthen field services in Southeast Asia and surrounding regions.Based on the collaborative agreement, MHPS and its partners will perform field services, including dispatch of engineers to thermal power generation system sites, using staff from PT PJB and IP.
On 24 March, a formal signing ceremony took at Indonesia Power’s head office in Jakarta. It was attended by Muljo Adji, Acting for President Director of PJB; Antonius RT Artono, Acting for President Director of IP at Indonesia Power; Naoto Yoshimura, General Manager for Special Task at MC; and MHPS Executive Vice President Ken Kawai.
The new agreement was reached combining the interests of all four parties concerned: MHPS and MC’s desire to further strengthen their field services in this region, and PT PJB and Indonesia Power’s quest for overseas business expansion using their own resources.
Going forward, MHPS has indicated that it aims to maintain and further develop its close relationships with PT PJB and Indonesia Power as a way of making positive contributions to stable and efficient power generation throughout the Southeast Asia region.
Edited from press release by Harleigh Hobbs
Three Swedish companies have launched an initiative to eliminate carbon dioxide (CO2) emissions from the Swedish steel industry. SSAB, a steelmaker, LKAB an iron ore miner, and Vattenfall, a utility, will work together to develop a steel production process that emits water rather than CO2.
“The environment and sustainability have been a part of SSAB’s long-term strategy for many year,” said Martin Lindqvist, President and CEO of SSAB. “Under this initiative, we will take responsibility to solve, long term, the problem of CO2 in the steel industry.”
Current steelmaking technology, which uses coke plants and blast furnaces, means SSAB is currently Sweden’s largest emitter of CO2 emissions.
“Sweden has the chance to take the lead in this matter,” continued Lindquist. “No other country in Europe has the same opportunity thanks to the competence of our three companies and country’s unique natural resources. Our three companies have a clear future vision: together we can create a more sustainable future, where one of the goals is steel without coal.”
Sweden generates over half of its electricity from carbon-free sources, including renewables and nuclear, while its iron ore deposits are of the highest quality in Europe. This combination of factors makes the country “uniquely placed” to undertake this project, according to a press release.
“It is very pleasing to take part in an initiative to secure the future of one of Sweden’s important branches of industry by using CO2-free electricity to replace fossil fuel in steel production,” said Magnus Hall, President and CEO at Vattenfall. “This is the start of a highly interesting, climate-friendly development project that benefits our partners, Vattenfall and not least the climate.”
Edited by Jonathan Rowland.
Anglo American has entered into a Sale and Purchase Agreement with a consortium led by Taurus Fund Management to sell its 70% interest in the Foxleigh metallurgical coal mine in Queensland, Australia.
Foxleigh is an opencast coal operation, which produces high-quality pulverised coal injection (PCI) coal, located in Queensland’s Bowen Basin, 12 km southwest of Middlemount. Anglo American’s attributable share of Foxleigh’s saleable production was 1.86 million t in 2015.
The transaction will be effected via a sale of shares in the subsidiary companies holding Anglo American’s interest in Foxleigh. The transaction remains subject to several conditions precedent and its terms are confidential.
Edited from press release by Harleigh Hobbs
Asia, Central and Eastern Europe and Sub-Saharan Africa will be the key regions for coal-fired power generation and development between 2016 and 2025, according to a new report from BMI Research.
Asia leads the way
According to the report, “Asia will by far register the biggest expansion in coal-fired power generation in the next ten years,” with total output from coal-fired generation growing from 5601 TWh in 2016 to 6749 TWh in 2025. “Given the relatively low cost of coal and widespread availability, countries in the Asia region continue to ramp-up their domestic coal-fired power capacity – with Asia accounting for around 70% of the global coal-fired power generation in 2025.”
Beyond the two key markets of China and India, Vietnam, Pakistan, Indonesia, the Philippines and South Korea all grow their coal capacity over the forecast period. All of these countries currently have a pipeline of coal-fired power plants of more than 9 GW, according to BMI Research’s Key Projects Database – with Vietnam having over 40 GW of planned coal-fired power capacity.
Coal still key in Central and Eastern Europe
Beyond Asia and Central and Eastern Europe will remain a bulwark of coal-fired power in part to strengthen energy security and diversify away from a dependence on Russian hydrocarbons, BMI Research said.
Coal’s low cost and the political importance of coal mining as a source of jobs will also continue to support coal’s role in Central and Eastern Europe with Poland, Kazakhstan, the Czech Republic, Bulgaria, Romania and Ukraine all relying on coal for more than 25% of their power.
Poland in particular will continue its dependence on coal with coal generating about 80% of the country’s electricity and the coal mining industry employing over 100 000 people. “We expect the populist Law and Justice government to maintain strong support for coal-fired power generation,” concluded BMI Research.
Coal says king in SSA on South Africa
In Sub-Saharan Africa (SSA), coal will account for the largest share of the power mix – primarily on the back of South Africa’s continuing dependence on the fuel. According to BMI Research, the country will comprise 94% of total SSA coal-fired generation by 2025.
Developments elsewhere will see coal’s role reduced, however, as countries such as Mozambique, Ghana, Nigeria and Cote d’Ivoire focus on growing their gas-fired capacity using domestic gas reserves.
A fading force
In North America and Western Europe, however, coal’s role will continue to fall. In the US, the glut of cheap gas and growing momentum in the renewables sector will see coal forced off its throne this year when natural gas generation will take the biggest slice of the US energy mix for the first time.
Coal may fight back in 2017 but from 2018 – 2025 natural gas will retake and extend its role as the major contributor of US electricity.
Edited by Jonathan Rowland.
Coal project updates
- Japanese trading house, Mitsui & Co., remains committed to its investment in Vale’s Mozambique coal and logistics projects.
- Centaur Holdings Ltd is moving forward with expanding De Roodepoort in South Africa.
- Kibo Mining has announced that the definitive power feasibility study (DPFS) work has been completed on schedule at the Mbeya coal to power project.
- ASK-listed coal company, Cokal, has sold its PT Anugerah Alam Manuhing tenements in Indonesia.
- A court in Warsaw has confirmed Prairie’s legal right to develop coal in the K-6-7 concession, part of its Lublin Coal Project.
Powering up (and down)
Sales and acquisitions
- CONSOL Energy closes on the sale of the Buchanan mine and other metallurgical coal assets to Coronado for total consideration of US$420 million.
- Walter Energy has completed the sale of its core assets to Warrior Met Coal – a company owned by its first lien creditors.
Layoffs at US mines
A bag of mixed results
- Appalachian coal producer, Corsa Coal, has reported substantially increased earnings from its Northern Appalachian operations, but its Central Appalachian business struggles.
- Rhino Resources lost US$34 million in 4Q15 on revenues of US$39.6 million.
- Corsa Coal has seen “signs of improvement” in the metallurgical coal and steel markets.
Dry bulk transport
- Dry bulk contracting comes to a halt but demolition is on the rise, according to a new report from BIMCO.
- Canadian Pacific asks Northern Southern’s shareholders to vote on a resolution to force the US company’s board into merger discussions.
- Eagle Bulk has agreed a new funding deal with its lenders and shareholders.
Not to be missed …
- The West Virginia Coal Association has called on West Virginia Senator Joe Manchin to reject Marrick Garland’s nomination to the Supreme Court.
- The decision to extend operations at Fiddler’s Ferry coal-fired power plant highlights the real concern about the UK’s security of electricity supply, according to Alan Richards, Head of Risk Management and Research at Utilyx.
Edenville Energy has provided an update on progress on its Rukwa coal-to-power project in southwest Tanzania following the granting of the mining licence for its Rukwa coal deposit on 23 February 2016.
The company has subsequently initiated and significantly advanced a development schedule across the project’s mining and power plant components.
According to Edenville, the grant of its mining licence combined with the Tanzanian Government’s commitment to rapidly develop coal-fired power plants to expand the country’s electricity supply, has allowed project work to increase significantly.
The company will continue discussions with potential funding and technical partners during this work programme, as Edenville aims to add maximum value while retaining control of the project.
Work that is already in progress or set to begin in 2Q16 includes:
- Sourcing and acquisition of suitable plant and machinery for the commencement of site earthworks scheduled for 2Q16. The company is running final comparisons between hire, purchase and contract options to determine the most cost effective solution to commence site preparation works, as per the conditions of the mining licence.
- Excavation and testing of a bulk sample of coal to determine the proportion of coal to be washed and optimise design for both the coal wash plant and power plant furnace and boiler.
- Commissioning of remaining mining bankable feasibility study (BFS) work. This will incorporate both near-term mining plan and large scale power plant supply requirements.
- Expansion of the 2014 Lahmeyer power plant feasibility study to include phased scale up to a 300 MW thermal power plant. The majority of the feasibility work is already contained within Lahmeyer’s 2014 study. The augmented report will be a desktop process to review expansion options for increasing power generation capacity to 300 MW.
- Progress the power plant environmental impact assessment (EIA) work to complete the application process for the power plant EIA certificate.The EIA baseline monitoring study is due for completion in June 2016 and Tansheq, the company’s environmental consultant, is has started preparing documentation needed for the application process.
- Commission an airborne topographic survey to accurately map both the mine and power plant locations to enable detailed design work on both mine site and power plant areas.
Edenville expects to have the majority of the tasks completed during 3Q16 with the exclusion of the power plant EIA, which is a longer lead time item. All consultancy teams are aware of, and working within, strict financial and time parameters.
Since the grant of the mining licence, Edenville has moved forward discussions with numerous potential investors and is considering options for sourcing and structure of project debt and equity. In parallel Edenville continue with site preparation and value-add technical work on the ground.
Edenville has indicated that the project is moving rapidly to clear pre-development milestones and to satisfy the requirements of the Tanzanian authorities, including the Tanzanian Ministry of Energy and Minerals (MEM) and Tanzania Electric Supply Company Ltd (Tanesco), in order to agree a power purchase agreement, setting the tariff and supply terms for the generation, sale and distribution of electricity.
Edited from press release by Harleigh Hobbs
Memo From China
By EDWARD WONG
April 3, 2016
BEIJING — A year and a half ago, negotiators from the United States persuaded the Chinese government to commit to a deadline for reversing the growth in .
The Obama administration portrayed the pledge as a major victory because more of the gases that cause than any other country, a quarter of the world’s total. Though the deadline was far off, in 2030, environmentalists said the concession by Beijing was a significant breakthrough in efforts to coordinate a global response to .
Now, some researchers examining recent energy data and the slowing Chinese economy are asking whether emissions of carbon dioxide, the main greenhouse gas, are already falling in — more than a decade earlier than expected.
If so, there could be important consequences. China’s success could energize worldwide efforts to to 3.6 degrees Fahrenheit, or two degrees Celsius, above preindustrial levels, considered a difficult mission but critical for forestalling catastrophic environmental changes.
It could also put pressure on the United States and other nations to meet their own goals and set more ambitious ones. It would certainly blunt the argument made by those who say Washington should not make ambitious climate commitments because China is the world’s main climate villain.
But determining if China’s carbon emissions have peaked and are declining is difficult. Scientists measure emissions by extrapolating from official energy data and can provide only rough estimates for emissions from individual countries. Conclusions about whether a country’s emissions have peaked are definitive only in hindsight, years after the fact. Even then, economic changes could result years later in a resurgence in emissions.
Problems with the make figuring out what is happening here particularly challenging. A paper by the journal warned that preliminary energy statistics from China were unreliable, and that “the most easily available data is often insufficient for estimating emissions.”
Still, a handful of climate researchers say carbon emissions from China may be falling, after climbing rapidly since 2001, when China joined the World Trade Organization. Two British researchers, Fergus Green and Nicholas Stern, made this case in a published last month by the journal Climate Policy.
“It is quite possible that emissions will fall modestly from now on, implying that 2014 was the peak,” they wrote.
Central to their argument are the possibility that China is undergoing an economic transformation and reports that over the last two years. Industrial coal burning, by power plants and cement factories, for example, is the main source of carbon dioxide emissions in China.
The decline in coal use is largely the result of China’s economic slowdown. China’s president, , has said slower growth is the “new normal,” and has been trying to shift the economy away from growth focused on heavy industry and toward growth fueled by consumer demand and the service sector, which is less carbon intensive.
China has also adopted policies to limit coal use around eastern population centers to battle air pollution, and has promoted alternative energy, including hydropower and .
Together, these policies may be paying off faster than expected. , a senior climate and energy adviser at the Washington-based Natural Resources Defense Council, said carbon emissions from China may have peaked in 2014 at between 9.3 billion and 9.5 billion metric tons. (In the United States, emissions hit 6.1 billion metric tons in 2007 before falling, researchers for a Norwegian group said.)
A set of data revisions scheduled to be released this fall could show that emissions from China dropped by 1 to 1.5 percent last year, Mr. Yang said.
But there is also a strong case for less optimism.
Putting policy into effect has long been a problem in China, so it is unclear whether officials will follow through on Beijing’s orders to move away from coal-burning industries. At the same time, China’s leaders may balk at the painful steps needed to overhaul the economy. Restructuring efforts have already resulted in .
Another question is energy use. Electricity demand in China is expected to continue growing, and the easiest way to meet it will be through coal-burning power plants rather than alternative energy sources.
China’s coal-burning plants are operating below 50 percent capacity, and a found that local officials issued permits for the construction of 210 more plants last year. Some of these projects could be suspended under from Beijing, but activists are worried that China’s electrical grid will continue to favor coal-based enterprises.
Oil and natural gas use is also rising in China — from people driving cars, for example — and the growth of carbon emissions from that could exceed the drop in emissions from coal use.
“I think the total of China’s carbon dioxide emissions will rise again in coming years,” said Jiang Kejun, a senior researcher at the Energy Research Institute of China’s main economic planning agency.
Other skeptics note that Chinese cities are still growing. More than 55 percent of the population lives in cities now, but the government has set a goal of 60 percent by 2020. Urbanization means more construction and reliance on heavy industry, not to mention increased traffic.
“Most Chinese cities are building out,” and more data on the impact is needed to figure out if carbon emissions have started falling for good, said , an assistant professor at the Yale School of Forestry and Environmental Studies.
Chai Qimin, a senior director at China’s National Center for Climate Change Strategy and International Cooperation, said the experience of other nations suggested that emissions would continue to rise because China’s economy was still developing.
Most countries see carbon emissions fall when per capita gross domestic product climbs to between $20,000 to $40,000, but China’s is still below $10,000, he said. “China has more industrialization and urbanization to do, which needs energy,” he said.
Some researchers say China could be in a period in which emissions fluctuate for several years before a sustained decline, as they did in the United States before 2007.
“I would be more confident to say that China has reached a plateau or period of low growth,” said Glen Peters, a scientist at the Center for International Climate and Environmental Research-Oslo. “I think to say ‘peak’ is a little bold.”
Whether or not emissions from China are already falling, most researchers agree they will reach a peak no later than 2025, five years ahead of Beijing’s pledge.
China also appears to be overshooting , or the amount of carbon dioxide emitted per unit of economic output. China of bringing carbon intensity down 40 percent to 45 percent below 2005 levels by 2020, mostly by shifting the economy away from heavy industry and fossil fuels.
But officials and researchers now say that a 50 percent cut by 2020 is possible, and that the government may revise its target to make it more ambitious.
“If China can revise this, then I’d be very happy,” Mr. Yang of the Natural Resources Defense Council said. “China would be playing a leadership role in climate change.”
Mia Li contributed research.
Australian gas company, Santos, has announced a new executive team (excom) reporting to the company’s CEO, Kevin Gallagher.
The new executive team will comprise Bill Ovendum as Vice President Exploration, Brett Woods as Vice President Development, Vince Sanastefano as Chief Operations Office, John Anders as Executive Vice President Commercial and Business Development and Angus Jaffray as Executive Vice President Strategy and Corporate Services.
“The appointment of the excom is a key step in establishing a new operating model for Santos that is focused on both lifting productivity and driving long-term value for shareholders in a low oil price environment,” said Gallagher.
“The new model involves a move away from geographic based business units to an asset focused model with strong technical capabilities in our primary business of exploration, development and production of oil and natural gas both onshore and offshore.”
The excom will be based in Adelaide with the transition taking place over the next few months.
Santos is one of the leading coalbed methane (CBM: called coal seam gas in Australia) producers in Australia with assets in Queensland’s Bowen and Surat Basins supplying the GLNG plant, one of three new LNG CBM-to-LNG plants exporting to Asian markets.
Edited by Jonathan Rowland.
Pittsburgh-based producer of natural gas and coal, CONSOL Energy Inc. has closed on its previously announced agreement to sell the Buchanan mine in southwestern Virginia, the US, and certain other metallurgical coal reserves to Coronado IV LLC for total consideration to CONSOL of US$420 million in value, including US$402.8 million cash paid at the closing.
CONSOL previously announced that it was entering into an agreement on 29 February 2016, where it intended to sell the Buchanan mine and certain other coal reserves for US$420 million.
Previously announced, the transaction would include CONSOL Energy’s idled Amonate mine in southern West Virginia and southwestern Virginia, its greenfield Russell County coal reserves in southwestern Virginia and its greenfield Pangburn-Shaner-Fallowfield coal reserves in southwestern Pennsylvania. It also includes approximately 400 million short t of proved coal reserves, which includes approximately 88 million short t associated with the Buchanan mine.
The transaction does not include any gas rights, and CONSOL will retain the right to extract and sell gas at the mines and other properties.
The agreement contains customary representations, warranties and covenants, among other provisions, including a customary escrow provision.
CONSOL previously indicated that it expects to use transaction proceeds in order to pay down debt. The transaction is expected to close in 1Q16.
Edited from press release by Harleigh Hobbs