Clean Coal Technologies Inc., an emerging cleaner-energy company using patented technology to convert raw coal into a cleaner burning and more efficient fuel, has announced that the latest tests analysed by the Independent Standard laboratory have been very successful.
“Our latest test results, carried out on 2 February 2016, reduced the moisture content of the feed coal from 26.93% to ~4.71% in the stabilised coal. Alongside the previous testing results, we can confidently say that the moisture level of the stabilised coal can be reduced to levels desired by the end customer. Simply put, we have completely validated the dehydration process section of the Pristine M Technology,” explained President and CEO, Robin Eves.
“The corresponding increase in heating value of the coal was almost 2000 Btu/lb., from 8767 Btu/lb. in the feed coal to 10 744 Btu/lb. in the stabilised coal. The results also showed no degradation of the coal during the process. These are phenomenal results this early in the commissioning process,” added Eves. “We have validated our ability to address the volatiles whilst increasing the BTU value of the final product. This also validates the Pristine Technology and shows, beyond doubt, that we can produce a cleaner, more energy efficient fuel from the lower ranked coals.”
“Whereas these results exceeded our expectations we will continue to run further tests and gather additional data over the coming weeks. These results will act as a benchmark for our continued testing,” commented Aiden Neary, COO. “We have already identified process improvements that, when implemented, will lead to further optimisation of the end coal. These results serve as evidence of just how powerful this technology is and provides us the ability to move to commercialisation on an expedited basis as we work to provide a commercial and economically viable solution to the global Coal and Power Industry.”
Eves concluded: “CCTI and their patent and patent pending technologies have taken an enormous step towards commercialising their technology and the global negotiations will now be validated by the exceptional performance of their technology at the AES coal-fired Utility at Shady Point with the confident knowledge that results can only improve from here. These are very exciting times for our company, our investors and shareholders.”
Edited from press release by Harleigh Hobbs
Nathan Tinkler, former mining billionaire, has resigned as Managing Director and CEO of Australaian Pacific Coal, following a Federal Court of Australia judgment by Gleeson J in the matter of GE Commercial Australasia Pty Ltd v Tinkler [2016] FCA 55.
The Federal Court judgement is a personal matter for Tinkler and removes his ability to perform his current role for Australian Pacific Coal. The judgment is unrelated to the services that he has carried out for the company since his appointment in October 2015.
The Board of Australian Pacific Coal has indicated Tinkler’s contribution to the company’s recent performance has been significant and it will do everything possible to ensure that this positive momentum continues. Tinkler will continue providing services in a technical advisory capacity to the company.
Edited from press release by Harleigh Hobbs
Duke Energy has issued a statement regarding a civil penalty issued by the North Carolina Department of Environmental Quality (NCDEQ) related to the Dan River coal ash spill that occurred in February 2014.
The company will review the action taken by NCDEQ today as it continues to work as quickly as the state process will allow to safely close coal ash basins.
Duke Energy indicated that the state’s own research demonstrates that the Dan River is thriving. Drinking water always remained safe and water quality returned to normal within days of the February 2014 incident. The company took responsibility and quickly stopped the discharge and permanently plugged the 48 and 36 in. stormwater pipes at the site.
The company has reported strong progress in closing basins at the Dan River facility and across the state in ways that protect people and the environment, comply with state and federal coal ash laws, minimise impact to communities, and manage cost.
The Health of the Dan River
- Multiple federal and state agencies have been closely studying the Dan River.
- No physical impacts to fish or aquatic life have been observed to date.
- The EPA stated it does not believe human health was affected by the ash release.
- Within weeks of the incident, researchers from North Carolina State University determined the river was safe for irrigation and livestock use.
- Duke Energy and regulators from North Carolina and Virginia continue monitoring the river to identify any potential long-term effects.
Great progress in closing basins
The following is what Duke Energy has progressed with in the last few months:
- Continued to excavate ash from the Asheville plant (Asheville, N.C.) and began excavating at Cliffside steam station (Mooresboro, N.C.), Dan River steam station (Eden, N.C.), Riverbend steam station (Mount Holly, N.C.), Sutton plant (Wilmington, N.C) and W.S. Lee steam station (Belton, S.C.) to fully lined, permanent solutions.
- Submitted comprehensive groundwater assessments to NCDEQ for each of the 14 coal plants in the state.
- Announced plans to build fully lined onsite landfills at the Dan River steam station (Eden, N.C.), Robinson plant (Hartsville, S.C.), Sutton plant (Wilmington, N.C.) and W.S. Lee steam station (Belton, S.C.).
- Announced that the Electric Power Research Institute (EPRI) is conducting a comprehensive study of the coal ash recycling market and available technologies.
- Announced plans to retire the coal-fired Asheville plant (Asheville, N.C.) in four to five years and modernise Duke Energy’s generation and transmission system in Western North Carolina and Upstate South Carolina – significantly reducing environmental impacts, improving system reliability and minimising long-term costs to customers.
The executive management team of Leigh Creek Energy (LCK) has been restructured in order to better meet the needs of the Company over the next twelve months.
As a result of the company recently obtaining its independently assessed coal resource and gas resource certifications, the level of interest in its gas and the workload with regards to gas marketing and negotiating sales contracts has increased dramatically.In addition, the early stage work associated with the full field commercial gas development is also accelerating.
Associated with this effort is the optimisation of future capital needs, by way of gas monetisation and project debt against future infrastructure assets. This has led to the reality that the workload of LCK’s Managing Director, Mr Shearwood, has risen to the point that he is regularly on the road in the Eastern Australian States and Overseas as the company ensures that it devotes the appropriate level of attention to gas marketing, Investor Relations and debt sourcing.
As a result of this increase in workload, and the need for more operational support, the Board has appointed Phillip Staveley, current CFO, to the role of CEO.
In addition to his new role as CEO, Staveley will continue to fulfill the CFO role.
Staveley’s long-term experience in resources, including 15 years in CEO and CFO roles will meet the needs of the company during this important phase of development.
Edited from press release by Harleigh Hobbs
WASHINGTON — In a major setback for ’s agenda, the on Tuesday temporarily blocked the administration’s effort to combat global warming by regulating emissions from coal-fired power plants.
The brief order was not the last word on the case, which is most likely to return to the after an appeals court considers an expedited challenge and dozens of corporations and industry groups.
But the Supreme Court’s willingness to issue a stay while the case proceeds was an early hint that the program could face a skeptical reception from the justices.
The 5-to-4 vote, with the court’s four liberal members dissenting, was unprecedented — the Supreme Court had never before granted a request to halt a regulation before review by a federal appeals court.
“It’s a stunning development,” Jody Freeman, a Harvard law professor and former environmental legal counsel to the Obama administration, said in an email. She added that “the order certainly indicates a high degree of initial judicial skepticism from five justices on the court,” and that the ruling would raise serious questions from nations that signed on to the landmark Paris climate change pact in December.
In negotiating that deal, which requires every country to enact policies to lower emissions, Mr. Obama pointed to the power plant rule as evidence that the United States would take ambitious action, and that other countries should follow.
The White House said in a statement that it disagreed with the court’s decision and remained confident that it would ultimately prevail. “The administration will continue to take aggressive steps to make forward progress to reduce carbon emissions,” it said.
Opponents of Mr. Obama’s climate policy called the court’s action historic.
“We are thrilled that the Supreme Court realized the rule’s immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues,” said Patrick Morrisey, the attorney general of West Virginia, which has led the 29-state legal challenge.
“There’s a lot of people who are celebrating,” said Jeff Holmstead, a lawyer with Bracewell & Giuliani, a firm representing energy companies, which are party to the lawsuit. “It sends a pretty strong signal that ultimately it’s pretty likely to be invalidated.”
The challenged regulation, which was , requires states to make major cuts to greenhouse gas pollution created by electric power plants, the nation’s largest source of such emissions. The plan could transform the nation’s electricity system, cutting emissions from existing power plants by a third by 2030, from a 2005 baseline, by closing hundreds of heavily polluting coal-fired plants and increasing production of wind and .
“Climate change is the most significant environmental challenge of our day, and it is already affecting national public health, welfare and the environment,” Solicitor General Donald B. Verrilli Jr. wrote in a brief urging the Supreme Court to reject a request for a stay while the case moves forward.
The regulation calls for states to submit compliance plans by September, though they may seek a two-year extension. The first deadline for power plants to reduce their emissions is in 2022, with full compliance not required until 2030.
The states challenging the regulation, led mostly by Republicans and many with economies that rely on coal mining or coal-fired power, sued to stop what they called “the most far-reaching and burdensome rule the E.P.A. has ever forced onto the states.”
A three-judge panel of the United States Court of Appeals for the District of Columbia Circuit in January unanimously refused to grant a stay.
The court did expedite the case and will hear arguments on June 2, which is fast by the standards of complex litigation.
The states urged the Supreme Court to take immediate action to block what they called a “power grab” under which “the federal environmental regulator seeks to reorganize the energy grids in nearly every state in the nation.” Though the first emission reduction obligations do not take effect until 2022, the states said they had already started to spend money and shift resources.
, mostly led by Democrats, opposed the request for a stay, saying they were “continuing to experience climate-change harms firsthand — including increased flooding, more severe storms, wildfires and droughts.” Those harms are “lasting and irreversible,” they said, and “any stay that results in further delay in emissions reductions would compound the harms.”
In a second filing seeking a stay, coal companies and trade associations represented by Laurence H. Tribe, a law professor at Harvard, said the court should act to stop a “targeted attack on the coal industry” that will “artificially eliminate buyers of coal, forcing the coal industry to curtail production, idle operations, lay off workers and close mines.”
The E.P.A., represented by Mr. Verrilli, called the requests for a stay “extraordinary and unprecedented.” The states challenging the administration’s plan, he said, could point to no case in which the Supreme Court had “granted a stay of a generally applicable regulation pending initial judicial review in the court of appeals.” In a later brief, the states conceded that point.
Mr. Verrilli said judicial review of the plan, including by the Supreme Court, will be complete before the first deadline for emissions reductions in 2022.
“There is no reason to suppose that states’ duties under the rule will be especially onerous,” Mr. Verrilli wrote. “A state can elect not to prepare a plan at all, but instead may allow E.P.A. to develop and implement a federal plan for sources in that state.”
The two sides differed about whether current declines in coal mining and coal-fired power generation are attributable to the administration’s plan. “Some of the nation’s largest coal companies have declared bankruptcy, due in no small part to the rule,” a group of utilities told the justices.
A coalition of environmental groups and companies that produce and rely on wind and said other factors were to blame for coal’s decline.
“These changes include the abundant supply of relatively inexpensive natural gas, the increasing cost-competitiveness of electricity from renewable generation sources such as solar and wind power, the deployment of low-cost energy efficiency and other demand-side measures, and increasing consumer demand for advanced energy,” they wrote.
In a company statement, Heath Lovell, Vice President – Operations of Alliance Coal, LLC, has indicated the company’s subsidiaries, River View Coal LLC and White County Coal LLC, are making slight reductions in operational units.
This will lead to reductions-in-force that will impact approximately 75 employees.
Lovell has said this is a necessary action due to extended weak market conditions. He indicated the company deeply regrets the impact of these decisions on employees, their families and their communities.
As previously announced, Hopkins County Coal, LLC’s Elk Creek mine remains slated to cease production in 1Q16. The future level of operation of Warrior Coal, LLC’s Cardinal mine is uncertain at this time and will depend upon market conditions.
Additionally, Alliance Coal’s subsidiary, Hamilton County Coal LLC, will also temporary layoff of approximately 200 employees. The temporary layoff became necessary as a result of weak power demand, persistently low natural gas prices, an oversupplied coal market, and overreaching regulations. The temporary layoff is projected to be lifted in the 3Q16.
Edited from press release by Harleigh Hobbs
GMB has commented on the announcement that Rugeley Power Station is expected to close this summer.
Phil Whitehurst, GMB National Officer for Engineering Construction, stated: “Last month the Institution of Mechanical Engineers warned that the UK faces an electricity supply gap of up to 55% by 2025 because of the closure of coal and nuclear plants. It would now appear that coal, the cheapest form of energy generation in the UK, is being squeezed out of the market prematurely by either the suppliers wanting more profit or by Government insistence on these stations closing.”
“The Government and the suppliers should now stop this nonsense. They should think hard at the consequences of yet another generation hub like Rugeley closing three of its four units at a time when there is little or no building of any sustainable replacement capacity such as gas fired CCGTs. New nuclear has stalled and is at least 10 years away. Wind power could not sustain the needs for London let alone the UK and is reliant on the weather.”
“Lessons need to be learned from 4 November 2015 when National Grid had to invoke special measures to keep the lights on. This happened on what was not a very cold day and before nine power stations close in 2016. Government should call in National Grid to examine what is going to happen and it should not allow the closure of this power station until new capacity is on stream to keep the lights on,” added Whitehurst.
Edited from press release by Angharad Lock
Tanzania focused mineral exploration and development company, Kibo Mining plc, has announced that Phase 1 of the Mbeya coal-to-power project (MCPP), integrated bankable feasibility study (IBFS), has been successfully completed.
Kibo has completed fundamental meetings with all key Government stakeholders.
The company has reported successful integration of three primary MCPP feasibility study work streams.
Kibo has also formally appointed Shangoni Management Services LTD as environmental consultant.
Louis Coetzee, CEO of Kibo Mining, commented: “The completion of the first phase of the IBFS is a critical step in the overall feasibility work, which is now progressing at pace. The four key work streams, (MDFS, PDFS, EIA and IBFS) are all active and progressing in parallel. This is in itself the strongest indicator of the considerable momentum with which the feasibility work on the MCPP is advancing – and fast nearing completion.
Coetzee continued: “We took great care during the preceding stages of the MCPP feasibility work to ensure that solid foundations are put in place on which the MCPP can be developed. These would be particularly important during the final stages of the feasibility work, when the project is invariably subjected to stringent external stress tests. During the past week, the MCPP underwent its first significant external stress test and withstood this with ease. This bodes well for the intricate commercial and funding related negotiations in the coming weeks and months.”
Edited from press release by Harleigh Hobbs
BIMCO, the world’s largest international shipping association, has released a new report on the dry bulk market. According to the report, the market faced a lot of headwind in 2015 as dwindling demand and over-supply created very unfavourable market conditions. 2016 has shown no improvements so far and prospects for the rest of the year are not looking promising. With poor earnings across the board the average scrapping age has dropped among all the dry bulk segments.
The capesize segment especially has seen a big drop in the average scrapping age; dropping almost four years from an average age close to 25 in 2014 to less than 21 in 2015. This is the result of a record amount of capesize tonnage that was scrapped in 2015.
Chief Shipping Analyst, Peter Sand, stated: “Despite a relatively low demand for scrap steel in 2015, the demolition of dry bulk ships was high compared to previous years, and the capesize segment was the leader of the pack.”
A total of 15.5 million DWT of capesize tonnage was sent for demolition in 2015 – more than half of the total 30 million DWT of dry bulk tonnage scrapped.
Sand continued: “The extensive demolition activity within the dry bulk shipping industry is expected to continue to climb through 2016. So far, the year has already started well with 4.6 million DWT scrapped in January alone. This increasing demolition is a very welcome development, but a lot more ships need to be scrapped in order to improve on the unfavourable market conditions present in the dry bulk market.”
The average demolition age follows the state of the market or at least the sentiment in the market. 2013 was one of the most volatile years for dry bulk shipping. After a very weak first half, things got better towards the end of the year. The improvement was partly due to some intensive stockpiling ahead of the Indonesian ban on exporting unprocessed mineral ores, posed to go into effect from the beginning of 2014. As the ships were kept busy towards the end of the year scrapping remained low and the average demolition age climbed slightly.
In 2014, the tumbling demand from import giant, China, hit the market hard. With an increase in hydropower generation, Chinese imports of thermal coal, including anthracite, became the biggest disappointment, despite lower prices. Dropping from 192 million t in 2013 to only 165 million t in 2014. This development continued into 2015 where imports reached another low of only 108 million t.
Iron ore prices also dropped, however contrary to thermal coal, buyers took advantage of the low price, and volumes rose. Unfortunately, short-haul trading out of Australia covered almost all of the new demand. With demand growth mainly skewed towards iron ore, a trade mostly covered by the capesize segment, meant that only few capesize ships were scrapped. Only 4.2 million DWT worth of capesize was scrapped in 2014, much lower than the 7.9 million DWT scrapped in 2013 and far below the 12 million scrapped in 2012. This resulted in a significant increase in scrapping age for the capesize segment in 2014.
Sand added: “China’s appetite for raw materials has been a major driver for the dry bulk market and with the current slowdown and different direction of its economic development, the appetite for major dry bulk commodities has stalled. The decreasing age of dry bulk ships being scrapped, is a mirror image of the tough challenges currently facing owners and operators in the dry bulk market.
Although a stronger permanent growth on the demand side would provide the biggest relief, this seems unlikely in the near future. Alternatively increased scrapping could be a way to improve the fundamental imbalance between supply and demand in the dry bulk shipping market.”
Edited from press release by Harleigh Hobbs
SKF launched a new app for its proven SKF Drive-up Method for mounting bearings. Developed for ease of use in the field, the app is available in both iOS and Android formats and can be used on smartphones and tablets. Complementing SKF’s recognised SKF Drive-up Method PC software, the app is available for download from the Apple app store and from Google Play.
The app enables the user to achieve accurate adjustment of spherical roller and CARB toroidal roller bearings mounted on tapered seatings. The correct fit is attained by controlling the axial drive-up of the bearing from a predetermined starting position. The method incorporates the use of an SKF hydraulic nut fitted with a dial indicator, as well as a highly accurate digital pressure gauge mounted on the selected pump.
When using the app, the user selects the bearing designation and seating arrangement, and the values required for optimal mounting are displayed. In addition, the app provides step-by-step working instructions. Both the required values and instructions can be saved in a PDF format.

Edited from press release by Angharad Lock
A study has been conducted by industry intelligence experts Wood Mackenzie and found a third of the state’s coal mines are operating at a loss.
The report was commissioned by the Queensland Resources Council as a part of the QRC’s State of the Sector report, which is a quarterly economic snapshot of the sector.
QRC Chief Executive Michael Roche said the data confirms what industry leaders have been telling him over the past few months.
“While the cost curves and profitability analyses provide hard data on the state of our sector, the opinions of the industry leaders in Queensland – many of them veterans of thirty or more years – tell the story more starkly,” Roche stated.
“Despite production reaching its highest levels, we have lost 21 000 resource sector jobs in the past two years as a result of low commodity prices.
Roche emphasised governments (federal, state and local) need to be doing more to help the sector, ensuring that policy and regulation supports existing operations. Last year, this was responsible for contributing AUS$64.8 billion to Queensland’s economy, while providing one in every six jobs, according to the Chief Executive.
“Just because our sector is experiencing a downturn, it is not time to sit on our hands as we must have a plan in place to preserve the maximum number of current resources jobs and be ready to take advantage of the upturn … We need to ensure that regulation doesn’t strangle potential projects that will help create jobs and increase revenue that will fill the void from the commodities slump,” continued Roche.
The QRC will be meeting with the Queensland government’s cabinet jobs committee to discuss a plan that will help to protect the current 60 000 resource sector jobs and the tens of thousands of jobs across the 24 000 businesses that support the industry.
Roche believes the mining industry has been doing “all the heavy lifting to try to survive this worst resources downturn in many decades” and it is now time for governments to “play their part” in helping the industry.
“We are not looking for bailouts or subsidies but our entire sector needs certainty and support in the shape of commitments to reduce red tape and unjustified government-imposed and government-sanctioned costs,” Roche concluded. “At the top of our list are royalties, local government rates and the charges from government and private sector providers of rail, port, power and water services.”
Edited from press release by Harleigh Hobbs
Adani’s giant Carmichael coal mine has received environmental approval from Queensland’s Department of Environment and Heritage Protection (EHP), the latest regulatory win for the controversial project.
“The Department of Environment and Heritage Protection issues a final environmental authority (EA) for Adani’s Carmichael mine project on 2 February 2016 with approximately 140 conditions” the EHP said in a statement. The conditions include nine relating to the black throated finch, as had been required by a previous Land Court ruling.
“EHP is confident the strict conditions plants on the EA, including extra requirements based on the Land Court’s recommendations will ensure this mine will not pose an unacceptable rick to the environment and any potential impacts will be closely monitored,” the EHL concluded.
The Carmichael mine will be Australia’s largest coal mine in Queensland’s Galilee Basin, as well as infrastructure links to a new export terminal at Abbott Point. The project cost is estimated to be around AUS$16 billion.
Adani recently confirmed its commitments to the project after media reports the Indian conglomerate had put the project on hold until coal prices increase.
Speaking to ABC, Adani Australia CEO, Jeyakumar Janakaraj said that “Adani is absolutely committed to proceeding with its investments in Queensland in line with its integrated pit-to-plug strategy.”
Edited by Jonathan Rowland.
China’s largest coal company, Shenhua, has announced a series of writedowns to loss-making coal mining, processing, transportation and power assets after suffering “sustained losses” at certain of its operations on the back of lower coal prices.
The company will writedown assets by RMB4.809 billion (US$731 million). Twelve of the company’s coal-fired power plants will record impairment charges, including the Guohua Beijing thermal power plant, which was closed in March 2015 following a decision by the Beijing Municipal Commission of Development and Reform.
Other impairment charges relate to: the Wanli No.1 mine of Shenhua Baotou Energy Co., and associated Shuiquan coal processing plant; the Shenhua Bayannur Energy Co, which owns a coal processing plant, coking plant and methanol plant; Hulunbeier Shenhua Clean Coal Co., which owns a trial project to upgrade low-rank coal; and the Tahan railway.
Separately, Shenhua also noted the decision by the National Development and Reform Commission to reduce on-grid tariffs for coal-fired power plants that are not fitted with what the commission calls “ultra-low emission” technology. Plants that are fitted with this technology will receive tariff support in a bid to promote the use of cleaner coal technologies in the Chinese power sector.
According to Shenhua, this decision will lower the tariffs on power output from its coal-fired power plants by about 8% – further hitting the company’s 2016 operating revenue. Shenhua also warned that “with the intensive reform of the mechanisms for the power industry, there may be relatively considerable differences in the structure of actual power sales volumes of the company in 2016 compared to that of 2015.”
Shenhua operate 13 700 MW that conform to the requirements on ultra-low emission limits with an additional 6610 MW currently underground approval testing. It is also planning to further roll out ultra-low emission technology in its existing fleet, as well as on new-build plants, through 2016.
Edited from various sources by Jonathan Rowland
Ncondezi Energy has announced an extension to the deadline by which it must satisfy the investment conditions outlined within the joint development agreement (JDA) with Shanghai Electric Power (SEP).
The JDA covers the development of the 300 MW Ncondezi coal-fired power plant in Mozambique’s Tete Province and will see SEP invest up to US$25.5 million in a new holding company for the project, Ncondezi Power Co.
“Both SEP and [Ncondezi Energy] continue to focus on satisfying the SEP investment conditions as quickly as possible to make the JDA effective and are targeting completion within the extension period,” Ncondezi said in a statement.
The investment conditions include approval by state-owned utility EDM to change the plant design from circulating fluidized bed to pulverized coal, completion of an independent audit of historical project costs, finalisation of the work programme and budget, as well as the relevant transaction documents, and approval from the necessary Chinese regulator and SEP’s parent company.
The Ncondezi project comprises integrated coal mine and plant with development planned in phases of 300 MW to 1800 MW. The first phase targets domestic consumption in Mozambique.
Shanghai Electric Power is one of the largest generation groups in China with an installed capacity of over 100 000 MW. SEP has experience of owning, constructing and operating coal-fired power plants and has a stated aim of international growth.
Edited by Jonathan Rowland.
Glenn Kellow, Peabody Energy.
With global leaders agreeing to reduce greenhouse gas emissions, a much greater discussion is needed about energy solutions to deliver reliable, affordable and low-carbon electricity. In the weeks following the Paris summit, all of us must recognise that why we need energy is as important as how we supply it.
Access to affordable energy is crucial for improved family budgets and stronger GDP, and a balanced energy portfolio is vital given growing electricity needs. Today the world uses twice as much electricity than it used 25 yrs ago.
Our need for power becomes even more pronounced when one considers the billions of people in emerging economies that still have no access or inadequate access to modern energy. For these families, there is no enduring light, no refrigerators to keep food fresh and no clean, safe way to warm their homes.
As energy leaders, our charge is to expand energy access for families living without power, maintain a reliable supply to satisfy existing needs and plan for long-term growth, which points to coal’s important role in the broad mix of fuels given its scale, availability and low cost. Advanced coal technologies are a ready-today solution to satisfy these needs and accelerate the transition to low-carbon energy systems. I believe that there are three core steps toward this goal; and I’d like to elaborate on each one:
First, turn coal into electricity, which can lift hundreds of millions from energy poverty and the health tragedies of indoor air pollution from cooking and heating with open fires. Step one in reducing key emissions and improving health, and longevity, for millions should be extending the elevating hand of electricity to those who lack it.
Step two is using today’s high-efficiency, low-emissions (HELE) coal-fuelled generation technologies to drive down carbon dioxide (CO2) levels. There is a large build out of these plants underway globally with more than 700 GW of advanced coal generation online or under construction. China leads the way with about 55% of the world’s fleet.
These technologies have a smaller environmental footprint, achieving as much as a 25% reduction in a plant’s CO2 emission rate. Said another way, moving the current average global efficiency rate of coal-fuelled power to HELE levels could deliver the equivalent environmental benefit of reducing India’s annual CO2 emissions to zero.
Notably, when HELE plants are equipped with advanced emission controls, they achieve key emission rates in the US that are 75% below the existing fleet. We’re seeing enormous environmental improvement with this technology right now.
My final point is the need to advance policies and investments to commercialise carbon capture and storage (CCS) technologies, which offer the best large-scale solution to capture CO2 emitted from energy, as well as industrial processes.
I was pleased to chair a National Coal Council study this past year on CCS, which was conducted at the request of the US Secretary of Energy through the Council’s advisory capacity on coal policy and technology. The study calls for levelling the playing field for CCS to achieve policy parity with other low-carbon options, such as solar and wind. Ultimately this would lead to near-zero emissions from coal, which is recognised by global leaders as essential to our carbon goals. The International Energy Agency has said that CCS must contribute one-sixth of total emission reductions by 2050.
That is a significant challenge, given there are currently only 14 large-scale CCS projects in operation globally, including one in the power sector, with another eight under construction, which will bring online two more in the power sector. Since 2007, CCS investment has been around US$13 billion compared to roughly US$1.8 trillion for renewable power generation technologies over the same timeframe, according to the Global Carbon Capture and Storage Institute. Much greater investment and deployment of large-scale CCS projects are needed.
As we look ahead, we must put in place a technology path for long-term improvement in carbon emissions that will enable the world to use more energy, while keeping electricity available and affordable.
Advanced HELE technologies and ultimately CCS are the right approach and a major part of a low-carbon energy future.
About the author
Glenn Kellow is President and CEO of Peabody Energy, the world’s largest private-sector coal company and a global leader in sustainable mining, energy access and clean coal solutions.
Edited by Harleigh Hobbs
Professor Ed Lester and Thomas Huddle, University of Nottingham, Patrick Daley, the EPSRC Centre for Doctoral Training in Carbon Capture and Storage and Cleaner Fossil Energy, and Paul Haigh, Carbolite Gero Ltd, UK, detail advances in ash fusion analysis.
Since the early 1900s, the ash fusibility test (AFT) has been used to predict deposition behaviour of coal ash in large coal-fired boilers. The modest beginnings of the test required an operator to watch a pelletised ash sample through a viewing port and identify four temperatures, which correspond to four characteristic points or characteristic temperatures (CTs) (Figure 1) in the melting process of the ash pellet. A comprehensive study in the late 1990s reviewed the consistency and reproducibility of the test. The job of the operator was viewed as being too subjective with huge discrepancies observed between tests carried out by different operators – and even when the same operator performed the same test twice. Variations as much as 30 – 50°C were seen with the same operator and the same sample and up to 400°C difference between laboratories for the initial deformation temperature (IDT). This variation was, in part, caused by the way that the compressed pellets were made for which only basic instructions were specified.

Figure 1. Characteristic shapes of a test piece.
In addition to repeatability and reproducibility issues, the perceived relevance of the four CTs in predicting the onset of slagging and fouling varies widely across the industry. Some only use the initial deformation temperature as the onset of ash stickiness, which can be a trigger for potential slagging issues, while others only refer to the flow temperature as it relates to the temperature where the ash is sufficiently melted to flow down the furnace.
Furthermore, recent efforts towards reduced CO2 emissions have led to a surge in the use of biomass as a replacement for coal in some power plants. This brings a new set of challenges with changes in initial mineral content and combustion performance, including up to three times the volatile content and elevated levels of potassium and sodium, resulting in increased potential for fouling.
The increasing need to operate boilers efficiently and the economic need to be flexible with global fuel procurement means that it is vital to develop and possibly adapt the AFT process so it can provide rapid and accurate data. Power generators currently use the AFT as a means of predicting if a coal or biomass might create high levels of slagging and fouling. Quite often the data is only scrutinised after the fuel has been used, when ash deposits have already built up.
Manual interpretation
The four CTs would be estimated by an operator manually scanning through the images collected from a heating profile, from a furnace/camera system. Until recently, AFT systems worked with an analogue camera capturing images at a resolution of 752 by 582 pixels. These images would be captured at a rate of (up to) one per °C during the heating profile from ambient to 1500°C+ at a heating rate of up to 10°C/min. This type of system saves images over the duration of the test to allow the operator to retrospectively pinpoint the four characteristic temperatures of the ash melt on screen to the nearest 1°C. Each test runs with multiple samples positioned on a place holder, allowing multiple samples/repeats to be tested at the same time. Each run requires a five hour turnaround from initial acquisition of the coal ash for pressing into pellets to analysis of the CTs.
The steps towards an enhanced ash fusion test
Over the past decade, the use, process and applicability of the test has changed; there have been developments in alternative techniques and advances in the automation of the process.
The new ash fusibility furnace CAF G5, released by Carbolite Gero (Figure 2), has been upgraded in two key areas in order to address the problems of subjectivity and the emergence of biomass in the generation portfolio – namely better imaging (using a higher resolution camera and the addition of better in-situ lighting) and also the introduction of semi-automated image analysis. For better imaging, the system’s camera has been upgraded from an analogue system to a HD 1.3 Mb with 1280 by 1024 pixel image size. This gives a manual operator a crisper image to identify shape changes when in manual mode, helping to more accurately pinpoint the fusibility temperatures.

Figure 2. Carbolite Gero’s new CAF G5 ash fusibility furnace.
One problem with the analysis of biomass ash samples was the issue of poor internal lighting at low furnace temperatures. Coal ash samples generally have a higher initial deformation temperature (IDT) – or the first point of melting – than biomass ash; the first melting event for biomass can be considerably lower. At 650°C, enough radiant light is emitted in the viewing chamber to see the samples clearly. Below 650°C, however, it is too dark for the camera to collect usable images so any melting events are missed.
A new design was needed that was not only able to light the internal areas of the furnace but also robust enough to withstand the 1600°C temperature in the chamber. The new CAF G5 digital has solved this with a quartz rod through which a light is shone at low temperatures into the back wall of the chamber. This light then turns off at around 650°C once there is sufficient radiant light inside.
The second step towards the evolution of this furnace has been to address the issue of subjective identification of the images to identify the CTs. The new furnace includes an ‘automatic option’ feature whereby the fusion temperatures are recorded by a programme in real time. This is based on the criteria documented in the universal standards for ash fusion testing that the operators would be using in their analysis.
Conjunction with research: advanced ash fusion analysis
Carbolite Gero has incorporated some of the conceptual work from The University of Nottingham (by Cheng Heng Pang, Tao Wu and Ed Lester) into its new ‘automatic option’ in which an ash fusion profile is produced with the ability to plot multiple variables against temperature and time. A typical analysis profile is the plot of sample height/initial sample height (H/Hi) against temperature (Figure 3). This allows the user to see the profile created across the whole temperature range, rather than simply four characteristic temperatures. It is clear from these profiles that the use of four temperatures to describe the onset of a ‘phase change’ might not fully describe the behaviour of an ash sample. The concept of a full temperature profile was previously shown by the authors to act as a ‘fingerprint’ of the fuel. The new Carbolite Gero system is effectively a semi-automated system since it currently requires the operator to define regions of interest where the pellets are located before automated processing can begin.

Figure 3. Software graphical view of test piece fusibility in a Carbolite Gero CAF G5.
A research programme is currently underway at The University of Nottingham, UK, funded by the Biomass and Fossil Fuel Research Alliance (BF2RA), to fully automate the process to create an advanced ash fusibility test (AAFT). The BF2RA programme uses this new ash fusibility furnace to generate a new profiling system that can calculate the CTs but also produce a method of interpreting the shape of the pellet (height, perimeter, circularity etc.) to predict boiler performance without reference to the CTs. The image analysis and data processing stages all benefit from the advancement in the camera definition (from the old furnace to the new), with the improvement in image resolution resulting in less noise across the temperature range (Figure 4).

Figure 4. Comparison showing reduced ‘noise’ of the higher resolution image.
Potential for re-defining AAFT use in ash characterisation
If ash fusibility is to continue to be used by industry then it needs to be accurate, rapid and relevant to the needs of the modern boiler operator, who sources and burns a wide range of fuels (from coal to biomass) and with blends of coals and/or biomass.
This might mean that the four CTs are modified, or even abandoned, in favour of a profiling system that uses specific image analysis based on morphology rules to spot important changes in the pellet shape across the temperature range.
Since the profiles act as a fingerprint for a specific fuel supply, the comparison of the AAFT should also allow unexpected shipment-to-shipment variations to be identified.
Conclusion
Significant advances with hardware have been made recently using better, higher-resolution digital imaging, faster image processing and with better illumination of the samples in the furnace. This has been a step forward for both coal and biomass ash analysis.
Advances in software have led to a new form of software that can process hundreds to thousands of images automatically to provide shape data across the temperature range of the test.
There is significant potential to make new rules for identifying characteristic changes in pellet shape to predict boiler performance. The BF2RA project will work with end-users to try and create a fully automated system capable of predicting slagging and fouling issues in advance of a coal being bought on the spot market.
Edited by Harleigh Hobbs This article first appeared in the February 2016 issue of World Coal.
Edenville Energy met with Tanzania Electric Supply Co. Ltd (Tanesco) during January 2016. During these meetings, Tanesco presented a draft formal framework agreement for progressing Edenville’s Rukwa clean coal power project by setting out milestones for a power purchase agreement (PPA).
Edenville has reported that it is confident that submission of its existing power plant feasibility study, measured and indicated resource report and environmental impact assessment (EIA) for the mining operations will achieve many of the milestones outlined in the Framework Agreement.
Edenville has submitted its project concept note, which represents the first milestone defined in the framework agreement and is now working with Tanesco with a view to execute the agreement once specific due diligence has been completed.
The framework agreement will provide Tanesco’s formal support to Edenville’s plans to establish an integrated 300 MW clean coal power plant at its Rukwa coal project in the Sumbawanga District of south west Tanzania.
It is reported that Tanesco and Edenville, through its Tanzanian subsidiary Edenville International Tanzania Ltd, will work together on an exclusive basis to progress development plans for this clean coal power plant with a view to the coal mine and power generation facilities being operated for a minimum of 35 years.
In addition, Edenville will continue to work with its advisors to collate additional project data and financial information to enable Edenville to commence PPA and transmission line agreement (TLA) negotiations, which, if agreed as expected, will bring the project to the point of financial closure and construction.
The timing of these deliverables will be agreed once the framework agreement is formally signed, as is expected to be the case for all participants in Tanzania’s power generation expansion plan.
Edited from press release by Harleigh Hobbs
Jonathan Rowland
The end of last year was not a good time for the South African economy. At the beginning of December, ratings agency Fitch downgraded its view of the country’s creditworthiness to just one level above junk. Fellow ratings agency, Standard & Poor’s (S&P) may follow suit after revising its outlook for the country from stable to negative, a move based on the country’s “persistent electricity shortages, continued weak business confidence [and] labour disputes,” said S&P in a statement.
If that was not bad enough for a country with a rapidly increasing public debt load and low levels of economic growth, a political farce unfolded in mid-December when President Jacob Zuma sacked the respected finance minister, Nhanhla Nene, and replaced him with a virtually unknown backbench MP, David van Rooyen. That saw the rand falling to a record low against the dollar, prompting Mmusi Maimane, leader of the opposition Democratic Alliance, to accuse the president of playing Russian roulette with the economy.
Indeed such was the backlash to van Rooyan’s appointment that President Zuma was forced to replace him after only four days in office with Pravin Gordhan, a more experienced hand, who had held the economics brief before between 2009 and 2014 and whose appointment helped to calm investors.
“The return of Gordhan, who maintained the Treasury’s reputation for discipline during his first period in charge, helped to placate unsettled investors and led to the rand rebounding,” wrote The Economist Intelligence Unit in a forecast update. “However, the saga […] underlines a lack of clear leadership emanating from the presidency and heightens uncertainty about future policy directions.”
Against this backdrop, the outlook for South Africa’s mining sector is decidedly ugly, BMI Research’s Hugers told World Coal, with “a combination of low mineral prices, labour unrest and power shortages [continuing] to hurt miners’ profit margins and curb the sector’s investment attractiveness.”
‘’We expect the government to adopt a more populist policy, particularly with the upcoming (municipal) elections in 2016,” continued Hugers. “This would entail a policy shift to the left by supporting mining unions and their demand for further wage hikes. If the government decides to go down this road, this would result in a significant fall in the sector’s investment attractiveness and result in major miners halting operations or pulling out altogether, leading to further job cuts and a potential terminal decline of the industry.’’
That the ruling ANC feels the need to make such a leftward shift is an indication of the pressure placed on the party by the rise of the radically left-wing opposition group, the Economic Freedom Fighters (EEF), led by Julius Malema, former leader of the ANC’s Youth League and proponent of nationalising the country’s mining industry. That pressure, along with a strong showing from the largest opposition party, the Democratic Alliance, could see the ANC lose control of some key cities, including South Africa’s business centre: Johannesburg.
South Africa’s coal industry
Turning to coal and the picture is also less than pretty. The traditional dichotomy between export-focused coal operations and those that supply the domestic power market – primarily state utility, ESKOM – started to break down in 2015, according to Matthew Boyle, Principal Consultant at CRU, as low export prices and an increase in ESKOM’s demand saw coal that would usually head overseas redirected to the domestic market.
South African exports have also been hit by Chinese restrictions on imports of coal containing high levels of sulfur and ash (South Africa’s coal contains high quantities of ash), although demand from India is expected to offset that to some extent after the Indian government – travelling in exactly the opposite direction to its counterparts in Beijing – raised the coal ash limit for coal imports.
On the domestic front, much of the industry’s problems revolve around ESKOM, which is facing a funding shortfall of about Rand 237 billion (US$16.4 billion) to 2019, according to Boyle. The impact of ESKOM’s financial difficulties are manifold and start at the coalface.
“During 2014 and 2015, load shedding was a major issue for miners across the different sectors; this was no different for coal,” explained Hugers. “The result was production disruptions. So we’ve downgraded a lot of our production forecasts based on the assumption that ESKOM is pursuing a strategy of providing a band aid for these issues rather than providing structural reform.”
Without any apparent political motivation to implement the structural reform needed in South Africa’s power sector or to deal with ESKOM’s financial and operating problems, load shedding is likely to remain a feature of South Africa’s mining sector – indeed economy as a whole – dragging down growth prospects.
ESKOM’s issues are also hitting miners at sale. With moves to raise the price of electricity facing opposition from the government, the utility has been undertaking a cost-cutting initiative to try to bring down its projected shortfall. This has seen the utility refuse to renew an agreement with Exxaro Resources’ Arnot coal mine on the basis that the coal purchasing price was too high. Meanwhile, Glencore has closed its Optimum subsidiary in a battle with ESKOM over the price it is offering for Optimum’s coal, which the mine claims is below the cost of production.
Glencore’s struggle at Optimium points also to the wider issue of the place of multinational companies in South Africa’s coal industry. BHP Billiton, the world’s largest miner, has already effectively divested from the country with its spin off of its South African coal assets – the Khutala, Klipspruit, Middelburg and Wolvekrans thermal coal mines – as part of South32. And more divestment may be to come, according to Hugers.
“We’ll see [divestments] become a big part [of] 2016 with Anglo American’s decision to shut a lot of loss-making assets,” Hugers said. “I expect a lot of these loss-making assets to occur in South Africa’s coal industry, which is a big thing because Anglo American employs about 27 000 people and accounts for about 20 – 25% of total South African coal production.”
Outlook: beauty in the eye of the beholder
Despite all of this, it is not an entirely negative picture for the South African coal industry. BMI Research is positive beyond 2017 when it comes to the country’s coal production as continued rand weakness and cost-cutting measures at mines offer mining companies some respite. As ever in South Africa, politics will also play its part – although this time more positively, to encourage production growth.
According to Hugers, South Africa will produce 252 million t in 2016, growing to 262 million t in 2019 at an average annual growth rate of 0.1%. That compares to an annual contraction of 0.9% from 2010 – 2014.
There is also a significant improvement to infrastructure expected that will provide a boost to the sector. “Transnet’s plan to overhaul and expand the railway network will allow for much more efficient transportation and export coal, as well as reducing mining companies’ costs,” explained Hugers. Transnet plans to invest almost US$19 billion over coming years to improve South Africa’s rail network. This in turn will allow Richards Bay Coal Terminal (RBCT) to operate closer to full capacity.
Exports through RBCT hit a record 75.4 million t in 2015, according to IHS Energy, an increase of 4 million t on 2014, mainly at the expense of smaller export terminals. Total exports hit 77 million t.
The imposition of take-or-pay contracts with rail and port operators, similar to those that have kept Australian exports up in recent years, should also mean that South Africa’s coal exports remain relatively steady, said Matthew Boyle of CRU, who forecasts shipments of 75 million t in 2020.
Another trend impacting South Africa’s coal exports is the pushing of more sub-bituminous coal to export – particularly following India’s decision to raise the ash threshold for coal imports to 25%, a move that favours South Africa’s high-ash coal. Combined with the low prices of South African coal (prices have fallen 27% over the last 12 months, according to IHS Energy) this has seen South African coal replace Indonesian coal in India’s import mix.
“We expect South Africa to continue to favour sub-bituminous exports over bituminous exports, in particular while export prices remain low,” Boyle said.
South African coal may then hold a degree of beauty – at least for Indian coal buyers. But Indian interest in South Africa’s coal may not end there: Indian investors could also be set to benefit from the selling of assets by the major mining companies.
“When it comes to new players that we’ll see entering the sector, I think it’s going to primarily be Indian investment into coal assets,” said Hugers. “For example we have Jindal and Atha Group already looking into this. And following from this, we expect the cheap asset sales by Anglo American, for instance, to offer new entrants some opportunity to enter the sector, which will provide a cushion of support for production over the coming years.”
Note: This article first appeared in the February 2016 of World Coal as part of a report on southern Africa’s coal industry. Read the rest of the report below:
About the author: Jonathan Rowland is the Editor of World Coal.
Jonathan Rowland
Botswana is one of the longest-running multiparty democracies in Africa and boasts one of the lowest levels of corruption. Its government is also actively supportive of developing its coal resources – something that has long been talked about with little actual progress made. Hence the first question World Coal put to BMI Research’s Hugers: is it ever going to happen for Botswana coal?
“I do think it’s going to happen,” replied Hugers. “Falling coal prices are unlikely to deter Botswana from developing its coal mining sector as the government looks to support the diversification of the country’s economy away from its reliance on diamond exports. Since identifying the exploitation of the country’s considerable coal reserves as a national objective, the government has sought to provide a supportive environment for overseas coal miners and is working to put in place the necessary infrastructure to allow for increased production as exports.”
Hugers also highlighted a number of recent projects in the power sector to bolster his positive take on Botswana. As of December 2015, the government announced that it was actively seeking independent power producers for the development of the fifth and sixth units at the Morupule power plant – a total of 300 MW new capacity.
Independent power producer, Shumba Energy (formerly Shumba Coal) is also developing two coal-fired power plants in Botswana: the 600 MW Mabesekwa export independent power plant (MEIPP) and the 300 MW Sechaba Coal independent power plant (SCIPP). Prefeasibility studies have been completed for both projects, according to a recent Business Activities Report from Shumba, with the company now in the process of preparing bankable feasibility studies. Both projects foresee supplying electricity to South Africa, as well as into Botswana’s domestic grid.
There are also plans for a new coal-to-liquids, fertiliser and power plant. Dubbed ‘Project Tsosoloso’, the plant is expected to have a capacity of 304 MW for a US$4.2 billion investment. United Refineries Botswana and Kumvect are developing the projects with Holland & Hausberger selected as the technical partner.
Behind these plans is a government aim to become a net electricity exporter by 2018. That is unlikely, according to Hugers, but the developments are still welcome – particularly given the aforementioned issues with ESKOM’s power exports to the South African Power Pool – and could further boost the country’s wider mining operations.
“Significantly, interest in developing Botswana’s thermal coal reserves comes at a time when many multinational mining groups are scaling back output amid falling prices,” concluded Hugers. “Anglo American, African Energy, Exxaro and CIC Energy are a few of the major players whose projects will transform the [Botswana coal] industry over the next decade.”
Note: This article first appeared in the February 2016 of World Coal as part of a report on southern Africa’s coal industry. Read the rest of the report below:
About the author: Jonathan Rowland is the Editor of World Coal.
Jonathan Rowland
Despite tensions between the ruling party, Frelimo, which won the 2014 general election with just over 57% of the vote, and the main opposition party, Renamo, Mozambique remains one of the more attractive markets in sub-Saharan Africa, according to BMI Research’s Mozambique Operational Risk Report. The government is also committed to developing its coal industry and generally welcome of foreign investment to do so.
Indeed foreign players – from Brazil’s Vale to a recent influx of Indian investors – dominate the country’s coal sector. Vale’s Moatize mine and associated Nacala Logistics Corrider is by far the most advanced project in the country, despite Vale announcing in September 2015 that the ramp-up in metallurgical coal exports from Mozambique would be constrained for the remainder of the year due to disruption at the port of Nacala and on the railroad to the port. Its exports are expected to remain flat y/y at 3.2 million t, according to CRU – a fall on its previous forecast of 6.5 million t.
Overall, Mozambique exported an estimated 2.6 million t in 1H15, according to CRU, up 31% on the previous year, with its coal comparable to that coming out of Australia. Key export markets were India, Taiwan, China and Japan.
Yet despite the potential and the interest in Mozambique coal, infrastructure remains the biggest challenge to its development – a challenge that becomes harder to solve in today’s low-price environment. “Mozambique’s coal production growth will continue to be hampered by low global coal prices, high domestic start-up costs and inadequate infrastructure,” BMR Research’s Mitchell Hugers said – with agreement from CRU’s Boyle.
“Rail and port infrastructure is probably the key cost factor influencing the seaborne metallurgical coal market,” said Boyle. “In recent years, we estimate that transportation costs [for Mozambican coal] have been about US$50 – 60/t, a result of operating on an inefficient multi-cargo rail line and also a result of using a less than ideal port solution, whereby coal is shipped 40 km offshore using handymax ships, then transhipped to panamax vessels. This transportation inefficiency has been adding about US$20/t to operating costs.”
That is starting to change with the development of the Nacala-a-Velha coal terminal, which opened in mid-July 2015. “It’s definitely going to be positive as its development will provide an alternative route to the transportation of coal from Tete,” said Hugers.
Away from transportation, Hugers also highlighted the lack of a sufficient power supply as a major downside risk, preventing companies from reaching their maximum output. And as with South Africa’s mining industry, ESKOM may again be to blame: “An inability [by ESKOM] to meet domestic demand will curb electricity exports to other members of the Southen African Power Pool,” explained Hugers. “South Africa is the most developed power market in sub-Saharan Africa and a failure to export electricity to Botswana and Mozambique in particular will hurt these economies.”
Outlook: the bad comes good?
Over the longer-term, however, the outlook for Mozambique’s coal industry is more upbeat as the infrastructure challenges are worked through – though they will cast a shadow over the country’s growth prospects for a while yet. “We are quite positive on Mozambique’s coal production – strong single digit growth,” said BMI Research’s Hugers. “Although I’m saying single digit growth; it won’t be double digit because this sector is going to face some significant challenges.”
CRU’s Boyle takes a more positive view, however: “Beyond 2015, we expect exports from Mozambique to rise quickly as Vale’s export volumes from Moatize ramp up. However, we have assumed a slower pace of export growth than our previous forecasts, given the problems at the Nacala port. Between 2016 and 2019, Mozambican metallurgical coal exports are forecast to grow at a CAGR or 21% to reach 14.8 million t – which is significant growth over just a few years. Mozambique is forecast to account for 5% of metallurgical coal export in 2018, compared to 2% in 2015.”
Vale will be responsible for most of this growth – but Indian firms could also start to play a significant role in developing Mozambique’s coal assets. With the acquisition of Rio Tinto’s coal assets in 2014 for US$50 million, International Coal Ventures joined India’s state-owned mining company, Coal India, and Jindal in investing in the country.
Nor might that interest be confined to Indian companies: “We believe that Indian firms will increasingly be joined by other Asian firms over the coming years as other countries look to secure long-term access to resources of metallurgical and other types of coal,” said Hugers, citing the example of Japanese trading house, Mitsui, who bought a 15% stake in Vale’s Moatize coal mine and 35% in the Nacala Logistics Corridor for US$313 million in December 2014.
There has also been some Chinese investment in the country with Ncondezi Energy signing a joint development agreement with Shanghai Electric Power (SEP) in January 2016 to develop an initial 300 MW coal-fired power plant in Tete Province. The agreement will see SEP, which is majority owned by Chinese state utility, State Power Investment Corp., invest up to US$25.5 million for a 60% stake in a new holding company for the power project, Ncondezi Power Co.
The project, which also includes development of a captive coal mine, to be developed by Ncondezi Energy independently of SEP, aims to develop the power plant in 300 MW phases until it reaches a final capacity of 1800 MW.
New entrants will have to overcome the significant cost challenges involved in constructing a mine and related transport infrastructure in a low-cost coal environment, however. As a result, CRU does not anticipate significant volumes from these companies before 2019, “despite numerous plans for significant capacity additions.”
“Capital costs to develop the assets have increased relative to the original plans,” concluded Boyle. “While operating costs are also less favourable.”
Note: This article first appeared in the February 2016 of World Coal as part of a report on southern Africa’s coal industry. Read the rest of the report below:
About the author: Jonathan Rowland is the Editor of World Coal.
Jonathan Rowland
Sergio Leone’s classic spaghetti western, ‘The Good, the Bad and the Ugly’, may not have much in common with southern Africa’s coal industry. But according to Mitchell Hugers, Commodities Analyst at BMI Research, the film’s title is a pretty good summary of the state of the coal industry in southern Africa.
That industry is dominated by South Africa – ‘the ugly’ in Hugers’ analogy. It accounts for some 94.6% of the region’s production, dwarfing that of Mozambique (the bad) and Botswana (the good). Yet even with South Africa among its ranks, the coal industry of southern Africa is still relatively small. According to BMI Research, it will account for only 3.7% of global output in 2016 – some 270 million t.
That share will not rise substantially to 2020. But despite its small size, what happens in southern Africa still matters on a global stage – particularly as it relates to India. South Africa’s thermal coal is currently pushing out significant volumes of Indonesian coal in India’s import mix: such competition is at least partly responsible for a dramatic fall (some 50 million t) in Indonesian coal exports in 2015.
Meanwhile, Indian companies are set to play an important role in developing Mozambique’s metallurgical coal assets. That trend could prove worrisome to traditional metallurgical coal suppliers to India, which will continue to need the steelmaking ingredient even as the country seeks to become self-reliant in thermal coal.
Note: This article first appeared in the February 2016 of World Coal as part of a report on southern Africa’s coal industry. Read the rest of the report below:
About the author: Jonathan Rowland is the Editor of World Coal.
BG exploration and production (E&P) activities in Australia continued to ramp up in 4Q15, according to the company’s latest quarterly report, averaging 117 000 barrels of oil equivalent per day (boe/d) and hitting a daily record of 140 000 boe/d in January.
As a result, less than 20% of the gas supplied to its Queensland Curtis LNG (QCLNG) plant, which turns coalbed methane (CBM: called coal seam gas in Australia) into liquefied natural gas (LNG) for export to Asia, was sourced from third-party contracts.
In November, BG assumed operational control of Train 2 at QCLNG and commenced full commercial operations. Both LNG trains are now running at plateau with 31 cargoes produced in 4Q15 and 32 cargoes delivered. Overall, a total of 83 cargoes were produced in 2015.
“We are pleased to have delivered excellent operational performance in 2015 with results in ling with, or ahead of, our guidance for the year,” said BG CEO, Helge Lund. “The ramp up of both LNG trains and out QCLNG project in Australia […] drove strong E&P operational performance.”
BG and its Australian partners also announced the approval of a US$1.4 billion development programme, known as Charlie, to continue development of tenements in the Surat Basin to sustain gas supply to QCLNG. The development includes the construction of 300 – 400 new wells, a large field compression station and associated pipelines and faciltiies to feed into existing gas processing and water infrastructure.
Overall, the company produced 704 000 boe/d in 4Q15, an increase of 16%, with 282 LNG cargoes delivered, up 58%. Lower commodity prices hit the company’s earnings, however, with quarterly EBITDA down 22% at US$1.4 billion and full year EBITDA down 39% at US$5.6 billion.
BG is currently the subject of a takeover by Royal Dutch Shell. The takeover has been approved by Shell’s shareholders and is expected to be approved by BG’s shareholders later this month.
Edited by Jonathan Rowland.
Apex industry body, The Associated Chambers of Commerce and Industry of India (ASSOCHAM), has recommended the Indian government put metallurgical coal blocks to auction and allocate them through competitive bidding in order to boost domestic production of metallurgical coal and generate revenue for the exchequer.
“Coking coal blocks should not be allotted on nomination basis as this would delay [metallurgical] coal development in India and discourage creation of level playing field in steel sector,” stated ASSOCHAM in a letter addressed to Piyush Goyal, Union Minister of State for Coal, Power, New and Renewable Energy.
Import of metallurgical coal by India’s steel industry crossed 45 million t in 2014 –2015 compared to approximately 39 million t in 2013 – 2014. It is reported that this is likely to increase to 180 million t in wake of India’s ambitious target of producing 300 million tpa of crude steel by 2025.
Additionally, India’s metallurgical coal import has also increased from 13 million t in 2003 – 2004 to over 39 million t in 2013 – 2014 and during the same period metallurgical coal production dropped from about 18 million t to 14 million t and supply of washed metallurgical coal to steel plants was only 6.6 million t in 2013 – 14.
“This is resulting in a loss of forex reserves, stress in inland transportation and logistics and congestion at ports, as such it is imperative that indigenous production of [metallurgical] coal is given a big thrust,” explained D.S. Rawat, Secretary General, ASSOCHAM.
“Allocation of [metallurgical] coal blocks to steelmakers has much merit as steel industry is capable of efficiently utilising 100% of prime [metallurgical] coal reserves from the blocks,” continued Rawat.
In the letter to the Union Minister, ASSOCHAM has highlighted that many virgin coal blocks of Bharat Coking Coal Ltd (BCCL) are lying undeveloped despite being allocated long back, while operational blocks of BCCL are unable to produce to their full potential.
Similarly, ASSOCHAM has urged that metallurgical coal blocks should be allocated to public sector steelmakers to ramp-up production to meet country’s growing metallurgical coal needs.
Edited from press release by Harleigh Hobbs
As McLanahan Corp. has grown, the company has continued its evaluation of how to best serve its customers around the world. Following careful evaluation, McLanahan has created a product management and development team, leading to promotions and changes in corporation structure.
Cory Jenson, previously the General Manager – Environmental, has been promoted to Vice President – Global Product Management and Development. In his new role, Jenson oversees a team of product managers, engineers, marketing and technical services personnel from around the world. This group is focused on evaluating customers’ equipment needs and improving product lines to meet these needs and market standard.
These changes have also led to the promotion of Mark Krause, formerly General Manager – Aggregate Processing, to Managing Director – North America. Internally, the company has combined its former US-based operating divisions to create cohesive sales, engineering and customer service teams. The combination of the North American teams, similar to McLanahan’s other global office, will allow the company to better service customers, regardless of industry or product line.
“These internal changes are really about how we serve our global customers,” commented Sean McLanahan, CEO. “By refocusing our teams on specific areas, we’ll be better able to improve the service and products that we provide to our different markets.”
Edited from press release by Harleigh Hobbs
Terex has received a takeover proposal from Chinese construction company, Zoomlion Heavy Industry Science and Technology, in a move that could complicate Terex’s proposed ‘merger of equals’ with Konecranes,
According to Terex, it has now entered into a confidentiality agreement with Zoomlion and is in discussions with the Chinese company over its proposal, which values US company around US$3.28 billion.
“Consistent with its fiduciary duties, the Terex board of directors, in consultation with its legal and financial advisors, is carefully reviewing the Zoomlion proposal to determine the course of action that it believes is in the best interests of Terex shareholders,” the company said in a statement.
Terex also noted that it had not changed its recommendation of the proposed merger with Konecranes.
For its part, Konecranes said in a statement that it “continues to be convinced that the merger represents a highly compelling opportunity for both companies and their shareholders.” The Finnish company also accused the stock market on undervaluing the inherent value creation potential of a merger.
Edited by Jonathan Rowland.
The UK’s Fiddler’s Ferry coal-fired plant closure
- SSE will enter into consultation with employees and stakeholders at Fiddler’s Ferry coal-fired power plant on a proposal to end commercial operations at three of the plant’s four units.
- The closure of the UK Fiddler’s Ferry plant is the latest example that the UK government has discarded ‘King Coal’ as part of the solution to the UK’s energy crisis, according to Unite.
- According to GMB, the UK government should not allow Fiddler’s Ferry power plant to closure until there is new capacity to maintain electricity supply.
Coal plant developments
- A decision will be made this quarter on whether to move ahead with construction of a binderless coal brigquetting plant at a major coal producer in South Africa.
- BigLift Shipping’s Happy Buccaneer successfully transported and installed a 1200 t 45 m high continuous ship unloader from Kaohsiung, Taiwan, to the Haranchi thermal power plant in Japan.
- Bharat Heavy Electricals Ltd receives order for setting up a supercritical thermal power project involving one unit of the country’s highest rating 800 MW sets in Tamil Nadu, India.
Coal project developments
- Development at Universal’s NCC coal project is awaiting on a coal supply agreement with state utility Eskom before moving the mine can move to production.
- Atrum Coal has received encouraging yields from quality testing at its Groundhog anthracite project, in British Columbia, Canada, and expects this to positively impact new pre-feasibility study.
Mine operations sales and closures
- TerraCom, the operators of the Baruun Noyon Uul coal mine in Mongolia, is considering opportunities to buy existing coal mines in Queensland and Indonesia.
- Westmoreland Coal completes acquisition and financing of the San Juan mine in New Mexico.
- Walter Energy is to sell its remaining US coal assets to Seminole Coal Resources.
- Alpha Natural Resources is to close eight mines in Raleigh and Boone counties in West Virginia.
- Jennmar is to buy DSI’s US mining operations, while DSI will purchase Jennmar’s European, Latin American and Australian businesses in a series of agreements.
Mining
- Wollongong Coal has increased its resources at its Wongawilli coal mine as its prepares to restart operations in 2Q16.
- Eskom will not renew its 40 yr contract with Exxaro Resources for supply of coal to Arnot mine. The company will approach the open market to identify cost-efficient suppliers.
- Caterpillar’s mining business has announced a loss of US$105 million in 4Q15 on the back of a 23% fall in sales and revenues.
- Wescoal Holdings’ Elandspruit coal mine in Mpumalanga Province, South Africa, is now delivering its production target of 165 000 tpm.
- Pit reconfiguration work at Universal Coal’s Kangala coal mine resulted in a fall in ROM coal production in 4Q15.
Not to be missed …
- A new report from the Mining Association of Canada indicates the mining industry has made a strong economic contribution to Canada despite its downturn.
- Overall global coal demand will increase to 2040, despite coal playing a falling role in the global energy mix.
- A team of researchers led by the Department of Energy has discovered that rare earth elements can be removed from two US coal byproduct materials through an ion-exchange process.
CIMIC Group has amended its offer to acquire Australian mining contractor, Sedgman, after Sedgman applied to the Australian government’s Takeovers Panel asking it to stop CIMIC from buying more shares in the company and sending out its formal Bidder’s Statement to investors.
CIMIC currently owns 45.44% of Sedgman – up from the 36.99% it held when it launched the takeover bid in mid January. The additional shares were purchased by CIMIC on the ASX.
Sedgman had wanted the Takeover Panel to force CIMIC to return the additional shares it had acquired since releasing its offer. But following the release of the revised offer, the Takeover Panel has decided to take no action.
The Sedgman board is continuing to advise shareholders to take no action on the CIMIC bid until the board has had time to assess the revised Bidder’s Statement and provide a recommendation. CIMIC’s formal Bidder’s Statement is not expected to be sent to shareholders until at least 8 February.
CIMIC is formerly known as Leighton Holdings and is owned by Spanish engineering giant, Grupo ACS. Its bid for Sedgman values the company at AUS$256 million.
Should the takeover succeed, CIMIC has said it would “reconstitute the Sedgman board” and review the dividend and capital management policies of Sedgman – a clear reference to a dispute last year between CIMIC and Sedgman Chairman, Rob McDonald.
CIMIC voted against Sedgman’s remuneration report and opposed the appointment of three independent directors at the company’s annual general meeting. Instead, it demanded Sedgman appoint a second CIMIC-nominated director and reduce the board’s size to five people.
Instead, Sedgman had said it was undertaking a process to identify and recruit Non-Executive Directors – essentially ignoring CIMIC’s demands – although that process has been paused pending the final outcome of the offer.
Separately, Sedgman also said that it expected to report a profit for the six months to December 2015 of AUS$7.5 – AUS$8 million.
Edited by Jonathan Rowland.
Mongolian coal mining company, Mongolian Mining Corp. (MMC), is seeking to restructure debt worth US$600 million, according to a company statement to the Hong Kong Stock Exchange. The US$600 million comprises 8.875% senior notes due in 2017.
MMC has been hit by weak metallurgical coal markets – particularly in its principal target market in China, where changes to economic policy has resulted in reduced crude steel production.
The company has appointed J.P. Morgan Securities (Asia Pacific) and SC Lowy Financial (HK) as restructuring advisers. It is encouraging note holders to form a committee “for the purposes of facilitating discussion between the holders and the company.”
The restructuring advisers will assist the company in assessing various restructuring options and formulating a plan to implement an appropriate restructuring of the senior notes.
Edited by Jonathan Rowland.
BHP Billiton spin-off, South32, will book a significant writedown of its thermal coal, manganese and alumina businesses in its latest half year results, the company has said in a statement, blaming a downward revision to commodity demand and prices.
“We will continue to focus on the things that we can control […] as we seek to optimise the performance of our operations,” said Graham Kerr, CEO of South32. “We are no however immune to external influences and the significant change in the outlook for commodity prices is expected to results in non-cash charges of approximately US$1.7 billion when we report our December 2015 half year financial results. ”
While the company’s manganese assets in Australia and South Africa provide the bulk of the impairment charge – US$1 billion in total – South32 is also writing down the value of its thermal coal assets in South Africa by US$400 million.
The company is also currently finalising cost reduction plans its Illawarra metallurgical coal assets, among others, with these initiatives expected to result in a “substantial reduction in employee numbers during the remainder of FY16,” which runs to the end of June this year.
Further details of the plans will be released with the company’s half year results on 25 February.
The company has, however, already outlined its restructure plans for its South African Samancor manganese joint ventures, announcing the loss of 620 jobs across the business and a reduction in saleable volumes by 36% at the Wessels mine and 18% at the Mamatwan mine.
The market reacted positively to the news with the company’s share price bouncing 10% after it was announced. Similar initiatives at the company’s coal assets would see South32 follow Glencore in cutting its coal production in an effort to deal with current oversupplies in both thermal and metallurgical coal markets – a move that’s highly likely, according to Mitchell Hugers at BMi Research.
“I do believe that these cuts [to South32’s manganese business] are only the beginning,” Hugers told World Coal in an emailed statement. “We’ll see further production cuts/job losses at the firm’s coal operations in South African and Australia.”
Edited by Jonathan Rowland.
GMB, the union for energy and engineering construction workers, commented on SSE’s announcement that it is entering into consultation with workers at Fiddler’s Ferry coal-fired power plant, Cheshire, on closing three of the four units at the plant.
Albie McGuigan, GMB Regional Officer, said: “Last week the Institution of Mechanical Engineers warned that the UK faces an electricity supply gap of up to 55% by 2025 because of the closure of coal and nuclear plants.”
He continued: “It would now appear that coal, the cheapest form of energy generation in the UK, is being squeezed out of the market prematurely by either the suppliers wanting more profit or by Government insistence on these stations closing.”
McGuigan emphasised the consequences of closing coal facilities, such as Fiddleer’s Ferry, should be considered; it could leave a large energy gap. McGuigan pointed out there almost no new construction of any “sustainable replacement capacity, such as gas-fired CCGT’s,” new nuclear facilities are at least another ten years away and wind – reliant on weather – “could not sustain the needs for London let alone the UK.”
McGuigan believes there is much to learn from the 4 November 2015 when the National Grid had to raise special measures to keep the lights on – on not a particularly cold day and before nine power plants were closed in 2016.? He stressed: “there should be a U turn. Government should not allow the closure of this power station until new capacity is on stream to keep the lights on.”
Edited from press release by Harleigh Hobbs
Atlas Copco has introduced its SmartROC D60, a surface drill rig for most types of surface drilling applications and tough conditions.
A drill rig that is robust enough and smart enough to tackle aggregate and limestone quarrying, as well as surface mining and construction drilling, has been developed by Atlas Copco.
SmartROC D60, a highly versatile Down-The-Hole (DTH) rig is designed for drilling 110 –178 mm (4 5/16 – 7 in) holes and can be used in a wide variety of applications and challenging drilling conditions.
The rig’s hole navigation (HNS) and auto positioning systems ensure that the rig will locate the exact position of each hole and then accurately collar and drill them to precisely the required depth and inclination. This gives a better fragmentation and improves both the loadability and crushability.
In addition, the robust, standard feed carrying 5 m tubes, features built-in sensors in the rod handling cylinders and carousel motor, enabling more reliable rod handling and eliminating the need for inductive sensors. The rig also has Auto Rod Handling as a standard feature to automatically add and then extract the rods when the desired depth is reached.
Low fuel consumption is achieved through intelligent control of the compressor load and engine RPM, resulting in an estimated fuel saving of up to 15% compared to the FlexiROC D60.
Mike Wentworth, Product Manager for Atlas Copco in the US, said: “What we have in the SmartROC D60 is robustness and intelligence working together to achieve optimum performance and cost efficiency. The result is that the owner gets more holes per shift and consistently high productivity.”
Mattias Hjerpe, Product Manager at the Surface and Exploration Drilling division in Sweden, added: “The development of this rig is the latest in our drive to produce a wider range of surface drill rigs that can give better results at lower costs. It’s the smart way to go in today’s economy and I can promise that these rigs will get even smarter in the future.”
The SmartROC D60 can also be used for toe-hole, dewatering hole and horizontal drilling, and, as the feed can be positioned horizontally, feed maintenance is also easier.
At worksites where bench stability may be in doubt, the SmartROC D60 can be used together with Atlas Copco’s BenchREMOTE operator station that enables it to be operated at a distance of up to 100 m.
Edited from press release by Angharad Lock
AGL is to quit the Australian coalbed methane sector (CBM: called coal seam gas in Australia) after a strategic review of the company’s CBM business commissioned by new Managing Director and CEO, Andy Vesey.
“AGL […] has taken a strategic decision that exploration and production of natural gas assets will no longer be a core business for the company due to the volatility of commodity prices and long development lead times,” the company said in a statement.
As a result the company will include a post-tax impairment charge of AUS$640 million against the value of its gas exploration and production assets in its financial results for the six months ending December 2015. “The impairments has minimal impact on FY16 underlying profit,” added the company.
“The two major drives of the impairment charge have been the fall in global oil prices with consequent effect on long-term Queensland gas prices and Waukivory pilot well data indicating lower-than-expected production volumes for the Gloucester Gas Projects,” the company concluded.
As a result, ASL will not proceed with the Gloucester Gas Project and cease production at the Camden Gas Projects – both in New South Wales.
“Exiting out gas assets in New South Wales has been a difficult decision for the company,” said Vesey. “ASG has invested significantly in these projects and communities over the past seven years for the Gloucester Gas Project and ten years in the case of the Camden Gas Project.”
The company also said it would sell its Queensland gas assets in Moranbah, Silver Springs and Spring Gulley – although the sales process may take some time, it admitted, due to the current difficult market conditions.
The announcement was welcomed by New South Wales Greens mining spokesperson, Jeremy Buckingham, who called it a “smart strategic decision” by AGL. “This decision shows that a social licence is necessary to operate in a community. Coal seam gas is opposed by the vast majority of people and coal is rapidly losing its social licence to operate in NSW.”
And as a nod to that “social licence”, AGL said it would establish an AUS$2 million Independent Trust Fund to identify investments options to deliver ongoing economic benefit to the Gloucester community. “We remain committed to leaving a positive legacy in these regions,” said Vesey.
Edited by Jonathan Rowland.
Following a US Court of Appeals decision keep in place the US Environmental Protection Agency’s controversial Mercury Air Toxics Standards (MATS) rule, ADA-ES has introduced the ADA Health Check, a new service to help power plant operators to best meet MATS compliance across a range of operating conditions. The service was introduced at the Energy Utility and Environment Conference in San Diego.
According to the company, ADA Health Check provides a compliance strategy review combined with expert analysis to ensure consistent and optimal compliance with state and federal mercury rules. This includes a critical check up on compliance technologies including unit-specific operations, fuel variability and combustion, APC equipment and performance, ACI/DSI system operation, sorbent usage rate, CEMS operation and mercury emissions.
“With the MATS rule in place, the clock is ticking on getting power plants into compliance,” said Sharon Sjostrom, Chief Product Officer at ADA. “Many in the industry may feel deceptively confident that they are in compliance. However, we’ve seen that results from tests conducted in the spring may not represent performance during the hot summer months. Furthermore, fuel quality can affect mercury emission levels. Our goal with ADA Health Check is to help ensure that power plants can meet MATS emission levels across a range of operating conditions and that specific control equipment is safe and reliable.”
To address plant operating variables, the ADA Health Check team assesses the impact of changes in operations, including seasonal changes, cycling load, and fuel variability on future emissions. Other assessments include rating Hg control performance using ADA’s proprietary models, providing recommendations for ongoing compliance to improve reliability and reduce operating costs, and evaluating the safety, reliability, and operability of mercury CEMS, ACI and DSI equipment.
ADA’s in-house team of experts use an interactive engineering process to review plant operations from coal pile to the stack to assess the “health” of power plant control systems. The ADA team has supported plants in evaluating mercury control options for more than 25 years, including conducting mercury control demonstrations at more than 100 plants.
Edited by Jonathan Rowland.
Unite, the country’s largest union, said that the recent announcement that SSE expects to close three of its four units at the coal-fired Fiddler’s Ferry power plant was ‘a disaster’ for the country’s energy needs, the local economy, and the workers and their families.
The union indicated the potential closure was the latest glaring example that the government has discarded ‘King Coal’ as part of the solution to the UK’s energy crisis.
Unite National Officer for Energy Kevin Coyne said: “This is clearly a decision that SSE has made which will impact on at least 270 employees from Merseyside who will lose their jobs as a result.
“However this is clearly in line with government policy in their dash from coal to gas and a determination that coal will not be a sustainable energy source in the future. The government’s carbon floor tax has added massive additional cost while their decision to renege on carbon capture and storage has removed all confidence from the industry.
“What is left is a loyal workforce feeling that important decisions about their future are out of their control. We will engage with the company however to ensure that every avenue to save this plant is explored.
According to Coyne, this is another move by the UK to discard coal’s role in future energy strategies, adding to the “jettisoning of the £1 billion carbon capture and storage (CCS) competition by chancellor George Osborne in November” that put “another nail in the coffin of ‘King Coal’.” He emphasised CCS could have provided a good future for coal by maintaining carbon emissions to be within EU limits.
Unite Regional Officer Graham Williams said: “The workers are devastated by the news, but are also angry at the lack of joined-up thinking with regards to the government’s energy policy.
He continued: “If the government were prepared to pay the proper rate for electricity this would be a small price to pay to keep this workforce in employment and it would assist the National Grid system greatly now and in the future.”
“It is a sad day for the workers and their families and Unite will be doing its utmost to support our members in the difficult times ahead,” Williams concluded.
The Fiddler’s Ferry potential closure follows a recent pattern of UK coal closures with the shutting down of the UK’s last underground coal mine at Kellingley coal mine, near Castleford in December; the intended ceasing of the coal-fired Eggborough site in West Yorkshire in March; and the Ferrybridge C power plant expected to shut next month.
Edited from press release by Harleigh Hobbs
SSE’s Fiddler’s Ferry coal-fired power plant, Cheshire, has seen substantial losses in recent years and this is expected to continue through to 2020.
As a result of continuing difficult economic and environmental conditions as the UK moves away from coal-fired power, SSE has decide to enter into consultation with its 213 employees and stakeholders at the plant on a proposal to end commercial operations at three of the plant’s four units.
The consultation with its employees and other stakeholders, including local politicians, is expected to be completed around the end of March 2016.
The company expects that following the consultation three units will likely close by 1 April 2016 – but a final decision has not yet been taken.
The fourth unit has a contract to provide services to the electricity system for the winter of 2016/17 and therefore is not included in a potential closure.
Subject to the outcome, SSE will be discussing options for future employment within the SSE group with its staff, including any potential decommissioning work at the site, with a view to avoiding any potential redundancies. If this is unavoidable enhanced terms will be discussed during the consultation process.
The company has reported in a press release that it will actively seek to avoid, but cannot rule out, some compulsory redundancies if an ongoing role for the units at the station cannot be identified.
Paul Smith, SSE Managing Director, Generation, explained that the plant had made a large contribution to the UK’s energy supplies for over 45 years, but the economic realities of running the ageing plant at a loss could no longer be ignored.
He said: “We are fully aware of the impact this will have on our colleagues, their families, and the community and our priority is to support staff during the consultation process … The reality is the station is ageing, its method of generating electricity is being rendered out of date and it has been and is expected to continue to be loss-making in the years ahead. Sustaining for too long loss-making power stations would undermine SSE’s ability to invest in modern generation plant in the UK.”
Fiddler’s Ferry failed to secure a contract for electricity provision in 2019/20 in the recent Capacity Market Auction in December 2015.
Three of its four units have a Capacity Market contract for 2018/19 but the economic outlook in the generation market has changed substantially since it was awarded and it is projected to incur unsustainable losses even with this contract.
The regulations of the Capacity Market mean SSE will make a payment of around £33 million to the UK government if a decision to terminate its Transmission Entry Capacity (TEC) and cease commercial operations is taken.
Smith explained: “The fact it makes more sense for SSE to contemplate making a substantial payment in lieu of the capacity agreement relating to Fiddler’s Ferry in 2018/19 demonstrates just how economically challenged Fiddler’s Ferry has become – its losses are unsustainable.”
Edited from press release by Harleigh Hobbs