Atrum Coal’s board ructions have taken another turn after Gino D’Anna, Atrum’s co-founder and third largest shareholder, sent a letter to the board of directors requesting a general meeting to consider a resolution to remove current directors, Cameron Vorias and Steven Boulton.

D’Anna founded Atrum with Russell Moran but was forced to resign from the company last year, with Moran, after what The Australian Business Review [subscription required] called an “ugly board dispute” that centered on loans taken out against the pair’s stakes in the company.

The third and second largest shareholders, D’Anna and Moran, still own about quarter of Atrum between them, according to the company’s website. The company’s largest shareholder is Lenark Pty, a company associated with current Non-Executive Director and former Executive Chairman, James Chrisholm.

According to a company statement, the board is now considering its obligations in connection with D’Anna’s letter and will provide an update in due course.

Vorias is currently the Managing Director and CEO of Sojitz Coal Mining, while Boulton most recent role was a CEO of infrastructure and utilities investment company, Hastings Funds Management. Both a Non-Executive Directors of Atrum Coal.

Atrum Coal is developing the Groundhog anthracite project in British Colombia, Canada, It recently announced positive yield results from quality testing at the project and is now working on a revised pre-feasibility study for the site.

Edited by Jonathan Rowland.

A new report from the Mining Association of Canada (MAC) has detailed the mining industry’s economic contributions, challenges and opportunities in Canada.According to the report, despite market volatility and downward pressure on commodity prices, the mining industry’s economic contributions to Canada remain strong during the downturn.

“The findings of this report serve as a reminder that even during a downturn, the mining industry plays a vital economic role in Canada’s rural and remote communities and in our largest cities,” stated Pierre Gratton, President and CEO, MAC.

MAC’s latest annual Facts & Figures report revealed the industry directly employed more than 375 000 people in 2014.

The mining industry also remains the largest private sector employer of Aboriginal peoples in Canada on a proportional basis, with employment levels poised to increase as the industry develops.

Additionally, the report found the mining industry is deeply interconnected to other sectors of the Canadian economy, with more than 3700 companies supplying goods and services to the Canadian mining industry. In 2014, Canada’s mining sector contributed CAN$57 billion to the national GDP, up from CAN$54 billion in 2013, and mining industry exports continued to account for upwards of 20% of the Canadian total.

The report also noted several policy areas that are essential to securing the estimated CAN$140 billion in potential new mining investments that could come to fruition over the next decade in Canada.

“A downturn is not a time for governments to lose focus on mining,” added Gratton. “There are actions that can be taken now so that Canada is well positioned to attract new investment and seize growth opportunities when the cycle improves, as it invariably will.”

These policy areas include: 

• Ensuring the regulatory process is robust and efficient, and includes meaningful consultation with Aboriginal communities. 
• Addressing the costs of operating in remote and northern Canada where infrastructure is lacking. The introduction of new tax measures and/or a northern-specific fund within the proposed Canada Infrastructure Bank can help facilitate the building of critical infrastructure. 
• Enhancing funding for Aboriginal skills training initiatives to enable Aboriginal peoples to access well-paying and highly-skilled jobs in mining. 
• Supporting the industry’s innovation priorities to facilitate continuous improvement in the sector’s environmental and health and safety performance.

ASX-listed operator of the Baruun Noyon Uul metallurgical coal mine in Mongolia, TerraCom, is considering options to expand its business through acquisitions in Australia and Indonesia, according to a recent company announcement.

“In order to support the growth and expansion of the company and to de-risk from a single mine and single country operators, TerraCom continues to evaluate cash generative assets for potential acquisition,” the company said.

The assets under consideration include a mature mining operations currently in care and maintenance in Queensland, Australia, and a coal mining operation in Indonesia capable of producing 500 000 5py of hard coking coal.

Supply chain optimisation

Meanwhile the company is working to optimise its supply chain in Mongolia, which it hopes will lead to “substantial improvements” in cash margins and profitability with benefits expected to be realised within 1H16. The work will see the company switch to processing coal onsite, saving on VAT and transport cost, as well as improving yield and product quality control.

Financial restructuring

The company also said that it has made “significant progress” in restructuring its balance sheet, reaching agreement with its existing note holders to invest in a new five-year interest-only bond that would require no cash payments until 23 December. It has also secured a new loan of US$5 million from its existing note holders that replaces a proposed AU$7 million equity placement to SPG Investment Holdings.

The new loan “not only provides the company with important additional working capital but also avoids the shareholder dilution that would have occurred had the placement to SPG gone ahead,” the company said.

In addition, the company has received conversion notices from holders of 50% of its convertible notes and issues corresponding shares to the converting parties, reducing the company’s total debt by US$5 million. The remaining holders of convertible notes will be incorporated into the new bond – extending the term of this debt and eliminating the prospect of shareholder.

Edited by Jonathan Rowland.

Metso, a leading global industrial company in the mining and aggregates industries and in the flow control business, has appointed Eeva Sipilä as its Chief Financial Officer (CFO), effective 1 August 2016.

Metso’s current CFO Harri Nikunen will continue in his role until the end of July, after which he will take on new responsibilities within the company.Sipilä joins Metso from Cargotec Corporation, where she has worked as Executive Vice President and CFO.

She will be a member of Metso’s Executive Team and will report to Matti Kähkönen, President and CEO.

“We are delighted to welcome Eeva Sipilä to Metso. With her extensive experience at a leading global industrial company, she will bring valuable insight and financial knowledge to Metso. Harri Nikunen will transition to a new role within the company, as part of normal successor planning and job rotation,” commented Matti Kähkönen.

Sipilä has been a member of Metso’s Board of Directors since 2012.

Edited from press release by Harleigh Hobbs

A four year partnership between Rio Tinto’s Bengalla mine, landholders, University of Newcastle, BDM Resources and Hunter Local Land Services led to trialling carbon management practices on Hunter Valley farmers’ lands.

Seventeen landholders implemented carbon management practices, such as rotational grazing and improved cropping techniques, as part of the project, and seeing more fertile soils with increased carbon storage. Results from their properties show an average increase in the amount of carbon stored in the top 30 cm of soil of close to 12%, or 7.6 t/ha.

Soil carbon is widely considered an important indicator of soil health, landscape resilience and productivity, while increased levels can help drought-proof properties.

Merriwa landholder Kim Fenley, who implemented the trial carbon management practices at his property, has noticed significant improvements in productivity.

He explained: “The difference between the lands I traditionally graze to the trial area is a two to three fold productivity increase due to the carbon practices put in place. The carbon practices included using rotational grazing to allow better use of the paddocks and using controlled improved grasses and crops to increase productivity while native grasses are allowed to come forward.

“Capturing carbon not only removes CO₂ from the atmosphere but it comes with benefits such as helping to manage the impact of drought on the land. Carbon in the soil means water holding potential and the ability to then see out a drought is increased, Fenley added. “We’ll continue on this process to look at what other people are doing. Everyone involved has a better understanding of soil carbon and the benefits of better management tools.”

District Coordinator for the Upper Hunter Local Land Services Steve Eccles commented: “The adoption of grazing rotations and innovative cropping as part of the carbon management practices during the project has resulted in an increase in carbon stored in the soils. This has led to increased ground cover and pasture production, with a reduction in weeds and land degradation issues.”

“Farmers implementing these practices have benefited from improved soil health and resilience of the properties to adverse weather such as dry conditions,” Eccles continued.

Bengalla General Manager Jo-Anne Scarini indicated she was proud of the partnership and said the project was “truly worthwhile” because of the positive results and benefits the landholders are seeing.

The project area included approximately 1100 ha. of Upper Hunter Valley land and resulted in an approximate 8400 t of additional soil carbon present in the project area.

Edited from press release by Harleigh Hobbs

Underground mine ground control specialists, Frank Calandra Inc. (Jennmar) and DSI, have signed a series of deals affecting their businesses in the US, Europe, Australia, Latin American and China.

Under the agreements, Jennmar will acquire DSI Mining’s manufacturing assets in the US, integrating its entire mining division into Jenmmar USA. DSI’s US tunneling business is not part of the agreement and will remain fully-owned by DSI.

DSI’s mining operations in the US includes locations in West Jordan, Utah, as well as Evansville, Indiana, Louisville, Kentucky, Cambridge, Ohio, and South Charleston and Martinsburg, West Virginia.

“DSI’s strong presence in western US hard rock mining will further strengthen Jennmar’s position in this segment of the market,” said Tony Calandra, Executive Vice President at Jennmar. “On the other side, its activities in coal mining will complement our existing strong footprint and close some gaps in our offering.”

Meanwhile, DSI is to acquire Jennmar’s operations in Europe, including Jennmar Spain, Jennmar Multitex in the Czech Republic and Jennmar Merol in Poland, as well as Jennmar Latin America and Jennmar Australia.

The close of all transactions is expected within 30 days with the exception of DSI’s acquisition of Jennmar Australia, which is subject to review by the Australian Competition Commission.

“Soft commodity prices and supply/demand imbalances represent important challenges to our customers in mining,” said Patrik Nolaker, Group CEO of DSI. “Through this acquisition, DSI will combine the strengths of two well-established market players, which will allow it to provide its customers a superior offering both from an efficiency and a product and service portfolio perspective.”

In addition, DSI will buy a 50% stake in Jennmar Asia (Jining), Jennmar’s Chinese business, creating another Rocbolt Technologies joint venture. Rocbolt Technologies (China) will join two other Rocbolt joint ventures in South Africa and Australia with Calandra and Nolaker “enthusiastic about the establishment of third Rocbolt joint venture.”

Edited by Jonathan Rowland.

A decision on whether or not to proceed with the construction of binderless coal briquetting (BCB) plant by River Energy Joint Venture at a major South African coal mine will be taken this quarter, according to River Energy’s majority shareholder, White Energy Co.

In its December quarterly update, White Energy said that the “parties have committed to reaching a decision on whether or not to proceed with this project during the current quarter and, if deciding to proceed, the necessary transaction documentation within the current quarter.”

Work on the study component of the project was completed in the December quarter including all test work at White Energy’s Cessnock production plant in Australia and a redefinition of the size, location and scope of the project into a package that appears to work for both parties.

The current preferred option would see River Energy construct a more independent facility, removed from the coal washplant operations on the coal producer’s mine site, with increased flexibility on feedstock and product offtake arrangements.

“While the key drivers for this project have not changed and both parties are working to achieve a positive outcome, it is clear that the current market conditions have not helped River Energy maintain the momentum in this project over the last 6 months,” White Energy concluded.

The BCB technology upgrades sub-bituminous coals through a thermal drying process followed by physical and chemical stabilization through a binderless briquetting process, White Energy says on its website. According to the company, it provides coal-fired power plants and other industrial applications with the “opportunity to burn a cleaner and more efficient coal.”

In addition to the South African project and its Cessnock BCB production plant in Australia, White Energy also owns a majority stake in a US thermal coal mine, Mountainside Coal Co., where it is planning to build a BCB plant with a final decision to proceed expected in the near future.

Edited by Jonathan Rowland.

Wollongong Coal has increased its resources at Wongawilli coal mine as the company prepares to recommence operations at the site in 2Q16. The “additional resources” will focus on commissioning the mine infrastructure to meet the target time frame for start of production.

The increased commitment to the mine comes after Wollongong appointed Delta SBD as mining contractor for the site to oversee and manage the restart of operations.

“The decision to resume operations triggered preparation plants for operational readiness,” the company said in its December 2015 quarterly report. “This included recommissioning production equipment and support infrastructure that was parked up during care and maintenance.”

In addition, the company succeeded in extending its environmental approval under Part 3A (Pt3A) of the New South Wales Environmental and Planning Act until 2020, allowing extraction of the remaining approved coal blocks in the Nebo and Eloura areas of the mine. The Pt3A approval was due to lapse at the end of 2015. All subsidiary environmental permits have also been obtained.

The company also said that it had installed and commissioned a real-time air and noise monitoring system at Wongawilli on 23 December 2015 to bring the mine into compliance with current requirements. The system will monitor noise, weather and PM2.5 and PM10 particles.

The company reported no coal production in 4Q15 following its decision to place its Russell Vale coal mine into care and maintenance in September last year. Sales from remaining stockpiles at Russell Vale totaled 22 347 t, while those from Wongawilli totaled 1149 t.

“Following the decision to place the Russell Vale Colliery on care and maintenance […] a programme of restructuring the operations has continued,” said the company. “A small care and maintenance team remains at the colliery to ensure protection of the asset and infrastructure including monitoring and maintenance of dewatering infrastructure and strata management activities as required.”

Edited by Jonathan Rowland.

Washington’s blizzard may have broken records, but conditions can plummet some 40°C lower at the Siberian coal mine where six Terex Trucks rigid haulers are working 24/7 to help keep Russia warm.

This is no place for weaklings. With temperatures dropping below -50°C in the winter, the conditions at the Apatsky opencast mine,1700 metres above sea level, are extremely punishing, not only for the workers, but for the equipment used there as well.

The mine is situated in the northern-most point of Zabaykalye Territory, in the Kalarsk region and is owned by Russia’s largest coal producer, SUEK. Coal power is one of the major sources of energy in Russia, which has among the largest coal reserves in the world, with this region hosting of the country’s biggest discovery.

SUEK, provides 41% of Russia’s power industry demand for coal fuel and now produces 600 000 tpa of coal at the Apsatsky mine.

Toughing it out round the clock

The six Terex Trucks TR 100 rigid haulers based at the mine operate 24 hr/day, 7 days a week, carrying out up to 100 runs a day. Their robust design sets them apart as the only haulers on the market capable of working efficiently in such extreme, unpredictable conditions.

“The TR100s work round the clock and have proved to be a good choice to suit our operating conditions perfectly,” said Oleg Likhodumov, deputy director of the Apatsky opencast mine. “They are reliable and easy to maintain. For stripping areas and coal mining, we also operate 38 t Terex Trucks articulated haulers, the TA400s.”

The cabin is equipped with safety guards for protection onsite, and feature air conditioning and heating systems to ensure a comfortable and productive operation in the extreme conditions.

The trucks have been in operation since 2012, after the construction of the access road to the mine. Even their journey to arrive at this remote location proved a logistical challenge. They were delivered to Siberia in semi-knocked down (SKD) form via St Petersburg in order to comply with the Russian Railways regulations. Once on site, it took two days to assemble and commission each truck before they were able to start providing their round the clock heavy-duty support.

Operator Maxim Shoizhalsanov, has driven Terex Trucks TR100s for over three years. “The big advantage of this machine is its hydraulic brakes,” he said. “They ensure dependable slowdown on steep slopes and are good on the ascents. A retarder in the gearbox is useful because it allows good slowdown on the descents.”

Service is carried out on site by Eurasia Machinery under a contract with the exclusive Russian Federation Terex Trucks dealer, Ferronordic machines, ensuring uptime averages in excess of 90% to maximise the customer’s production and to minimise the cost per tonne of coal.

Edited from press release by Harleigh Hobbs

The long-term future of coal as a major energy source is often portrayed as being at risk; however, the picture is more complex than that, according to a new report from the IEA Clean Coal Centre that looks at the effects of regulatory trends on coal-fired power plants and global coal demand.

“More stringent legislation for coal combustion means that in some parts of the world, notably the EU, coal-fired power providers must either construct state-of-the-art, advanced power plants, invest in retrofitting pollution control technologies for existing facilities or shut down plants altogether,” said the IEA Clean Coal Centre in a press statement on the release of the report.

Despite such measures and the latest commitment to reduce global greenhouse gas emissions at COP21 in Paris last year, thermal coal demand will continue to grow to 2040 led by China and India and – to a lesser extend – southeast Asian countries, the report, by Hermine Nalbandian-Sugden, concludes.

“By 2040, forecasts indicate that the share of coal in global primary energy will decline to 24% [from 30% in 2014]. But projections show that global coal demand will increase 15% by 2040, as total energy demand grows,” said the IEA Clean Coal Centre.

Yet this growth will vary greatly between regions. In OECD countries, coal demand is forecast to decline, particularly in the US where electricity generation from coal-fired power plant is expected to fall by about a third over the next decade. “This is due to increased regulation and competition from other fuels,” said the IEA Clean Coal Centre.

“Conversely, coal demand in developing countries is forecast to increse by about one third by 2040 with significant growth in southeast Asia, India, Africa and Brazil,” continued the IEA Clean Coal Centre. “Coal demand in China is expected to peak in 2030.”

The report, ‘New regulatory trends: effects on coal-fired power plants and coal demand’, is available for download from the IEA Clean Coal Centre Bookshop.

Edited by Jonathan Rowland.

Carbo One Ltd has joined the World Coal Association (WCA), the global network for the coal industry, as its newest corporate member.

Carbo One is one of the world’s largest coal trading companies and is the first pure coal-trader to acquire WCA membership, highlighting greater diversity in both membership growth and appeal.

The company has annual sales of approximately 47 million t and is the largest supplier of high-quality steam and PCI coal from Russia.

Benjamin Sporton, WCA CEO, welcomed Carbo One’s membership: “we are delighted to start 2016 with a strategic growth in our membership. WCA is committed to expanding our membership along the entire coal value chain. Carbo One is a very important coal trader in Russia and globally – reaching more than 40 countries worldwide.”

The majority of high-quality, multi-origin coal supplied by Carbo One comes from Russia, with some marginal tonnages from other countries. The company delivers coal through Vostochny port and Ust-Luga, the largest Russian coal terminals in the Far East and the Baltic, respectively. It supplies coal to power plants, steel mills, cement works, households and other consumers across more than 40 countries.

Alexey Danilov, Carbo One CEO, commented: “we consider the World Coal Association as the best platform to stress the positive role of coal in the world economy and address the misconceptions about coal. I believe that the coal business community is able to improve understanding of coal as the vital source of economic growth now and in the near future.”

Benjamin Sporton concluded: “Carbo One’s decision to join the WCA strengthens our presence in Russia and ensures that WCA deepens its engagement across all aspects of the world’s coal industry. Expanding our membership in the coal trading community supports the important work we do in representing the entire industry as the only global voice of coal, particularly in these challenging times.”

Edited from press release by Harleigh Hobbs

Sandvik Mining reported strong 4Q15 invoicing, despite uncertainty in the mining market. Invoiced sales rose 3% on the back of good growth in order intake for equipment during 1H15. Operating profit, however, was down 6% at SEK749 million.

“Positive development for mining equipment was reported in the fourth quarter – mainly in loading and hauling, as well as underground drill rigs – supporting total order intake [of SEK4.8 billion],” the company said.

Africa and the Middle East provided Sandvik Mining with its largest market, growing 2% and accounting for 28% – or SEK1.4 billion – of order intake in 4Q15. The largest growth in order intake was recorded in South America, however – up 39% y/y to SEK733 million. Order intake in Australia was also up slightly – by 1% to SEK736 million, while order intake was down in Europe (2%), North America (11%) and Asia (20%).

The quarter also saw Lars Engström appointed as President of Sandvik Mining, replacing Scot Smith, one of a series of new appointments to the company’s Group Executive Management following the arrival of Björn Rosengren as President and CEO of Sandvik Group in November.

Over the full year, Sandvik Mining reported growth in all of its key indicators: order intake, invoiced sales and operating profit. Order intake stood at SEK21.2 billion – up 1%; invoiced sales were SEK22.4 billion – up 1%; and operating profit of SEK2.6 billion – up 4%.

Meanwhile, adjusted operating profit – which takes out non-recurring charges of SEK86 million in 4Q15 and SEK626 million in 1Q15 – was up 33% at SEK3.3 billion.

Despite this, the company remained cautious: “The year 2015 was eventful, characterised by increasingly challenging market environment but also progress in our efforts to structurally improve operations,” said Rosengren. “Uncertainty persisted in the mining segment; however, order intake remained largely stable year-over-year, hampered by slightly softer demand in the aftermarket business.”

Edited by Jonathan Rowland.

FirstEnergy Corp. looks back on 2015 and reports its generation fleet provided customers with safe, reliable, clean and affordable energy in 2015, producing more than 88.9 million MWh of electricity at its nuclear, coal, natural gas, oil, wind and hydro facilities in Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.

“Our power plants produced the reliable electricity that powers our customers and communities in 2015, and we remain focused on delivering strong, dependable plant operations and enhancing our environmental performance for the future,” commented Jim Lash, president, FirstEnergy Generation.

FirstEnergy’s generation fleet was well-positioned for reliable service throughout periods of extreme weather in 2015. When a new peak electricity demand record was set in February 2015, the company’s fossil generating stations operated at more than 90% equivalent availability factor, a measure that reflects the amount of time a generating unit is available to produce electricity.

Additionally, the company made progress installing emissions reduction equipment at its coal-fired plants to meet the US Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) regulation. The Bay Shore and Sammis plants in Ohio and Pleasants and Harrison plants in West Virginia fully meet MATS regulations, and MATS projects will be completed at Fort Martin in West Virginia and Bruce Mansfield in Pennsylvania by April 2016. The company also closed its older, less efficient Lake Shore, Eastlake and Ashtabula coal-fired plants in Northeast Ohio in April 2015.

Edited from press release by Harleigh Hobbs

Toll Energy has made an extension to its contract with coalbed methane (CBM) company Arrow Energy to now include crane lift operations.

Toll has provided logistics support for Arrow Energy’s gas field exploration and development operations in Queensland’s Bowen Basin since 2014, including transport of CBM stores from international and domestic locations to warehouses in Dalby and Moranbah – manned and operated by Toll Energy – and the provision of water services for its sites.

Arrow Energy currently delivers almost 20% of Queensland’s gas supply from its five CBM fields across the state.

“There has been a significant downturn across the Australian resources sector, including the [CBM] industry. Major projects have progressed past the construction phase to the export phase, which has impacted requirements for logistics services,” explained Peter Runge, Toll Energy Supply Chain Manager for Queensland and New South Wales.

“The continuation – and extension – of our partnership with Arrow Energy demonstrates Toll’s strength, not only in the energy sector but also in the relationships we build with our customers, and that is definitely something we are proud of,” Runge detailed.

Edited from press release by Harleigh Hobbs

The US Chamber of Commerce has written to members of the US Senate, supporting the Energy Policy Modernization Act, which aims to update the law the governs US exports of natural gas.

“Recently, Congress took an important step in listing the 40 yr old ban on exporting oil,” wrote the Chamber. “However, the law that governs the export of natural gas is nearly 80 yr old and is equally as bad a fit for the current situation the country enjoys, being the world’s largest producer of natural gas.”

The bill would make the Department of Energy’s (DOE) application process for licenses to export natural gas more efficient, requiring the DOE to act on such applications within 45 days. “The application of a reasonable time limit to this review process would ensure that applicants are not forced to endure continued delays, while also maintaining requisite environmental reviews for such applications.”

US LNG exports are expected to begin soon from the Sabine Pass LNG project – although operator, Cheniere Energy recently delayed the first export shipment by a month to the end of this month or early March. The US coal industry is hoping that such exports might help to strengthen domestic gas prices, boosting coal’s competitiveness in the US energy mix.

Meanwhile, in a recent weekly commentary, the President and CEO of the US Chamber, Tom Donohue, has attacked the Obama Administration’s attacks on the coal industry.

“One can hardly claim to support an all-of-the-above energy strategy while continually working to keep coal, one of our most abundant and reliable resources, locked underground,” writes Donohue.

“But that’s exactly what the administration aims to do,” Donohue continues, arguing the regulations covering opencast mining, coal ash, cross-state emissions, regional haze and ozone “among other things”, are squeezing the life out of the coal industry.

“The president’s climate change agenda – a centerpiece of his legacy – hinges on coal’s demise,” concludes Donohue. “This is a flawed approach to achieveing carbon reduction goals that will only hurt our workers, our economy and our competitiveness.”

Edited by Jonathan Rowland.

To help advance carbon capture and storage (CCS) in Asia Pacific, the Global CCS Institute has introduced a CCS Fellowship Programme and selected its first Fellowship appointee, Dr Meredith Gibbs.

Gibbs is a prominent Australian environmental and climate change lawyer and a partner at HWL Ebsworth Lawyers in Melbourne.

Gibbs commented: “I am delighted and honoured to have been awarded the first Legal Fellowship with the Global CCS Institute.”

She said the Fellowship provided an opportunity to contribute to the global body of knowledge about the kind of legal frameworks that will foster and promote CCS as part of a low-carbon future.

“My research will identify the key features of an effective enforcement regime for the underground storage of carbon dioxide,” explained Gibbs. “This issue is important because the perception of an effective enforcement regime that ensures the permanent and safe storage of carbon dioxide will be crucial in increasing public and industry confidence in CCS as an important technology for a low-carbon future.”

According to Institute CEO, Brad Page, the CCS Fellowship Programme will be a valuable addition to the global research effort in key policy and legal areas.

“Pursuing the climate targets set in Paris will require a substantial shift in the way governments and businesses seek to decarbonise the world economy,” explained Page. “CCS is a vital technology for meeting the world’s targets for mitigating global warming at least cost – the very objective is simply impossible without CCS.”

“As a global organisation the Institute recognises that governments the world over need access to detailed, expert research and knowledge, especially in policy, legal and regulatory areas … The CCS Fellowship Programme is one part of the Institute’s commitment to developing greater knowledge in critical areas of study, to assist our Members, governments and corporations in making informed decisions about their own commitments to CCS.”

“As our Legal and Regulatory Indicator highlights, much more work needs to be done to ensure efficient legislation is in place to facilitate CCS deployment,” continued Page.

He concluded: “we are delighted to appoint Dr Gibbs as the Institute’s inaugural Legal Fellow, and we look forward to welcoming her extensive contribution to this important area of our work.”

Edited from press release by Harleigh Hobbs

ROM coal production at Universal’s Kangala coal mine was below the planned production target in 4Q15, the company said its latest quarterly report. Output at the mine was 766 522 t for the quarter as the company undertook pit reconfiguration work and pre-stripping to boost pit stability.

The pre-stripping work also allowed the company to expose more mining blocks, giving more flexibility to ramp up production should demand increase in the longer term.

“The reconfiguration-required changes in overburden bench design have resulted in additional overburden being stripped with a subsequent reduction in ROM coal production,” the company said. “The increased capacity of the loading equipment fleet remains onsite until ROM run rates are being consistently achieved.”

Despite this, ROM production at the mine was 12% than the previous quarter, while production for the six months to December 2015 is 34% up on the previous year at 1.5 million t.

The company’s domestic sales fell 9% in the quarter on the back of a brief suspension of supply to Eskom while Universal awaited revised contractual paperwork and intermittent ROM coal supply from Kangala. Domestic sales for 2H15, however, were still up 261% on the previous year at 952 000 t.

Meanwhile, export sales fell 52%, as the occurrence of the export-quality mid-seam coal is erratic in the current mining area of the pit. Export sales for 2H15 totaled 39 000 t – a 117% increase on 2014.

“Tough operating conditions were experienced during the December 2015 quarter at the Kangala colliery with focus placed on the pit reconfiguration and additional stripping activities required for the updated rock mechanical engineering requirements and difficult mining conditions” said Universal’s CEO, Tony Weber. “Through the converted effort of our mining contractor, we are making significant progress towards returning to steady state productions conditions, which are anticipated in the next month or so.”

More positively, Universal said that over ninety local residents had successfully trained to become qualified operators of heavy mining equipment as part of the company’s skills training programme. Forty of these have been appointed as articulated dump truck operators at Kangala with the mine intended to train 100 operators by the end of March 2016.

Edited by Jonathan Rowland.

As part of the preparation for its take-over of Universal Coal, Coal of Africa (CoAL) and Universal Coal have released updated mineral resources and ore reserves for their material assets: CoAL’s Makhado project and Greater Soutpansberg Project (GSP) and Vele coal mine and Universal’s Kangala coal mine and NCC, Brakfontein, Arnot South, Berenice Cynus and Somerville projects.

Under AIM Rules, CoAL’s acquisiton of Universal Coal constitutes a reverse takeover, requiring the company to release an admission document and seek shareholder approval for the acquisition in a general meeting. As part of the preparation of the admission document, independent competent persons reports were prepared the two company’s material projects, updating the company’s mineral resources and ore reserves from JORC 2004 to JORC 2012.

The two producing assets – CoAL’s Vele coal mine and Universal’s Kangala project – both reported falls in mineral resources and ore reserves due to depletion through production. Changes to pit slope design and angles to align with revised rock mechanical engineering requirements were also a factor at Kangala.

At CoAL’s Makhado project and GSP and Universal’s Berenice Cynus and Somerville projects, estimates were unchanged from previous announcements with measured, indicated and inferred mineral resources of 796 million t at Makhaso, 7.2 billion t at GSP and 1.4 billion t at Berenice Cynus, while Somerville reported an inferred open mineral resource of 274 million t.

Makhado also reported probable ore reserves of 188 million t (mineable t in situ). CoAL aims to start mining at Makhado in the second half of this year and has appointed DRA Group in December 2015 to undertake the optimisation study and FEED package for the infrastructure components of the project.

Proven ore reserves fell at both Universal’s NCC and Brakfontein projects – a reflection of the resources that are currently considered to have a reasonable prospect of economic extraction under the current low-price environment and taking into account trends likely to affect future coal supply and demand, the company said.

At NCC, proven ore reserves were estimated at 29.3 million t with a measured, indicated and inferred mineral resource of 130.4 million t. At Brakfontein, proven ore reserves stood at 9.1 million t with a measured, ndicated and inferred mineral resource of 75.8 million t.

The general meeting for CoAL shareholders to approve the acquisition will be held 3 March 2016 in London.

“We are pleased to publish the admission document today and notice of general meeting in relation to the offer for Universal, which has built a profitable thermal coal business that generates positive cash flows despite the current depressed coal price environment,” said Bernard Pryor, Chairman of CoAL. “The proposed transaction creates a platform that combines producing assets and near-term projects from Universal’s assets with Coal of Africa’s flagship medium-term coking coal development projects”

Edited by Jonathan Rowland.

Mining cost estimates for Aspire Mining’s Ovoot metallurgical coal project in Mongolia have been cut by 22% following a high-level review of the project to take into account current market conditions.

“The Ovoot cost estimates were initially completed for the 2012 Revised Pre-Feasibility Study when all cost inputs were derived during boom conditions,” the company said in its 4Q15 report.“The review was conducted to reflect the current market costs, which, over the last three years have seen significant cost deflation as a result of a number of factors including foreign exchange movements, labour rates and other input costs.”

The 22% decrease in mining costs confirms the expectation that Ovoot remains at the lower end of the global metallurgical coal cost curve on a FOR China basis, the company said.

The company also received the results of a geophysical survey conducted over the Ovoot tenements and surrounding areas by local Mongolian firm, AMO-Discover LLC. The survey identified two regions of interest that have been recommended for further surveying and drilling to the southwest and within existing exploration licenses.

“The results of the geophysical report are positive and confirm the substantial potential to increase the existing coal resources and reserves at Ovoot,” the company said.

The survey also identified areas of limited further exploration potential and the company is now in the process of relinquishing 17 000 ha. of tenement area, reducing its tenement position to about 25 000 ha.

Aspire Mining is the largest coal tenement holder in the Orkhon-Selenge Coal Basin in northern Mongolia. In addition to the Ovoot project, it also owns the Jilchigbulag Coal Project and Myngan Exploration Licence, as well as a 50% stake in the Ekhgoviin Chuluu Joint Venture, which owns the Nuurstei and Erdenebulag Coal Projects.

Through its Northern Railways subsidiary, the company is also developing rail infrastructure to connect its mining project to Mongolia’s existing rail network as part of a planned international trade corridor between Russia, Mongolia and China.

Edited by Jonathan Rowland.

Through the sale of San Juan Coal Company, Westmoreland Coal Co. has acquired the San Juan mine in Farmington, New Mexico, by its subsidiary Westmoreland San Juan LLC (WSJ) from BHP Billiton New Mexico, for a purchase price of approximately US$127 million, subject to post-closing adjustments.

WSJ assumed operations at the mine on 1 February 2016.

The acquisition of the San Juan mine, which is adjacent to a power plant, expands Westmoreland’s suite of mine mouth mining operations and provides additional coal resources of 148 million short t.

Concurrent with the mine acquisition, Westmoreland entered into a long-term coal supply agreement with the owners of the adjacent San Juan Generating Station (SJGS), requiring SJGS to purchase 100% of its coal from the San Juan mine, with tonnage and pricing adjusting quarterly through 2022.

“The addition of the San Juan mine further enhances our mine mouth business model, which has been fundamental in providing strong cash generation,” commented Kevin Paprzycki, Westmoreland’s CEO. “We look forward to building upon the solid partnership with the SJGS team in the years to come.”

PNM Resources established a new subsidiary, NM Capital Utility Corp., which assisted Westmoreland with the financing to complete the acquisition and helped finance a portion of the transaction. WSJ entered into a US$125 million structured loan with the subsidiary of PNM Resources. The loan is a US$125 million Senior Secured Non-Revolving Term Loan maturing 1 February 2021 and bears initial interest at a 7.25% rate plus LIBOR, which escalates over time.

According to PNM, this transaction secures its customer savings through the finalisation of the new coal supply and participant restructuring agreements for the SJGS. Combined savings from the agreements are estimated to reduce customer costs by more than US$300 million over six years, reducing bills by approximately 5%.

“We believe the San Juan transaction is an overwhelming success for Westmoreland, PNM Resources, and PNM’s customers,” said Paprzycki.

“Reaching this important milestone means that PNM can now move forward with its commitment to deliver these cost savings to our customers,” detailed Pat Vincent-Collawn, PNM Resources’ Chairman, President and CEO. “Collectively, the elements of the plan for SJGS will provide significant environmental benefits, while minimising the impact to PNM customer bills, as well as the impact to jobs and the New Mexico economy as a whole. Now that the new coal supply and participant restructuring agreements are finalised, we can begin to deliver those benefits to our customers.”

Edited from various sources by Harleigh Hobbs

Botswana-focused unconventional gas exploration company, Karoo Energy, has announced a loss of £81 006 for the six months to 31 October 2015. The largest hydrocarbon license-holder in Botswana, Karoo owns a portfolio of exploration licenses for coalbed methane (CBM) and shale gas in the Kalahari Karoo Basin of Botswana.

The company also announced the completion of its acquisition of the remaining 15% of Tamboran Botswana that its subsidiary, Equatorial Oil & Gas, did not already own for a total consideration of £400 000.

“We are pleased to have completed the acquisitions of the outstanding shares in Tamboran Botswana and to take full ownership of the licenses, which are highly prospective for hosting shale gas,” said Karoo’s CEO, Noel Lyons.

At the corporate level, the company appointed Alan Golding as a Non-Executive Director. Golding has been involved in multiple coal and CBM projects in Botswana and had worked with Karoo for some time before his appointment to the board.

Edited by Jonathan Rowland.

Minemax has released the latest version of its iGantt 5.1.0, an easy-to-use opencast and underground production scheduling tool.

This release incorporates a number of functionality enhancements based on customer feedback, improving efficiency and reporting capabilities for users.

Key iGantt 5.1.0 enhancements include automated surface radial precedence generation, advanced reporting, improvements to 3D visualisation and Gantt charts, and general bug fixes. In addition, resource levelling is now available for both 32-bit and 64-bit versions.

The manual creation of horizontal precedences on large benches can be time consuming and this is where iGantt 5.1.0 helps improve efficiency by using automated surface radial precedence generation. It is extremely easy to select a starting point in the 3D view and let iGantt generate precedences in one automated step.

iGantt 5.1.0 features improved reports which allow the user to determine minimum and maximum attribute values per time period, and are particularly useful for cut-off and cut-over grade analysis. The improved reports also enable the user to count activities and unique attribute values that match selected conditions, making advanced analysis and reporting processes even simpler.

Edited from press release by Harleigh Hobbs

Walter Energy Inc. has signed an asset purchase agreement with Seminole Coal Resources LLC, ERP Compliant Coke, LLC and ERP Environmental Fund, Inc. all related to ERP Compliant Fuels, LLC (ERP), an affiliate of Virginia Conservation Legacy Fund, Inc. (“VCLF), for its remaining US assets.

Under the terms of the agreement, Seminole will acquire substantially all of the Walter’s remaining US assets after giving effect to its previously-announced agreement with an entity owned by certain company senior lenders. It will acquire its West Virginia assets, including the Gauley Eagle and Maple properties, as well as Walter Coke and Taft in Alabama. As part of the acquisition, Seminole will assume liabilities related to the assets it is acquiring.

The company’s Canadian and UK subsidiaries assets are also excluded from the transaction.

“The asset sale agreements we have negotiated during Walter Energy’s restructuring process—first with members of our senior lender group and now with ERP and VCLF —together represent the best possible outcome for Walter Energy, its creditors, employees and other stakeholders under the very difficult circumstances we have faced in our industry,” commentedWalt Scheller, Chief Executive Officer. “Over the last several months, we have worked hard to build a path forward for our operations, while also ensuring the company’s environmental obligations are appropriately addressed to the highest standards. VCLF has established a strong track record in this area, and we are very pleased to be partnering with them in this transaction.”

The agreement was filed with the Bankruptcy Court for the Northern District of Alabama in connection with a proposed, court-approved sale process under section 363 of the Bankruptcy Code.

On 15 July 2015, Walter Energy and its US subsidiaries filed for relief under chapter 11 of the US Bankruptcy Code in the Bankruptcy Court for the Northern District of Alabama.

Edited from press release by Harleigh Hobbs

A team of researchers led by the Department of Energy (DOE) has discovered that rare earth elements (REEs) can be removed from two US coal byproduct materials through an ion-exchange process. This discovery has the potential to expand the US domestic resource base of these critical elements.

The findings were published in a peer-reviewed paper entitled A Study on Removal of Rare Earth Elements from US Coal Byproducts by Ion Exchange. The research indicated that removal of REEs through an ion-exchange process could offer significant cost and environmental advantages compared with extraction from conventional ores.

REEs have a number of important applications in the energy and technology sectors.

Producing REEs can be extremely challenging, as they are commonly produced from ores that are difficult to break down in order to extract the elements. This extraction can be energy intensive, requiring temperatures of over 500°F and exposure to concentrated acids. There are also emissions concerns.

A smaller portion of REE production, largely in China, involves a process known as “ion-exchange,” which rinses the ore at ambient temperature with a solution. The REEs in this type of ore are adsorbed onto a clay surface, and are removed into the solution. For two coal byproducts associated with a coal bed in Pennsylvania, REEs can be removed with an ammonium sulfate solution that is used commercially for REE recovery outside the US, according to this research.

These findings will appear in Metallurgical and Materials Transactions E, published by ASM International and The Minerals, Metals and Materials Society.

Edited from press release by Angharad Lock

Business Briefing

By REUTERS

February 1, 2016

Atrum Coal NL’s first 2016 update from its flagship JORC 1.57 billion t Groundhog anthracite project, located in British Columbia, Canada, indicates positive yield results from quality testing.

The company has received encouraging anthracite quality results from drilling at Groundhog’s Eastern Resource block. The Duke E seam, one of the primary target seams for the underground mines, designed in the Groundhog North mining complex, has returned significantly improved float sink yields averaging above 80% (compared to previous average yields of 60%), producing a premium 10% ash ultra-high grade anthracite. This has stimulated a further design of pits in the Eastern Block where these higher yields occur.

Robert Bell, Executive Chairman, commented: “As we gain a greater understanding of the Groundhog resource base, we increase the likelihood of designing mines with both reduced operating and capital costs. The delineation of the Duke E seam in the Eastern Resource block with much higher washing yields is an encouraging result, and is likely to strongly influence our mine planning and development scenarios.”

It is reported that this increase in yield will have a positive impact on the economics of the project, which will be reflected in the Groundhog’s pre-feasibility study.

“Taking the average yield of the Duke E from 60%, to above 80% could result in a significant reduction in the total cost of production as ROM coal volumes are significantly reduced to produce the same volume of premium product. Furthermore, the Duke E in the Eastern Resource block is shallowly emplaced, with average depths less than 150 m, and it is consistently >2 m thick – an ideal mining height underground,” detailed Bell.

“Moving the yield from 60% to 80% has potential to reduce the ex-mine cost by 20% – 25%, and the FOB cash cost by 10% –15% for our primary export product, a low ash, ultra-high grade anthracite, which is in short supply on global markets.”

The company is currently reworking a pre-feasibility study (PFS), which includes underground mines in the Discovery B and Duke E horizons, and low-cost highwall options in the Discovery B seam.

The improved float sink yields are being investigated and the coal quality database divided into zones of geological influence, termed the Eastern Resource block and the Western Resource block. The quality results have been sent to third party consultants to undertake wash plant simulations to predict primary and secondary yields from the designed washery.

Should these simulations return expected results of primary yields for the Duke E seam of between 75% and 80%, it has the potential to reduce the overall cost of production from the Duke E seam by 10% -15%. Furthermore, these yields come from the Duke E seam at average depths of under 150 m, which has the potential to significantly reduce the capital cost to access the Duke E seam underground.

The company has identified two suitable entries accessing the seam at depths of ~40m, significantly shallower than previously planned.

Edited from press release by Harleigh Hobbs

US coal miner, Alpha Natural Resources, which is currently in Chapter 11 bankruptcy, plans to close eight mines in West Virginia, according to WARN Act Notices issued to workers at the mines. The closure of the mines will result in the loss of 886 jobs at Alpha’s Marfork Coal Co., Elk Run Coal Co, and Maxxim Shared Services subsidiaries.

In the WARN Act Notice, the company blamed “current adverse market conditions” for the decision to close the mines, adding that the job losses were expected to take place on – or within two weeks of – 25 March and be permanent.

The WARN – or Worker Adjustment and Retraining Notification – Act was passed in 1988 and requires companies to give 60 days notice in advance of plant closures and mass layoffs covered under the act. Notices are provided to the affected workers or unions, the state dislocated worker unit and the appropriate unit of local government.

The mines affected are the Roundbottom Powellton, Hunter Peerless, Seng Creek Powellton, Brushy Eagle, Slip Ridge Cedar Creek, Horse Creek Eagle, Allen Powellton and Coon Cedar Grove. The Marfork and Chess processing plants will also close. The facilities are all located around the towns of Beckley, Whitesville, Madison and Sylvester in Raleigh and Boone counties in the south of the state.

The news will come as a further blow to a region that has been the hardest hit by the downturn in the US coal industry. According to recent US Energy Information Administration figures, coal production in Central Appalachia was 40% below its 2010 – 2014 average in 2015: the largest fall recorded among US coal basins and a result of its difficult mining geology and high operating costs. Meanwhile, prices for Central Appalachian coal fell 22%, following a 13% fall in 2014.

The EIA expects US coal production to total 900 million short t in 2015, 10% lower than 2014 and the lowest level since 1986 on the back of low domestic gas prices, weak international demand and an increase to environmental regulations.

Edited by Jonathan Rowland.

Production at Universal Coal’s NCC project in the Kriel District of Mpumalanga Province, South Africa, is all but ready to begin as the company awaits a coal supply agreement with state utility, Eskom, that will allow it to finalise the contracts for mining, coal handling and processing plant (CHPP), and discard handling operations.

The project is “awaiting coal supply agreement prior to onsite development activities with a view to starting production shortly thereafter,” the company said in its 4Q15 quarterly report. The company hopes to conclude the offtake agreement with Eskom in 1Q16.

“On the New Clydesdale Colliery, we are keen to begin commissioning activities ahead of first production, which remains subject to the conclusion of a coal supply agreement with Eskom,” said Universal’s CEO, Tony Weber. “We continue to engage with Eskom and hope to provide the market with an update in due course.”

In the meantime, Universal’s debt funding solution for the NCC development – which is again contingent on the final coal supply agreement – remains secured through Investec Bank. The debt funding will be used to cover contractor site establishment, boxcut development and infrastructure upgrades, including to the CHPP.

The company is also preparing to consolidate the mining rights for NCC with those it holds on the neighbouring Roodekop property, where fencing of the mining area was completed in 4Q16.

NCC will be the company’s second producing asset after the Kangala mine, also in the Witbank coalfield in Mpumalanga Province. Kangala produces 1.7 – 2 million tpy of thermal coal for South Africa’s domestic market.

Universal Coal is currently under a AUS$91 million take-over proposal from fellow South African coal miner, Coal of Africa (CoAL), which owns the Makhado metallurgical coal project. In a recent update, CoAL said it has received signed statements of intent to accept the offer from shareholders holding 40.1% of Universal’s’ share capital.

Edited by Jonathan Rowland.

The Haranchi thermal coal power plant, located in Minamisoma, Fukushima Prefecture, Japan, has recently received a 1200 t 45 m high continuous ship unloader (CSU) from Kaohsiung, Taiwan. The plant’s previous CSU was previously severly damaged in the March 2011 Tsunami.

BigLift Shipping’s Happy Buccaneer successfully transported the CSU from Kaohsiung, Taiwan, to Haramachi, Japan, and installed it at the Japanese power plant.

The project was executed in close cooperation with the engineering department of BigLift Shipping’s Japanese client IHI Transport Machinery Co. Ltd.

The CSU was loaded and discharged by Happy Buccaneer’s two 700 t Heavy Lift Mast cranes (1400 t in tandem), using two 24 m BigLift lifting beams in the lifting arrangement.

Challenges faced during this project included the high deckloads, the lifting height and required outreach of ship’s cranes necessary for the installation of the CSU.

Due to the construction of the CSU, very large forces were expected on the supports of the bucket wheel boom and the Ballast arm. Therefore, a detailed load spreading plan was made to lead the forces into Happy Buccaneer’s high-strength upper deck. During the voyage, the acceleration forces on the CSU were constantly monitored, using the OCTOPUS-On-board system, a state-of-the-art system that delivers real-time vessel monitoring and supports the vessel’s route planning, speed optimisation, heading and fuel consumption. All seafastenings were checked daily and were adjusted if and when required, thus further contributing to the safe and clean delivery of the cargo.

The vessel sailed from Kaohsiung on 12 January and arrived at Haramachi on 17 January. But due to bad weather conditions, which closed the port, the ship could not berth until 20 January. The company had the CSU successfully installed by 22 January.

During the installation of the CSU at the 2000 MW thermal coal-fired power plant, the CSU had to pass over the conveyor belt system on the berth. This operation required a lifting height of 40 m above the wharf and a crane outreach of 14.15 m from ship’s side. The shipping company reported this was not a problem for Happy Buccaneer with its 32 years of experience; it performed excellently in the project for Haramachi port.

Edited from press release by Harleigh Hobbs

Mark Adeosun, Douglas-Westwood

Douglas-Westwood (DW) forecasts total expenditure on global LNG facilities will reach US$ 241 billion between 2016 and 2020. This represents a 34% increase compared to the preceding five-year period. The significant increase in capital expenditure (CAPEX) on LNG facilities in recent years has been due to growth in the global economy, which has driven the demand for natural gas. This demand is a function of increased natural gas consumption through economic growth and fuel switching.

The growth in LNG demand is also being driven by the remoteness of many of the large reserves. Globally, many basins with relatively low extraction rates have matured. Consequently, exploration and production (E&P) companies have been forced to develop higher cost plays, notably deepwater, heavy oil and oil sands. Conversely, the gas market has enjoyed a period of booming production underpinned by the advent of shale gas in North America and coalbed methane (CBM) in Australia. This previously stranded gas can now be exploited via LNG and FLNG technology, having been aided by comparatively high gas prices in Asia.

There has however been a recent decline and with LNG spot prices lagging behind oil price movement, it will likely get worse before it gets better. Despite this, in the decades ahead, natural gas will play an increasing important role in meeting the world’s energy demand.

CBM outlook – Australia

Global LNG CAPEX has been dominated by Australasia and Asia in recent years; however, over the forecast period all regions are expected to experience positive growth, except for Australasia where the LNG construction boom looks to be coming to an end.

The construction boom was preceded by massive investments in large LNG projects, such as the Gorgon LNG, Ichthys LNG, GLNG LNG and Wheatstone LNG projects. Consequently, this has propelled the country into a new production phase, hereby making Australia the world’s largest country producer of LNG, over¬taking Qatar as the largest exporter by the end of the forecast period.

Globally, the largest proportion of the total expenditure will be attributed to liquefaction projects, which account for 66% of spend over the forecast period. Import facilities will constitute 21%, while spending on LNG carriers will represent 13% of total expenditure between 2016 and 2020.

Most regions are seeing declining natural gas production. However, the key exceptions to this are regions with un-conventionals. Only the US with shale gas and Australia with CBM have realised the positive effect of unconventional gas production.

Australia possesses a significant amount of CBM and offshore gas reserves that will feed highly anticipated liquefaction projects. However, export projects in the country have been plagued with cost escalations, which will cause inevitable delays.

The country is likely to increase its unconventional gas production over the forecast period, having increased CBM production from 112 bcm to 432 bcm between 2010 and 2015. Production will continue to rise in order to supply major export projects such as APLNG, QCLNG and GLNG.

CBM from Queensland’s Bowen and Surat basins will be transported to the GLNG facility to be used as feedstock for the LNG project. With more liquefaction facilities expected onstream in 2016 and 2017, Australia is likely to benefit from its regional position, supplying significant amounts of LNG to Asia. Given the relatively close proximity of Asia and Australia, it is likely that LNG traded between the two regions will be at a discounted rate due to lower logistical costs; therefore, the country is well placed to monetise its CBM reserves as LNG.

Conclusion

In the decades ahead, natural gas will continue to be a vital influence in answering Asian and European gas needs and will require liquefaction due to the remoteness of new large gas reserves. The demand for LNG will continue to grow in the long-term due to its widely applicable use as a fuel source for power generation, industry and commerce. The long-term potential of the LNG industry is evident as vast reserves of natural gas found in remote regions such as East Africa and the Arctic present considerable LNG opportunities for the future.

About the author: Mark Adeosun is a Researcher at Douglas-Westwood. Edited by Jonathan Rowland.

• Update adds comments from Matthew Boyle, CRU.

China’s largest coal miner, Shenhua, saw coal production fall 8.4% in 2015, according to its latest operational data released to the Hong Kong Stock Exchange. Coal sales fell by 17.9%, while coal imports collapsed by 97.1% to just 200 000 t – and nothing in December 2015.

As a result, with 1.2 million t of coal exports (down 25% on 2014), the company became net exporter of coal for the first time – a fact the IEEFA picked up in its analysis of Shenhua’s results.

“With Shenhua owning its own dedicated in-house rail and coal port infrastructure (in fact, the largest coal port in the world) and with the company reporting a significant net cash profit margin on its in-house coal production, there is scope now for an acceleration of coal exports from China in the face of continued declines in domestic demand,” wrote the IEEFA’s Tim Buckley.

Shenhua’s Huanghua Port handled 111.6 million t in 2015 – down 15.2% on 2014, while its coal dock at Tianjin handled 40.3 million t of coal (up 10.1%).

Its move away from coal imports also asks questions of its investment in the US$1 billion Watermark coal project in the Liverpool Plains region of New South Wales, Australia. That project includes the construction of a 10 million tpa opencast mine to be connected by rail to the coal export port at Newcastle.

“The company is still holding (for now) to its public commitment to […] the Watermark project,” said Buckley, “but it seems an empty pledge […] Shenhua is simply a company that no longer relies on imported coal. It doesn’t need a big new mine in Australia.”

Matthew Boyle of CRU, however, was more skeptical of the significance of the news. “I personally would not put too much weighting on the fact that Shenhua would appear to have become a net exporter in 2015. 1.2 million t of exports out of total coal sales of 370.5 Mt of coal sales is really insignificant in the grand scheme of things,” Boyle said in a emailed statement to World Coal.

Nor does Boyle believe it will mark a shift towards China becoming a net exporter of coal: “I do not believe China, as a total whole, will become a net exporter of coal out to 2020. You might find some coal producers could seek to export coal to the seaborne market, to counter a decrease in domestic demand. However, it is unlikely to eclipse the total of imports China is expected to take in 2016 through to 2020.

And as for Watermark: “We still have it potentially starting in 2020, although there is some risk production will begin in 2020, meaning it could be delayed by a couple of years. This is mainly due to protests by local residents delaying any ground-breaking,” said Boyle.

In its explanation of its falling sales, the company blamed “the adjustment of energy structure in China” – as well as the weather, noting a falling demand growth for power, faster growth in non-fossil-fuel energy sources and the fall in utilisation levels at thermal power plants due to a rapid increase in capacity.

Edited by Jonathan Rowland.

Wescoal Holdings’ flagship Elandspruit coal mine in Mpumalanga Province, South Africa, is now delivering its production target of 165 000 tpm ROM, according to the company’s latest market update. Mine development is also at an advanced phase and in line with the project plan and budget.

Recent fund raising initiatives raised Rand 52 million, which have been used to upgrade haulage roads and reduce the interaction between public road users and mine operational traffic at Elandspruit. Progress has also been made on upgrading and construction of water control systems.

Although the fund raising provided less than expected, it was “sufficient to initiate crucial de-risking and optimisation projects across the Wescoal Group,” said the company, as well as relieving pressure on the company’s cash flow.

Work on the Wescoal Processing Plant to implement cost-saving and debottlenecking projects is on track before the end of the current financial year, added the company. The plant is capable of producing a range of products for domestic use, export and South Africa’s state utility, Eskom.

At Intibane coal mine, site activity ramped up in the latter part of December 2015 after the issuing of a water use license. Targeted steady state production is 80 000 tpm ROM coal suitable for Eskom or low-grade domestic markets.

Progress was also made on acquiring resources contiguous to Wescoal’s Khanyisa coal mine that would extend the life of the mine by between three and four years.

Agreement has been reached with various counterparties and is subject to a number of conditions, as well as approval from the Department of Mineral Resources. Mining activities at Khanyisa is also subject to the granting of a water use license; application for this was made in February 2015.

Wescoal supplies Eskom, as well as other domestic and export markets. “Global oversupply and sentiment have has a negative impact on domestic and export price expectations,” the company said. “However, the weakening exchange rate will have a positive impact on the rand price of export coal going forward.”

Edited by Jonathan Rowland.

Eskom and Exxaro Resources had a 40 yr contract for the supply of coal to Arnot mine that ended on 31 December 2015. Due to high coal price and the mine supplying below the contractual requirement, Eskom did not renew the contract.

Eskom, following its standard tendering process, approached the open market in an effort to identify cost-efficient suppliers to provide coal to Arnot coal-fired power plant. The company has previously stated that this process would be completed in March 2016 and has all intentions of completing by this date. As such, the process has not yet been finalised and therefore no contract has been awarded.

Eskom’s Group Executive for Generation, Matshela Koko, said: “In order to ensure business continuity of Arnot, Eskom has responsibly sourced coal from seven interim suppliers. These interim suppliers will ensure security of coal supply pending the conclusion of the long-term contract. One of these suppliers is Optimum who has provided less than 15% of the coal delivered to Arnot in January. All interim suppliers deliver coal significantly below the previous Exxaro price – further demonstrating the correctness of Eskom’s decision to seek a new supplier.”

Koko added: “Eskom is in no way involved with transactions relating to the ownership of coal mines and is solely focused on procuring coal of the required quality to Eskom’s power plants, at the right time and at optimal cost. The company categorically states that it is moving away from ‘owning the bakery’ to just ‘buying the bread’. Eskom will therefore create market tension through an open and competitive enquiry process to source coal from any suitable supplier.”

He said Eskom is dismayed by accusations regarding any purchase of coal from Optimum due to an ownership change to Tegeta. Eskom further notes that there was no outcry when Eskom previously bought coal from Optimum when it was owned by Glencore nor were there any complaints on the ownership of any other coal supplier.

“These double-standards are unfair and Eskom is unapologetic about engaging with any supplier irrespective of ownership. As such, Eskom will fulfil its mandate and assess suppliers only on their ability to provide coal on negotiated terms and conditions irrespective of any perceived political connections,” Koko concluded.

Edited from press release by Harleigh Hobbs

Bharat Heavy Electricals Ltd (BHEL) has received an 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. This will be the first 800 MW supercritical se based power plant in the state.

Hon’ble Chief Minister of Tamil Nadu, Puratchi Thalaivi Selvi J. Jayalalithaa, handed over the Letter of Award (LOA) to Sh. Atul Sobti, CMD, BHEL, during the function held in Chennai on Friday 29 January 2016, followed by laying of the foundation stone for the project.

Valued at Rs 2 759 Crore, the main plant package contract for the 1 x 800 MW North Chennai Supercritical TPS Stage III, has been placed on BHEL by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO). The project is expected to be commissioned by August 2019.

BHEL’s scope of work in the current contract involves design, engineering, manufacture, supply, erection, commissioning and civil works for the main plant package.

The key equipment for the contract will be manufactured at BHEL’s Trichy, Haridwar, Bhopal, Ranipet, Hyderabad, Jhansi and Bangalore plants with the company’s power sector Southern Region to be responsible for civil works and erection and commissioning of the equipment.

North Chennai Supercritical TPS Stage III is located in Thiruvallur district of Tamil Nadu and power generated from this plant will help in fostering growth of the state and provide easy access to electricity for people in Tamil Nadu.

Edited from various sources by Harleigh Hobbs

Power plant developments

• Hollysys Automation Technologies wins a contract to provide its proprietary distributed control system for 2 x 1052 MW Ultra-Supercritical coal-fired power generating units to a Chinese power plant.
• GE won a deal to deliver 2.6 GW of power to two major power plants in China, supporting China’s commitment to efficiency and conservation. The company is also to upgrade generator and steam turbine assets to help Poland’s largest utility, PGE GiEK S.A., modernise its Turow power plant, resulting in a 45 MW output increase.
• Mozambique coal power developer, Ncondezi Energy, has signed a joint development agreement with Chinese company, Shanghai Electric Power.
• A consortium of investors, including Taekwang Power and Aowa Power, signed an investment agreement for the Nam Dinh 1 Build-Transfer-Operation thermal power plant in Ha Noi, Vietnam.

Coal exports

• China’s largest coal company, Shenhua, became a net exporter of coal in 2015 after its imports collapsed 97.1% to just 200 000 t.
• Coal exports through Richards Bay Coal Terminal were 4 million t up on 2014 as the port solidifies its stranglehold on South African coal exports.

A focus on coal-fired power across the globe

• According to a new report, the UK government’s intentions to close UK coal and nuclear power plants could leave the country with an electricity supply gap of up to 55% by 2025.
• India could remain dependent on coal for two thirds of its energy in 2025, despite growth in alternatives.
• According to a statement from Vietnam’s Prime Minister, the country is to stop new coal-fired power developments to focus on gas and renewables.

CCS – a focal point

• Carbon capture and storage has a crucial role to play in decarbonising the UK economy, according to an independent panel of experts.
• Aker Solutions has commenced a five-month test programme to capture carbon dioxide emissions from the municipality-operated waste-to-energy Klemetsrud plant in Oslo, Norway.

End of year results

• CNX Coal Resources LP has reported financial and operating results for the quarter ended 31 December 2015.
• Alliance Resource Partners reports its financial and operating results for the year ended 31 December 2015.
• Anglo American has reported its coal production results for the 4Q15, seeing increases in metallurgical production but declines in thermal.
• Coal production at Wesfarmers’ Curragh mine fell in 4Q15 on a planned mine shutdown to allow upgrade of the coal mine’s coal crushing facilities.
• North American rail company, Canadian Pacific, has reported record revenue of CAN$6.7 billion with coal revenues up 3%.
• Yancoal saw its production fall 9% in 2015 – but still managed to grow its sales volumes by 1%.
• Cockatoo Coal hit record coal sales from its Baralaba mine in 4Q15, despite the appointment of administrators in November.

Not to be missed …

• Canadian Pacific has released a report highlighting what it sees as the need for rail industry consolidation in North America.
• Rio Tinto is set to sell its Mount Pleasant thermal coal assets to MACH Energy Australia for US$224 million plus royalties.
• According to the latest reports from the US EIA, US coal production finished 2015 off approximately 13% from 2014 totals. Meanwhile spot prices for coal continue their long-term decline and natural gas slipped back slightly from recent highs.
• Oversupply and falling demand has reduced dry bulk freight rates to their lowest levels since the Dry Bulk Index started in 1981.