Caterpillar Resource Industries – which includes its mining equipment business – lost US$105 million in 4Q15 on the back of falling sales of both its new equipment and aftermarket parts. Sales were 23% down to US$1.84 billion compared to US$2.39 billion in 4Q15.
“Commodity prices remained weak and mining customers continued to focus on improving productivity in existing mines and reducing their total capital expenditures,” the company said in its 4Q15 earnings release. “As a result, sales and new orders in Resource Industries continue to be weak.”
Overall the company announced a 4Q15 loss of US$114 million compared with an operating profit of US$1.1 billion in 4Q14 on a further fall in sales and revenues. Sales and revenues totalled US$11 billion in 4Q15 compared to US$14.24 billion in 4Q14.
For the full year, sales and revenues were US$47 billion – US$3 billion under its own forecast, 15% lower than in 2014 and 29% lower then the 2012 peak. Profit for the year was US$2.1 billion down from US$3.7 billion in 2014.
“We anticipated about US$5 billion of the US$8 billion sales and revenues decline in our January 2015 outlook as we started the year,” said Caterpillar CEO, Doug Oberhelman. “Actual sales and revenues were about US$3 billion below that US$50 billion outlook because of steeper than expected declines in oil prices, a stronger US dollar, weaker construction equipment sales and lower than expected mining-related sales in Resource Industries.”
Caterpillar also said it didn’t expect things to improve in 2016 either with sales and revenues forecast to be in the range of US$40 – US$44 billion. Sales in Resources Industries are expected to fall again some 15 – 20% compared to 2015 on the back of continued weak commodity prices and resulting difficult financial conditions for Caterpillar’s mining customers.
Global workforce fell to about 105 700 at the end of 2015 compared with about 114 200 at the end of 2014.
Edited by Jonathan Rowland.
World Coal is a portal to added value information generated by Palladian Publications’ coal-sector magazine. With a unique industry insight via a combination of news, reviews, comments, analysis, reports, case studies, technical articles and more.
Construction at Coal of Africa’s (CoAL) Makhado metallurgical coal project will begin in 2H16, according to the company’s 4Q15 quarterly report. Construction is expected to last 26 months with a further four-month ramp up phase. Final production capacity of the mine will be 5.5 million tpy of saleable product.
In 4Q15, the company appointed DRA to undertake the optimisation study and FEED package, following DRA’s work on the Definitive Prefeasibility Study, completed in 2013. The work will include the infrastructure components of the project, as well as the integration of the work of a number of specialist consultants.
The Makhado project also received its Integrated Water Use License (IWUL) from the South African Department of Water and Sanitation during the quarter. “The award of the IWUL for Makhado further signifies the government’s commitment to the flagship project and its potential for socio-economic transformation,” the company said.
On the finance side, the company signed an MoU with Qingdaao Hengshun Zhongsheng Group (Hengshun) regarding a proposed equity investment in Baobab Mining and Exploration, a CoAL subsidiary that owns the mining right for the Makhado project. Hengshun has now begun due diligence on the Makhado project and has expressed an interest in acquiring an interest in the project and in providing facilitated debt.
“The MoU with Hengshun is an important milestone in the identification of a strategic investor for the development of the company’s flagship Makhado project,” said David Brown, CoAL’s CEO. “In addition the potential acquisition of Universal will transform the company into a mid-tier producer.”
In November 2015, CoAL agreed to acquire Universal Coal for AUS$91 million. Australian-listed Universal currently produces about 2.4 million tpy from its South African assets with a near-term production development pipeline that could boost output by a further 2 million tpy in 2016.
CoAL has received signed statements of intent to accept its offer for Univeral from shareholders representing 40.1% of its total issued share capital, including Coal Development Holdings, Universal’s second largest shareholder. A minimum of 50.1% acceptance of the offer is required for the acquisition to be committed.
Edited by Jonathan Rowland.
Consol Energy Inc. has released its 4Q15 results, stating a net income attributable to Consol Energy shareholders of US$30 million for the quarter, or US$0.13 per diluted share.
Earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortisation (EBITDA), attributable to Consol Energy shareholders was US$363 million for the 2015 fourth quarter.
After adjusting for certain unusual items, which are listed in the EBITDA reconciliation table, the company had an adjusted net loss in the 2015 fourth quarter of US$26 million, or US$0.11 per share. Adjusted EBITDA1 attributable to Consol Energy shareholders was US$206 million for the 2015 fourth quarter. Cash flow from operations in the just-ended quarter was US$102 million.
“Consol continues to control the controllables in a commodity price and energy environment that is unprecedented,” commented Nicholas J. DeIuliis, President and CEO. “Specifically, Consol continues to adapt to the challenging commodity environment by further driving down costs, illustrated by the E&P Division reducing total unit cash costs by over 25% year-over-year. For the Coal Division, Pennsylvania Operations (PA) set new levels of cost performance, and the Buchanan Mine, again, posted impressive total unit costs. In addition to the substantial cost performance, recently, we announced that we are exerting production discipline on both the E&P and Coal sides of our business. For E&P, specifically, we reduced our 2016 capital budget by an additional US$185 million, while scaling back production growth to approximately 15%, over 2015 volumes. For the Coal Division, we have also optimised production schedules to better align with customers’ delivery schedules to help manage high inventory levels, due to the lack of demand from a mild start to the winter. The company also continues to position itself to capitalise on what we believe to be an industry leading dry Utica acreage position and initial well results, as demonstrated by showcasing three of the top ten dry Utica wells across the industry, to-date.”
Edited from press release by Angharad Lock
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.”
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.
In December 2015, Aker Solutions signed a contract with the city government for a carbon capture and storage (CCS) project in Norway.
The company has now commenced a five-month test programme to capture carbon dioxide emissions from the municipality-operated waste-to-energy Klemetsrud plant in Oslo, Norway.
The project is funded by Gassnova, the state enterprise that supports the development and demonstration of technologies to capture carbon dioxide (CO2).
“This is pioneering work with significant potential as the world focuses on finding ways to limit carbon emissions,” commented Valborg Lundegaard, Head of Aker Solutions’ engineering business. “As such, this pilot project is of international importance.”
The test will be a key element in qualifying Aker Solutions’ amine-based CO2 capture technology for commercial application at waste-to-energy plants globally. There are about 450 such plants in operation in Europe and about 700 globally.
The test will be conducted using the company’s mobile test unit for carbon capture. The gas released from Klemetsrud contains about 10% CO2 and is treated in several steps before it enters the mobile unit. Klemetsrud, which gets a majority of its feedstock from biomass, emits about 300 000 tpy of CO2.
“We expect to capture up to 90% of the CO2,” said Oscar Graff, Head of CCS at Aker Solutions. “The tests will verify important operating parameters, such as energy consumption, solvent degradation, losses and required solvent make-up.”
Edited from press release by Harleigh Hobbs
Mozambique coal power developer, Ncondezi Energy, has signed a joint development agreement with Shanghai Electric Power (SEP) to develop the Ncondezi 300 MW coal-fired power plant in Tete Province.
SEP is listed on the Shanghai Stock Exchange with most of its shares held by State Power Investment Corp. (SPIC) – 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.
Under the JDA, SEP will invest up to US$25.5 million in a new holding company for the project, Ncondezi Power Co., in which it will hold a 60% stake. The Ncondezi coal mine will continue to be wholly owned by Ncondezi Energy and will be developed and financed separately.
As a result of the agreement and SEP’s expertise in coal-fired power generation, the project boiler technology will change from circulating fluidized bed to pulverized coal. SEP will also have effective control of the power project, leading the procurement of the EPC agreements, the O&M agreements and debt financing.
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.
Edited by Jonathan Rowland.
CNX Coal Resources LP has reported financial and operating results for the quarter ended 31 December 2015.
The company’s cash distribution was US$0.5125 per unit. Net income finished at US$8.7 million and distributable cash flow1 at US$9.8 million. Adjusted EBITDA came in at US$18.7 million.
CNXC saw coal sales of 1.0 million short t for 4Q15 and 2016 contracted sales position at 4.8 million short t.
“Overall, the fourth quarter was very challenging for CNXC, as an unusually warm start to winter and low natural gas prices reduced the demand for coal generation and resulted in significant inventory overbuild at coal plants. While we worked with our customers to manage the inventory levels, it impacted our fourth quarter shipments and plans for coal sales in the first quarter of 2016,” explained Jimmy Brock, CEO of CNX Coal Resources GP LLC. “Our operations team continues to manage through these challenging coal markets by making necessary adjustments at the mines to control costs and offset some of the pricing pressure.
“I am very pleased to report that during the fourth quarter of 2015, the company’s Bailey mine was awarded the 2015 Keystone Mine Safety Award for the second consecutive year in the longwall mine category. Furthermore, for the year ended December 31, 2015, recordable accidents and severity of incidents were reduced by 33% and 75%, respectively compared to the year earlier period at the Pennsylvania mining complex.”
“Adjusted EBITDA” and “Distributable Cash Flow” are non-GAAP financial measures, which are reconciled to GAAP net income and net cash provided by operating activities, under the caption “Non-GAAP Financial Measures.”
For its 20% undivided interest in the Pennsylvania mining complex, CNXC sold 1.0 million short t of coal during the 4Q15. Total production declined to 0.9 million short t compared to 1.3 million short t produced in 4Q14 as CNXC aligned production with market conditions.
The company’s total unit costs for coal sold in the quarter were US$39.84/short t, compared to US$42.77/short t in the year-earlier quarter. The improved cost performance was driven by reduced expenses related to the Pennsylvania streams subsidence, partially offset by lower production due to inconsistent shipment schedules.
CNXC ‘s guidance for coal sales in 2016 is 4.4-5.2 million short t, Adjusted EBITDA of US$57 – US$67 million and maintenance capital expenditures of US$24.5 – US$27.5 million.
Edited from press release by Harleigh Hobbs
Alliance Resource Partners, L.P. has reported financial and operating results for the year ended 31 December 2015.
Revenues for 2015 decreased to US$2.27 billion, a decline of 1.2% compared to 2014, due to a 3.5% decrease in coal sales prices, which offset record coal sales volumes. Lower revenues and the net US$77.6 million impact in 2015 of non-cash items led to reduced EBITDA of US$670.0 million – a decrease of 16.7% compared to the previous year.
Coal sales revenues in the 2015 Year declined as a result of lower coal prices partially offset by increased coal sales volumes at the Tunnel Ridge and Gibson South mines in addition to coal sales volumes from ARLP’s recent acquisition of the Hamilton mine No. 1.
The company set new records in the 2015 Year for both short t sold, which increased 1.3% to 40.2 million short t, and short t produced, which rose 1.1% to 41.2 million short t, both as compared to 2014.
ARLP’s other sales and operating revenue increased US$16.0 million in 2015 primarily due to White Oak’s start-up of longwall production in late October 2014 and the resulting increase in Alliance’s opencast facility services and coal royalties prior to the White Oak Acquisition.
ARLP’s results for the 4Q15 were also lower compared to same quarter last year. Total revenues declined 8.2% to US$542.2 million, compared to 4Q14, as coal sales fell due to lower coal sales prices and reduced sales tons reflecting customer deferrals of scheduled coal shipments and, as anticipated, the decrease of other sales and operating revenues following ARLP’s acquisition of the remaining equity interests in White Oak Resources LLC and the assumption of operating control of the White Oak Mine No. 1 on 31 July 2015.
Lower revenues and the US$66.9 million net impact of non-cash items reduced net income and EBITDA in 4Q15 compared to the 4Q14, as net income decreased 82.6% to US$21.5 million, or US$(0.19) per basic and diluted limited partner unit, and EBITDA decreased 40.8% to US$120.0 million.
“During 2015, ARLP maintained its position as a leader in the coal industry. Our operations and marketing teams produced and sold record volumes leading ARLP to deliver profits and solid cash flows in what was arguably one of the most challenging years in the history of our industry,” said Joseph W. Craft III, President and Chief Executive Officer. “Faced with weak power demand, persistently low natural gas prices, ongoing regulatory pressures and an oversupplied coal market, we were able to achieve these results relying on ARLP’s long-term sales agreements and our ability to reduce operating expenses and capital expenditures. In response to lower demand and unsustainably low spot coal pricing, we adjusted ARLP’s operating portfolio and shuttered certain higher-cost operations, which led to non-cash impairments that reduced our financial results for the 2015 quarter and year.”
Edited from press release by Harleigh Hobbs
Arch Coal Inc., one of the world’s top coal producers for the global steel and power generation industries, has set new records in safety and environmental performance in 2015, surpassing the company’s previous best-in-class performance.
Arch’s total incident rate was 0.99 incidents per 200 000 hr worked – a 10% improvement over 2014 – ranking Arch first among its diversified industry peers.The company also achieved its best year on record for Surface Mining Control and Reclamation Act (SMCRA) compliance, posting a 50% improvement versus 2014.
“The Arch team has once again raised the bar to a new level of superior operating performance,” commented John W. Eaves, Arch’s Chairman and CEO. “These impressive accomplishments and remarkable track record reflect the collective effort of the entire Arch Coal workforce, and we applaud our employees for their unrelenting commitment to our core values and to continuous improvement each year.”
Arch’s Appalachian operations in West Virginia recently earned 14 prestigious safety and environmental awards, including the state’s top honours for mine reclamation and underground and opencast mine safety.
The West Virginia Division of Environmental Protection (DEP) presented Wolf Run Mining’s Sentinel complex with the 2015 Greenlands Awards for most outstanding overall performance and achievement in reclamation – the eleventh Greenlands Award presented to an Arch subsidiary since 2001.
The West Virginia DEP also presented six statewide environmental awards to four Arch subsidiaries. Mingo Logan’s Left Fork opencast mine was recognised for innovative material placement and Coal-Mac’s Phoenix No. 4 mine received statewide praise for its forestry reclamation. Coal Mac’s Loggy Branch opencast mine and Vindex Energy’s preparation plant were honoured for demonstrating exemplary performance in reclamation of an opencast operation in the southern and northern areas, respectively. The idled Upshur properties earned West Virginia Reclamation Awards for outstanding coal refuse reclamation and construction techniques.
Additionally, Coal-Mac’s Phoenix No. 4 opencast mine was selected for the 2015 West Virginia Good Neighbor Award for its exceptional performance in community outreach and good neighbor practices. This marks Coal-Mac’s third consecutive year to be selected for the Good Neighbor Award.
Arch subsidiaries also acquired six West Virginia safety awards. Coal-Mac’s Holden 22 mine earned the 2015 Bart B. Lay, Jr. Milestones of Safety Award for achieving the best safety performance among West Virginia surface coal mines in 2015. Tygart Valley’s Leer mine earned the 2015 Eustace E. Frederick Milestones of Safety Award for achieving the best safety performance among underground coal mines in West Virginia.
Three other Arch subsidiary operations and facilities achieved West Virginia Mountaineer Guardian Awards for exemplary safety records achieved during calendar year 2015: Beckley’s Pocahontas mine; Mingo Logan’s Mountain Laurel Mountaineer II mine and Cardinal preparation plant; and Coal-Mac’s Ragland loadout.
“These significant statewide awards recognise the professionalism, leadership and dedication of the men and women across our West Virginia operations,” detailed Paul A. Lang, Arch’s President and Chief Operating Officer. “Year after year, our employees demonstrate what can be achieved when we focus on the values that form the foundation of our company. We’re proud to set the standard in safety performance and environmental care in the region.”
Edited from press release by Harleigh Hobbs
Coal will remain the dominant fuel in India’s power mix, according to a recent research note from BMI Research. Despite growth in alternative energy sources, such as nuclear and renewables, coal will still contribute 66% of India’s power generation in 2025.
“India is facing growing pressure to reduce its emissions profile and diversify its coal-heavy power mix to incorporate cleaner sources,” said BMI Research. “However, Prime Minister Narendra Modi has openly voiced his reluctance to jeapardise economic growth by reducing the use of low-cost power sources – in this case, coal.”
That government support has seen the development of a strong project pipeline for coal-fired power facilities, which now account for over 60% of the total power project pipeline in India, according to BMI Research’s Key Projects Database. This strength in new coal plant development will help to lock-in India’s demand for coal, supporting BMI Research’s bullish outlook.
Coal use in India is also supported by increasing supply from booming domestic production – BMI Research expects domestic production to hit 935 million t by 2019 from 753 million t in 2016 – and the availability of cheap coal on the Asian seaborne market.
BMI Research forecasts the Newcastle benchmark to trade in the US$40 – 60 per tonne range to 2020, compared to US$140 per tonne in 2011 and US$78 per tonne from 2012 – 2015.
The boom in supply comes in stark contrast to mid-2014 when a record number of Indian power plants reported stock levels below four days of supply – causing widespread power shortages. Few plants now report such low stocks with the amount of coal stored at Indian power plants at a record high.
“We believe coal will maintain its position as the primary choice in the country’s power mix – owing to its availability and relative low cost against alternative fuels,” BMI Research concludes.
Edited by Jonathan Rowland.
Three separate groups have files petitions to stay the implementation of the Clean Power Plan with the US Supreme Court while it is under judicial review. The groups – representing US states, utilities and trade associations – ask the Supreme Court to put the plan on hold after the lower court currently reviewing the plan, the US Court of Appeals for the DC Circuit, refused to.
“Without Supreme Court intervention, West Viginia and other states will suffer irreparable harm as job creators and state agencies spend untold resources to comply with a rule that is likely to be struck down as illegal,” said West Virginia Attorney General, Patrick Morrisey, who is heading the states’ bid with his Texan counterpart, Ken Paxton.
The US Chamber of Commerce, joined by 15 other trade associations representing the manufacturing, oil and gas, coal, iron and steel, brick and cement industries, among others, filed a similar motion to stay “before the […] unprecedented rule can cause more harm to the business community.”
“The impact of this rule on the economy cannot be overstated,” said Karen Harbert, President and CEO of the US Chamber of Commerce’s Institute for 21st Century Energy. “The rule causes many businesses in the electricity sector and beyond to radically restructure or even close their doors, setting off a domino effect in local communities across the country.”
The stay applications were filed with Chief Justice of the Supreme Court, John Roberts, who handles emergency legal matter from the DC Circuit. He may decide the matter himself or take the matter to the full court, according to SCOUSblog. The administration and EPA will now have the option of answering the stay application before the Chief Justice or full court acts.
Edited by Jonathan Rowland.
Carbon capture and storage (CCS) has a “crucial role to play in cost-effective decarbonisation” of the UK economy, according to the Committee on Climate Change (CCC), an independent body that advises the UK government on emissions targets.
Writing to the UK’s Secretary of State for Energy and Climate Change, Amber Rudd, the CCC noted last year’s decision to cancel £1 billion of funding for the UK’s CCS commercialisation programme, saying that the decision “must not and does not exclude CCS permanently from playing a significant role in reducing UK emissions.”
“Without rapid development of an effective approach to deliver CCS, much larger and more costly actions will have to be taken in sectors such as transport, building and agriculture to prepare for the 2050 target in the Climate Change Act,” the CCC said. The 2050 target commits the UK to reducing its emissions by at least 80% in 2050 from 1990 levels.
Commenting on the CCC letter, Professor Stuart Hazeldine, Director of the Scottish CCS (SCCS) and Professor of CCS at the University of Edinburgh, was, however, critical of the UK government’s climate credientials, saying the UK needed to “do a lot more” on UK electricity and a lot more on UK low-carbon industry.”
“But this government is doing a lot less,” continued Hazeldine. “There is no sign yet that facts, unbiased scientific evidence and rationality are regarded as more important than lobbying by corporations and colleagues wishing to take the UK back to the 1960s energy mix. It’s a choice between spending £40 per household in 2016 or spending £200 per household each year from 2050.”
According to SCCS, by delaying CCS development for at least a decade, the UK will not only make meeting its carbon targets harder and more expensive, it will also lose the chance to benefit commercially from its position of leadership on CCS technology development, as well as to utilise the skills and infrastructure currently available in the North Sea oil and gas industry.
Edited by Jonathan Rowland.
METS Ignited the new Mining Equipment, Technology and Services (METS) Growth Centre and CRC ORE (Cooperative Research Centre for Optimising Resource Extraction) have signed a memorandum of understanding (MoU) that details a work plan to engage the Australian METS sector with the activities of CRC ORE.
The companies are working together to encourage opportunities and greater collaboration and commercialisation for the Australian METS sector.
The MoU was signed by respective chairs of METS Ignited and CRC ORE on the MoU on 22 January 2016 at Old Government House at the Queensland University of Technology (QUT) Garden Point Campus in Brisbane.
Joint activities planned for 2016 include a roadshow to highlight CRC ORE’s research, collaboration on an innovation portal to help connect industry and an active role for METS Ignited on CRC ORE’s Implementation Council. There are also activities planned to make the capital markets more aware of the METS sector.
Elizabeth Lewis-Gray, Chair of METS Ignited, said that METS Ignited is looking forward to working with CRC ORE and sees the agreement as an obvious collaboration to strengthen the mining innovation ecosystem.
“The AUS$90B Australian METS sector has diverse competitive strengths and innovative solutions to improve productive and sustainable mining. By working together we can create greater opportunities for METS companies,” said Ms Lewis-Gray.
“Our relationship with CRC ORE will assist Australian METS companies gain scale and credibility through the global reputation and reach of CRC ORE with miners. We will better connect the Australian METS sector and researchers with mining companies to ensure all parties are aware of each other’s activities and plans. This will improve collaboration and commercialisation outcomes,” she said.
CRC ORE Chair Jonathan Loraine stated that CRC ORE’s work in the areas of productivity improvement and sustainability is highly relevant in the current commercial environment. CRC ORE is at the forefront of mining innovation to improve the productivity of minerals resource extraction. Major areas of focus for CRC ORE will be the deployment of Grade Engineering ® to exploit natural ore heterogeneity, sensor based “whole of stream” integration and the development and application of innovative methods to improve and optimise “whole of stream” productivity.
“It receives very strong support from the Mining, Research and METS sectors. The MoU with METS Ignited will enable the parties to work together to secure the maximum engagement of Australia’s innovative METS companies in the activities of CRC ORE,” Loraine said.
He concluded: “through our partnership with METS Ignited, SME METS companies with relevant technology can potentially participate in CRC ORE.”
Edited from press release by Harleigh Hobbs
Gekko Systems has appointed four new members of staff to its Canadian and South African global offices as the company continues to strengthen its delivery of customer support, sales and services around the world.
Gekko’s Co-Founder and Managing Director, Elizabeth Lewis-Gray, commented: “The quality and commitment of our global office leaders and staff is critical to deliver world-class mineral processing services and plants. We are delighted to welcome these appointees.”
Gerhard Bezuidenhout will join Gekko’s Johannesburg global office as Regional Manager, Sales and Operations for the African region.
Bezuidenhout has an extensive career in mining development, minerals processing and project and operations management, throughout various countries.
Bezuidenhout stated: “Africa has been a large market for Gekko’s equipment and services. My aim is to continue the high level of service Gekko delivers to its clients as well as expanding the company’s footprint to more countries in the African continent. Gekko’s equipment allows room for diverse applications which is an excellent fit for the African market.”
Mxolisi Ntombela, a well-qualified Chemical Engineer, joined Gekko in October last year as a Technical Process Engineer based in the Johannesburg global office.
Ntombela will focus on undertaking and overseeing a large portion of the process design work for Gekko’s African clients, which was previously performed by engineers at Gekko’s head office in Ballarat.
John Fourie joined Gekko as a Technical Services Engineer. According to the company, this new role was created to provide additional technical support to service clients in the region, as well as to meet the demands of Gekko’s expanding performance consulting division in Africa.
Greg Rasmussen has been appointed Gekko’s VP Sales and Operations – North America, based in Gekko’s Canadian office in Vancouver.
Rasmussen brings 30 yr experience in the Canadian minerals processing operations, including business development and operations management for Glencore Technologies.
“Client feedback indicates that Gekko’s Vancouver office is delivering a high level of technology and support to clients in North America. My focus is to continue this commitment as well as developing new relationships with mining companies in the region.” Rasmussen said.
Edited from press release by Harleigh Hobbs
Alpha Natural Resources congratulates the outstanding safety performance of eleven affiliate operations in West Virginia that were honoured for safety achievements in 2015 by the West Virginia Office of Miners’ Health Safety and Training.
The eleven Alpha affiliates received the Mountaineer Guardian Safety Award, presented to selected mines and mining-related entities that meet strict safety performance criteria.
The award recognises organisations with fatality-free operations, superior internal safety programmes, cooperative teaming with authorities and minimal safety violations.
“These are outstanding achievements by our miners,” said Allen Dupree, Alpha’s Senior Vice President of Running Right and Safety. “In light of the difficult market conditions that continue to face our industry, these mining professionals have demonstrated tremendous focus and attention – not only to their own safety, but the safety of their fellow employees.”
The following operations in West Virginia received the 2015 Mountaineer Guardian award:
Underground operations
Surface operations
Preparation plants and loadouts
Two of the Alpha-affiliated award recipients are multiple winners of the Mountaineer Guardian Safety Award. The Litwar Processing plant has won the honour five of the last six years and the Lower War Eagle mine has received the award for the last three years in a row.
The West Virginia Office of Miners’ Health, Safety and Training and the West Virginia Coal Association co-sponsor the awards to promote safety in West Virginia coal mines and facilities.
Edited from press release by Harleigh Hobbs
Canadian Pacific reported a slight increase in its coal revenues of CAN$18 million in 2015 to CAN$639 million, despite a fall of CAN$9 million in 4Q15. Canadian grain shipments were its highest earner, bringing in CAN$1.7 billion of revenue for the company over the calendar year – a rise of CAN$80 million (8%).
Coal carloads were also up by 10 – from 323 in 2014 to 323 in 2015, although revenue per carload did fall slightly from CAN$1985 in 2014 to CAN$1978 in 2015. Other big earners for the company included chemicals and plastics, domestic intermodal shipments, and metals, minerals and consumer products.
Overall, the company reported record revenue of CAN$6.7 billion with adjusted and reported operating ratios of 61% and 60% respectively – another record for the company.
“Despite challenging economic conditions and lower commodity prices, we continue to focus on what we can control – lowering costs, creating efficiencies and improving service,” said CP CEO, Hunter Harrison. “While the North American economy braces itself for more headwinds, we remain optimistic about the future and CP’s continued growth”
Edited by Jonathan Rowland.
Coal production at Wesfarmers’ Curragh mine was hit by a planned mine shutdown during 4Q15. Overburden removal fell 32.1% on the previous quarter, while coal production fell 25.5% to 2.47 million t.
The planned shut down was scheduled to allow a power upgrade related to a required overhaul of coal crushing facilities, according to the company’s quarterly statement of production, development and exploration.
Production comprised 1.62 million t of metallurgical coal, a fall of 31.7% on the previous quarter, and 850 000 t of thermal coal, a drop of 9.7% on the back of lower opening inventories relative to metallurgical coal and lower contracted coal delivery requirements to Stanwell coal-fired power plant.
For 2015 as a whole, metallurgical coal production was down 9.5% to 8.47 million t, while thermal coal fell 4.1% to 3.44 million t.
At Bengalla, Wesfarmers share of production for 4Q15 was 866 000 t, up 6.4% on the previous quarter due to operating a more productive section of the mining sequence. For the full year, Wesfarmers’ share of production decreased by 2.9% to 3.33 million t.
Edited by Jonathan Rowland.
Vietnam’s Prime Minister, Nguyen Tan Dung, has announced plans to drop coal from the country’s future energy plans. If confirmed, the plans would effectively shelve the equivalent of 70 large coal-fired power plants in the country. It would also be a set back for those in the coal industry hoping southeast Asian demand would compensate for flagging consumption in other parts of the region – notably, China.
According to RenewEconomy, a website that tracks clean energy and news, Prime Minister Nguyan Tan Dung said in a statement that “there is a need to closely monitor environmental issues, especially in stringent monitoring of coal-fired power plants; to review development plan of all coal-fired power plants and halt any new coal power development.”
Vietnam has the biggest pipeline of new coal-fired power development in southeast Asia with 44 GW in planned capacity on top of 17 GW under construction, according to Greenpeace. Some of these projects will not be converted to gas, while measures will also be put in place to create a better investment environment for wind and solar.
“Vietnam’s decision is the Paris Agreement in action,” said Arif Fiyanto, Greenpeace Southeast Asia Coal Campaigner. “With a clear steer towards renewable energy, it sets a benchmark for countries across the region to follow.”
Long an exporter of coal, Vietnam recently became a coal importer on the back of new coal-fired power developments. In November, Platts reported that Vinacomin, Vietnam’s state-owned coal company, planned to import 1.5 – 2 million t of coal in 2016 from about 0.5 million t in 2015. Vinacomin’s imports were then expected to grow to 10 million t by 2020, accounting for about half of Vietnam’s coal imports.
Vietnam import 5.045 million t in the first ten months of 2015, according to Platts, more than double the amount from the year before with most coming from Indonesia, China and Australia.
Edited by Jonathan Rowland.
In line with helping meet the growing high-efficiency power needs in northern and central China, GE has announced two deals under contracts with Huaneng Power International (HPI) and China Power International Development Limited (CPI International) for the supply of two steam turbine generator units respectively at Taihang power plant and Dabieshan power plant phase II project.
The units will produce new electricity that will be able to provide the equivalent power needed to supply about 1 million homes in the region.
GE will deliver two ultra-supercritical steam turbines coupled with two turbo generators to Taihang power plant that will each produce 660 MW of power. Located in North China’s Shanxi Province, the 1320 MW of new electricity will meet the energy needs of Beijing, Tianjin and Hebei areas and boost economic development in the region. The units are scheduled for delivery by the end of 2017.
GE also will deliver two 660 MW ultra-supercritical steam turbines generators units to Dabieshan power plant phase II project. As one of the backbone power providers in China’s Hubei Province, the project will help satisfy the ever increasing local power needs and further enhance the reliability of local power grid. The units are scheduled for delivery by mid-2017.
“We are honored to be awarded with these important contracts. These deals demonstrate the confidence and trust bestowed upon GE by our major Chinese customers, Huaneng Power International and CPI International. With the winning of these projects, we further strengthen GE’s position and footprint in China’s STG market. As China has made energy efficiency and conservation a priority in its development strategy, we are well positioned and pleased to contribute to this strategy with our best-in-class technology and expertise,” said Martin Boller, General Manager of Rotating Equipment, GE Power.
These deals build on GE’s long-standing relationship with HPI and CPI. It has a long-term cooperative relationship with HPI that dates back more than a decade and includes supplying steam turbines and generators for Pingliang II power and tower boilers for Luoyuan power plant. CPI International and GE have also previously partnered on many important energy projects in China. In 2008, GE successfully provided equipment to the first phase of Dabieshan power plant with excellent performance.
Edited from press release by Harleigh Hobbs
Anglo American’s export metallurgical coal production saw an increase of 11% to 5.5 million t due to strong operational performances at both Grasstree and Moranbah, as well as the delivery of development coal from Grosvenor. According to the company, this more than offset the effect of Peace River Coal being placed on care and maintenance in December 2014.
However, there was a decline in Australian export thermal coal production by 38% to 1.2 million t as a result of expected lower production from Drayton as the mine nears the end of its life. In addition, a favourable mix at Dawson led to an increase in higher value metallurgical coal production.
Export thermal coal production in South Africa also reduced by 19% to 3.9 million t. This is reported to be driven by strikes (which had a 0.6 million t impact), the planned closure of a section at Goedehoop and the transition to new reserves at Mafube.
Eskom production decreased by 26% to 5.5 million t predominantly due to reduced demand from Eskom, as well as safety stoppages impacting the New Denmark mine in November.
In Colombia, Cerrejón’s production decreased by 12% to 2.6 million t, due to the impact of severe dry weather and the suspension of operations due to dust emission levels, which had an impact on production of ~1 million t in the year.
Edited from press release by Harleigh Hobbs
RungePincockMinarco (RPM) has launched its latest version of HAULSIM, delivering unparalleled benefits and features to users around the globe. As the leaders in mine haulage simulation solutions, RPM attributes much of the development of HAULSIM 2.0 to ongoing consultation and feedback received from their global user base.
“The feedback we were receiving was positive but our customers wanted more. As leaders in mining simulation solutions, we took that feedback and worked with our customers to deliver HAULSIM 2.0 – a supercharged version offering best-in-class simulation features for complete optimisation of mine haulage fleets.” said Product Manager, Adam Price.
HAULSIM 2.0 simplifies haulage simulation with improvements to its innovative 3D user interface, featuring in-built pivot grid reporting and the ability to add, remove and edit roads and locations directly in the 3D scene. Additional improvements to the user interface include enhancements to the navigator, now with extra validation steps to help guide users through the model construction process.
This version also includes improvements in functionality with the ability to reassign trucks, depending on the stoppage event. With complete enterprise enablement, users also have access to model repository functionality to manage version control and multiple scenario models through RPM’s Enterprise Planning Framework.
“The sky is the limit for simulating mine haulage. Users can control uncertainty, optimise outcomes and reduce operating expenditure more easily than ever before. Our recent case study series reported significant savings on capital expenditure for our clients using HAULSIM which is simple to use and easy to learn” said Price.
Edited by Jonathan Rowland.
Motion Metrics’ technology, PortaMetrics™, is designed to analyse blasting results in opencast mines and quarries.
With its portable capabilities, PortaMetrics provides detailed rock fragmentation analysis of a desired scene in seconds. With much worldwide interest in underground applications, this November the PortaMetrics team headed to an underground mine in British Columbia to put the system to test.
PortaMetrics has not been trialled underground due to lack of lighting. The device does not incorporate its own lighting system and given poor lighting conditions underground, shadows have the potential to reduce accuracy. In the underground trial, portable LED flood lights are frequently used to light the underground tunnels. The same lights were used to test the system. Spaced several metres apart with the PortaMetrics device placed between the two, the tablet was able to capture a clear image, report accurate fragmentation results and remain unaffected by shadows.
The team found the LED lights proved successful in combination with the device and feel the results were very promising.
Going forward, the PortaMetrics team is working diligently to address specific underground concerns, including ensuring the device is water tight (as underground mines are often humid and damp), ensuring the device is intrinsically safe and adheres to underground explosive safety guidelines to ensure the device will not cause ignition and incorporating greater battery longevity.
Edited from press release by Harleigh Hobbs
Rio Tinto has reached a binding agreement for the sale of its Mount Pleasant thermal coal assets to MACH Energy Australia Pty Ltd for US$224 million plus royalties.
Mount Pleasant is a large-scale, thermal coal asset located in the Hunter Valley of New South Wales, Australia, with total marketable reserves of 474 million t.
This agreement includes a payment on completion of US$83 million, two unconditional deferred payments of US$58 million each payable 8 and 16 months from completion, a conditional payment of US$25 million, and royalties, payable quarterly at two per cent of Gross FOB Revenue for coal sold from the first 625 million t of ROM coal when prices exceed US$72.50/t.
Jean-Sébastien Jacques, Rio Tinto Copper & Coal CEO, commented: “these agreements for over US$800 million in asset sales deliver significant value for our shareholders, with the potential for future royalties from Mount Pleasant. We believe Mount Pleasant can have a very positive future under its new owners with different priorities for development and capital allocation.”
The proceeds of the sale will be used for general corporate purposes. As of 30 June 2015, the project had gross assets valued at US$144 million and no profits.
With the recently announced binding agreement for the sale of Rio’s interest in the neighbouring Bengalla coal Joint Venture, this amounts to US$830 million of agreed sales. The company now announced or completed US$4.7 billion of divestments since January 2013.
The sale is subject to certain conditions precedent being met, including completion of the restructure of Coal & Allied and regulatory approvals, and is expected to close in the second quarter of 2016.
Edited from press release by Harleigh Hobbs
GE’s Power Services business has secured orders valued approximately at €40 million with PGE Gornictwo i Energetyka Konwencjonalna S.A. (PGE GiEK S.A.), the largest utility in Poland, to upgrade generator and steam turbine assets at the Turow coal-fired power plant.
“We are happy to once again work with GE in modernising the Turow power plant to increase the power output of our power generation assets,” said Slawomir Zawada, President of PGE GiEK S.A. “This project is extremely important for the power complex in Turow, as well as for the local community: a lifetime extension, by 150 000 hr, of key equipment will allow us to utilise deposits of lignite from the Turow mine and simultaneously will help to secure current employment.”
The upgrades will commence with the shutdown of the first unit in April 2017 and the commissioning of the last unit is scheduled for January 2020.
Under the terms of the agreement, GE will upgrade three 50WT20H-100 generators and three 13CK230 steam turbines to extend equipment lifetime by at least 150 000 hours – about 20 years – and increase the availability of the turbosets to 97% in the first year of operation and above 98% in the next year. The upgrade is expected to increase power output by 45 MW – the equivalent to power approximately 130 000 polish households ¬– and improve power plant efficiency by approximately 1.4%.
The upgrade of the generator rotors and the manufacturing of new rods will take place in GE’s generator factory in Wroclaw, Poland. The steam turbine upgrade includes the delivery of new HP, IP and LP turbine inner modules, which will be manufactured in GE’s turbine factory in Elblag, Poland.
“GE has a very collaborative relationship with PGE GiEK S.A. and recently provided wind turbines for both the Karwice Wind Farm and the Lotnisko Wind Farm. We are pleased that PGE Gornictwo i Energetyka Konwencjonalna S.A. again has chosen to work with our GE team to support the needs of our communities here in Poland. Through this project we are able to participate in the developing of a diversified mix of energy sources of the Polish energy sector,” commented Beata Stelmach, President of GE in Poland.
Edited from press release by Harleigh Hobbs
Changing the status quo in the North American rail industry is necessary to support the continued growth of the North American economy, according to a report released by Canadian rail operators, Canadian Pacific (CP) ealier this month.
According to CP, which is currently pursuing a takeover of US rival, Norfolk Southern, continued growth in the US economy is dependent on North American rail service meeting current and future demand: “The question of how to create additional capacity to accommodate growth is a critical one. Adding infrastructure and building more track have become increasingly difficult, if not impossible.”
“The solution lies in adding capacity without adding infrastructure, increasing the efficiency of the overall network and addressing critical issues, such as congestion in Chicago,” CP continued in the report, ‘A 21st Railroad for a 21st Century Economy’. “CP believes that industry consolidated offers the best opportunity to improve efficiency [creating] much needed incremental capacity without adding infrastructure.”
Norfolk Southern rejected CP’s latest offer on 23 December, calling it “grossly inadequate” while creating “substantial regulatory risks and uncertainties that are highly unlikely to be overcome” – a reference to the fact that any merger would need to be approved by the US Surface Transportation Board (STB).
In rebutting these competition concerns, the report argues that a merger between CP and Norfolk Southern would “not reduce rail competition as out two networks are end-to-end (they do not overlap).” It also said that it was willing to adopt “competitive enhancements” as suggested by shippers.
CP also said that it believed a merger with Norfolk Southern would not spur further industry consolidation – a key consideration for the STB in approving any combination of Class 1 railroads.
“Serious consideration must be given to this innovative option if the industry and economy is to grow and prosper,” concluded CP in the report. “Ironically, some have voiced concerns that consolidation will lead to service disruption. The fact is, merger-related disruptions are not inevitable […] without industry consolidation, however, future service disruptions are a certainty.”
Edited by Jonathan Rowland.
The Association for Mineral Exploration British Columbia (AME BC) is calling on the Provincial Government for action following a new report highlighting the shrinking land base available for the exploration of hidden and valuable minerals in British Columbia, as well as the increasingly complex government policies that exploration companies are forced to navigate.
The report, Framing the Future of Mineral Exploration in British Columbia, prepared by environmental consultant firm, Hemmera, indicates a lack of clarity in land access and use rules as well as the overlapping nature of government regulations. It finds land access for mineral exploration has decreased in British Columbia, reaching a critical threshold threatening the survival of the industry and by extension, the jobs, families and communities that rely on it.
Without ongoing exploration there can be no new discoveries, and without new discoveries, the future of the industry will be limited. As a result, thousands of jobs and hundreds of millions of dollars in annual economic impact could be put at risk.
AME BC believe government action would help strengthen communities, and create a better future for British Columbia’s mineral exploration and development industry and the jobs and families that rely on it.
“Mineral explorers and developers have a proud history of finding critical metals, like copper, and building British Columbia over the past 150 years,” explained Gavin C. Dirom, President and CEO of AME BC. “The innovative and always evolving exploration industry forms an important R&D function, designing and using technologies and developing expertise that results in not only finding new mineral deposits, but also expanding the world’s geological knowledge base for everyone’s benefit.”
AME BC indicated that if not addressed, this situation could be devastating for the more than 30 000 British Columbians employed by mineral exploration and development and the many communities around the province that rely on it.
“Despite a perception that only a small percentage of land is designated as off limits to mineral exploration, the reality is that more than half the province is severely constrained to the industry due to layers of restrictive and sometimes redundant regulations,” added Dirom. “We believe that it is possible to have both a strong and active mineral exploration and development industry and a sustainable, healthy environment.”
AME BC is calling on government to address the situation, including streamlining and clarifying land use regulations and plans, as well as developing a modern decision making process. These changes need to recognise the hidden nature and value of mineral resources compared with surface level natural resource activities and ensure these different values are taken fully into account in land use decisions.
“In order to thrive in British Columbia, the mineral exploration and development industry requires access to land to discover hidden and valuable mineral resources and certainty to develop those resources should a deposit be found,” said Greg Dawson, a Geologist Conducting Exploration in British Columbia. “These two principles of access and certainty should be integrated into all government land planning processes.”
Dry bulk freight rates as measured by the Baltic Dry Index have been on a consistent downward trend since August 2015, hitting a record low in the third week of January, according to a Macquarie Research note, as supply continues to grow (albeit at moderating rates), while demand has suffered a significant decline.
According to BIMCO, there was 30 million DWT sent for scrap in 2015 – a relatively low level given the excessive supply on the market. “This illustrates that the pool of ready-to-break ships is not vast,” said Peter Sand, Chief Shipping Analyst at BIMCO. “Even a modest improvement in the freight rates causes demolition to halt.”
Net fleet growth will rise again this year, noted Macquarie, with scrapping rates continuing to be challenged by the youth of the fleet by shipping standards. BIMCO forecasts 40 million DWT will be sold for demotion in 2016, making it the busiest year on record for shipbreaking – but still not enough to bring down supply, which will grow by 50 million DWT.
On the demand side, combined volumes for iron ore, thermal coal and metallurgical coal – which make up 60% of the bulk trade – fell by 1% and Macquarie expects them to continue to the downward trend over the next five years.
“Structurally, there is no positive story in these markets from a seaborne demand angle,” said Macquarie. “In iron ore and metallurgical coal, we see global pig iron as having peaked due to no steel demand growth and an increase in scrap usage in China. In thermal coal, we think consumption has more or less peaked, while seaborne trade has been additionally cut substantially by Chinese protectionism and India being able to supply more of the coal needs domestically.”
BIMCO is similarly pessimistic: “A new record of shipbreaking volumes in 2016 could limit fleet growth to just 10 million DWT so in fact ‘all we need’ is an increase in transported volumes to around 60 million t to balance out the inflow,” concluded Sand. “As little as this may seem, growing from a base of 4700 million t – It can prove to be a high bar to jump before we start eating into the significant oversupply of ships.”
Written by Jonathan Rowland.
The Coal Utilization Research Council (CURC) has appointed Shannon Angielski as its new Executive Director of the coalition.
Angielski has been with the coalition since 2001 and will replace Ben Yamagata, who retired from the organisation at the end of 2015, after establishing the coalition over 17 years ago.
Yamagata stated: “with Shannon as Executive Director, I am confident that CURC’s profile as the country’s only coal technology advocacy organization and leading voice for coal will be elevated.”
Commenting on her new position, Angielski, said: “I am excited to serve our members in this new capacity. This is a pivotal moment for coal-based electric generation, and I look forward to both the challenge and the opportunity. I am confident we can build on the progress CURC has made under Ben’s leadership, and I plan to work with the coalition to drive further action on a broad 21st Century Coal Program that pursues technology solutions to enable cost-competitive, low carbon coal generation options in the future and will preserve the reliability and affordability of coal-based electricity generation.”
Angielski’s representation of CURC has included the design and advocacy of federal programmes, including policies to deploy new technologies, leading efforts with CURC and EPRI in the development of several Advanced Coal Technology Roadmaps that prioritise technology development needs, and successfully advocating for federal budgets to support initiatives demonstrating advanced coal and carbon capture and sequestration solutions.
“Shannon is a well-respected voice in Washington,” said 2016 CURC Co-Chair Deck Slone of Arch Coal. “There is no doubt that in her new role she will combine her intricate understanding of effective advocacy with her deep understanding of clean coal technology to build on the progress CURC has made in previous years. CURC is pleased to appoint her as our new Executive Director.”
Fellow Co-Chair Barbara Walz of Tri-State Generation & Transmission added: “as we look to the future of coal generation in this country, Shannon will be a great asset as we navigate the role that technology must play to enable the coal option, particularly given the complexity of the energy landscape we must operate in today.”
A Principal of Governmental Issues at Van Ness Feldman LLP, Angielski served as Associate Director of CURC for 15 years. She is a past President and member of the Board of the Washington Coal Club and serves as an advisor to the Secretary of Energy as a member of the National Coal Council.
“Shannon has been an integral voice in CURC at a critical time facing the industry,” said outgoing CURC Co-Chair Mark McCullough of American Electric Power. “She is the natural choice to take the reins, and her proven expertise and leadership will serve the coalition well.”
Edited from press release by Harleigh Hobbs
The US Court of Appeals for the 11th Circuit denied a challenge brought by two separate groups representing the coal industry to the final rule Lowering Miners’ Exposure to Respirable Coal Mine Dust, Including Continuous Personal Dust Monitors.
The court denied the petitioners’ challenge of MSHA’s authority to issue the rule under the Federal Mine Safety and Health Act of 1977.
Joseph A. Main, Assistant Secretary of Labor for Mine Safety and Health, issued a statement: “This is indeed a good day for coal miners. For years, MSHA worked hard to craft a balanced rule that would allow miners to stay healthy and businesses to continue to operate. We listened closely to industry concerns throughout this process and, ultimately, finalised a regulation that fulfilled the promise Congress made in the Coal Act of 1969 – to reduce dust levels and prevent miners from getting black lung disease.”
“We know that black lung is not a disease of the past. Since 1969, black lung has caused or contributed to the deaths of 76 000 coal miners, and since the late 1990s, the percentage of miners identified with black lung has increased from 5 to 10% among long-tenured workers.”
“When the final rule went into effect in August 2014, some critics insisted that mines would be unable to comply with the requirements. That assumption has been proved incorrect. According to sampling results, industry compliance is at 99%. As we prepare for Phase II of the rule to begin on 1 February, I am increasingly hopeful that we can eradicate black lung once and for all.”
Edited from press release by Harleigh Hobbs
According to a new report, Engineering the UK Electricity Gap, by the Institution of Mechanical Engineers, the UK Government’s plan to shut down all coal-fired power plants by 2025 combined with retiring the majority of its nuclear fleet could could create a 40 – 55% electricity supply gap by 2025.
The report explains that plans to close the gap by building Combined Cycle Gas Turbine (CCGT) plants are unrealistic, as the UK would need to build about 30 new CCGT plants in less than 10 years. The UK has built just four CCGTs in the last 10 years, closed one and eight other power plants. Additionally, in 2005 twenty nuclear sites were listed for decommissioning, leaving a significant gap to be filled.
The report has highlighted the country has neither time, the resources nor enough people with the right skills to build this many gas-fired or nuclear power plants in time. It is already too late for any other nuclear reactors to be planned and built by the coal ‘shut-off’ target of 2025, other than Hinkley Point C.
Dr Jenifer Baxter, Head of Energy and Environment at the Institution of Mechanical Engineers, and Lead Author of the report stated: “The UK is facing an electricity supply crisis. As the UK population rises and with the greater use of electricity use in transport and heating it looks almost certain that electricity demand is going to rise. However with little or no focus on reducing electricity demand, the retirement of the majority of the country’s ageing nuclear fleet, recent proposals to phase out coal-fired power by 2025 and the cut in renewable energy subsidies, the UK is on course to produce even less electricity than it does at the moment.”
The report also highlights that a greater reliance on interconnectors to import electricity from Europe and Scandinavia is likely to increase electricity costs and lead to less energy security.
Baxter continued: “currently there are insufficient incentives for companies to invest in any sort of electricity infrastructure or innovation and worryingly even the Government’s own energy calculator does not allow for the scenarios that new energy policy points towards. Under current policy, it is almost impossible for UK electricity demand to be met by 2025.”
“Government needs to take urgent action to work with industry to create a clear pathway with timeframes and milestones for new electricity infrastructure to be built including fossil fuel plants, nuclear power, energy storage and combined heat and power. With carbon capture and sotrage (CCS) now out of the picture in the UK, new low carbon innovations must be supported over the course of the next 10 years.
Baxter concluded: “we need to ensure we have the right skills and knowledge in place to enable this key infrastructure to be built. The UK Infrastructure Commission must also take urgent action to prioritise greater energy efficiency by industry and clarify financial incentives for research and development of renewables, energy storage and combined heat and power.”
The Engineering the UK Electricity Gap report’s recommendations include:
Exports at South Africa’s Richards Bay Coal Terminal (RBCT) hit a record 75.4 million t in 2015, according to IHS, an increase of 4% on 2014. Yet the country’s total coal exports are unlikely to rise significantly with non-RBCT shipments dropping by at least half since 2014.
“Despite this record growth in export tonnage of thermal coal through RBCT, it is not a sign that South Africa is likely to see significant growth of coal exports in 2016,” said Andrew Well, Managing Editor at IHS Energy. “With South African coal prices languishing at neat seven-year lows, competitor export terminals […] will struggle to regain market share in 2016.”
The dominance of RBCT over South Africa’s coal exports is also hitting junior miners, which have to sell their product to RBCT shareholders to gain access to the port, which is the cheapest route to export.
“Even though more competitive transport and handling charges have been introduced by other port operators […] the reduction in mining margins due to the 27% decline in coal prices in the past 12 months means that the exporters want to shave every cent they can from transport and logistics costs,” Wells added.
This means that smaller export terminals – including Richards Bay Dry Bulk Terminal (DBT) – are unlikely to have significant success in expanding their throughput. DBT is currently thought to be shipping about half of its nameplate capacity of 3 million tpa – despite plans to expand to 4 million tpa in 2016.
RBCT’s growth comes on the back of improved rail performance by Transnet Rail Freight, as well as strong demand from India for South African coal. About 36 million t of South African coal was shipped through RBCT in 2015 from 30 million t in 2014.
A decision by the Indian government to raise its ash specifications on imported coal has boosted demand for South Africa’s high-ash thermal coal at the expense of Indonesian producers, which cut their coal exports by 50 million t in 2015, according to IHS.
Indian coal imports are however expected to fall 10% in the 2016 – 2017 financial year, meaning RBCT’s continued strength will depend on whether South Africa’s coal exports can continue to outperform those from Indonesia.
Edited by Jonathan Rowland.
Cockatoo Coal’s Baralaba mine continued to ramp up production in 4Q15 with the introduction of a second large excavator fleet in November, despite the appointment of administrators. Coal sales totalled 462 681 t for the quarter compared to 112 491 t in 4Q14.
Operations at the mine will continue as the administrators investigate available options – including a restructure proposal from an existing shareholder or the sale of the mine – so as to maintain cash flow and preserve its value.
The company did however revise its mine plan to focus on the highest-quality low volatile PCI coal. In addition, it commenced productivity and utilisation improvement initiatives and began backfilling the Baralaba Central Void to reduce financial assurance commitments.
The deadline for submitting an interest in buying the mine is 29 January. The shareholder’s restructuring plan will also be submitted by that date with the aim of substantially progression a preferred option by the next creditors meeting on 8 March.
The company also said that the approvals timeline for the Baralaba Expansion Project remains on track for the scheduled increase in production from 1 million tpa to 3.5 million tpa.
On 15 December, the Queensland Land Court recommended that the Queensland Department of Environment and Heritage Protection approve the company’s Environmental Authority (EA) amendment application. The amended EA application would allow Cockatoo to boost production at Baralaba to its 3.5 million tpa target and begin mining activities on mining lease area, MLA80201.
Development work on Stage 2 of the Baralaba Expansion Project continued in 4Q15 with construction of the new train load out facility more than 98% complete at the end of the quarter.
Other exploration and development work continues in care and maintenance mode with the exception of the Dingo West exploration programme, which is being managed with Japan Oil, Gas and Metals National Corp. (JOGMEC).
Edited by Jonathan Rowland.
Cockatoo Coal hit record coal sales from its Baralaba mine in 4Q15, despite the appointment of administrators in November.
Yancoal saw its production fall 9% in 2015 – but still managed to grow its sales volumes by 1%.
Alvaro Garcia-Tunon is appointed to Board of Directors following Marsha Mishler’s decision to step down, and Gregory Ledford retires from the board.
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.
Australian rail freight operators, Aurizon, has extended its relationship with long-term customer Syntech Resources.
The Queensland Resources Council has written to Queensland Premier Annastacia Palaszczuk seeking a meeting to discuss ways the government can support the state’s resources sector.
Tomas Eliasson has been appointed Executive Vice President and CFO of Sandvik.
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.
Hollysys Automation Technologies wins contract to provide its proprietary distributed control system for 2 x 1052 MW Ultra-Supercritical coal-fired power generating units.
A round-up of some of this week’s key news items from the international coal industry, from outlooks on the US government implementing a halt on coal leases to an innovative concept to deploy CCS in the Europe.
Australian rail freight operator, Aurizon, reported a fall in coal volumes in 4Q15 on the back of increased competition and falling production volumes.
The US Chamber of Commerce’s Institute for 21st Century Energy criticises the US Environmental Protection Agency’s Clean Power Plan in a new report that analyses the regulation’s subjectivity and fairness.
South32’s coal production fell in the six months to December 2015 on the back of challenging geology at two of its Australian mines.
Bulk materials handling specialists, Flexco and Transmin, have signed a global project partnership agreement, formalising a long history of collaboration.
Capstone Turbine Corp. has announced that it received an additional follow-on order for a large Australian CBM company.
TerraSource Global has announced the addition of a new warehousing facility in Russia.
Allison Transmission Holdings Inc. has announced recent changes to its Board of Directors.
Alvaro Garcia-Tunon has been appointed to its Board of Directors, effective immediately, following Marsha Mishler’s decision to step down as a director.
Garcia-Tunon will serve as a Class II director with a term expiring at the 2017 Annual Meeting of Stockholders and will also serve as a member of the Board’s Audit Committee.
Garcia-Tunon served as Chief Financial Officer of Wabtec Corporation, a leading supplier of technology-based products and services for rail, transit and other global industries, from March 2003 until his retirement from the Company in 2013.
“We are pleased to welcome Alvaro as a new member of our Board of Directors,” commented Lawrence E. Dewey, Chairman of the Board of Directors. “Consistent with our ongoing efforts to review and strengthen the composition of our Board, the Board’s Nominating and Corporate Governance Committee conducted a thorough process with recommendations from multiple sources, including stockholders and an independent executive search firm. Alvaro is an exceptional addition to our Board and his financial and capital allocation expertise, experience as a public company director and business perspectives will be of great value to Allison.”
Commenting on Ledford and Mishler changes, Dewey added: “Greg has served as a distinguished member of our Board for the past nine years and has provided exceptional leadership and valuable insights that contributed to Allison’s growth and success. We also appreciate Marsha’s contributions to the Board and her insights, particularly those relating to the dynamics in the Off-Highway energy end markets. We are grateful to both Greg and Marsha for their service and commitment to Allison and wish them all the best as we facilitate an orderly transition and add a different set of skills and background to the Board.”
Additionally, Gregory Ledford will retire from the Allison Board when his current term expires at the 2016 Annual Meeting of Stockholders.
The Board’s Nominating and Corporate Governance Committee, with the assistance of a leading executive search firm, has initiated a search to identify a new independent director candidate with industrial operational expertise and executive experience to succeed Ledford.
Edited from press release by Harleigh Hobbs
