February 5, 2015


Test Cases for Banks – Four Dodgy Coal Deals to Watch This Year 

“Will the trend for rising coal finance extended by commercial banks – which we identified in our Banking on Coal 2014 report back in October – turn around any time soon, in line with now increasingly emphatic calls and tangible moves to divest from fossil fuels? Or will the banks, led by the Top 20 coal banks, continue to provide financial life support to coal-mining companies and coal-dependent energy utilities?,” writes Yann Louvel and Greig Aitken from BankTrack.

Suggested Tweet: #Climate test cases for banks – 4 dodgy #coal deals to watch in 2015 http://bit.ly/1K9KU15 #BanksQuitCoal pic.twitter.com/xdvSF8LVYv @BankTrack  

Southern African Women Stand Their Ground Against Big Coal

“More than 50 grassroots women activists gathered from around the region in late-January 2015 to stand their ground against Big Coal. Their six-day exchange and strategy meeting involved dozens of organisations in South Africa, Mozambique, Zambia, Zimbabwe and Botswana … The regional movement of women fighting Big Coal and demanding an alternative is one critical force now gaining traction,” write Samantha Hargreaves and Hibist Kassa in AllAfrica.com.

Suggested Tweet: Southern African Women Stand Their Ground Against Big #Coal http://bit.ly/1CuamgK #SouthAfrica #Zimbabwe #Botswana #Mozambique #Zambia

Why Were Billions Handed Out To An Indian Coal Mining Company That Didn't Need It?

“The [Queensland Premier Campbell] Newman government was handing an Indian billionaire billions of dollars of taxpayer money for literally – literally – no reason … Adani’s statement that it doesn’t need taxpayer assistance to get its enormous, controversial 60-year Carmichael coal project off the ground should have Queenslanders scratching their heads as to why it was being offered in the first place,” writes Richard Denniss, the Executive Director of The Australia Institute in The Guardian

Suggested Tweet: Why was Newman handing out billions to #Adani for Galilee Basin #coal project? http://bit.ly/16jPlY5 @TheAusInstitute


Queensland election upheaval stalls Adani’s port expansion plan

A backlash against the unpopular pro-coal Premier of Queensland, Campbell Newman, has seen him lose his seat in Parliament at the January 31 state election. In a knife-edge state election the incumbent Liberal National Party government is likely to narrowly lose. The exact composition of the state parliament is unlikely to be resolved for at least a week. As a result the federal Minister for the Environment, Greg Hunt, has suspended decision-making on permits for the dumping of dredging waste from the proposed expansion of the Abbot Point Coal Terminal until a new government is sworn in. The deferral has been welcomed by environment groups which are hopeful that a new government will place greater emphasis on the protection of the Great Barrier Reef World Heritage Area. (RenewEconomy, ABC News)

“The value of undeveloped thermal coal resources requiring new infrastructure is limited,”

wrote Goldman Sachs analysts in a January 2015 report titled ‘Thermal coal reaches retirement age’. (Not available online.)

top news

New study on dangers of air pollution in China: Greenpeace and Peking University have released a study showing that over a quarter of a million people in some of China’s major cities could face premature death because of high levels of air pollution. In the 31 provincial capitals on average 90 out of every 100,000 people could die prematurely every year as a result of high levels of fine particulate in the air. The findings mean that one out of every seven deaths in the cities is due to air pollution, making early deaths from fine particulate matter as risky as smoking. (Greenpeace Energy Desk)

US carbon capture project collapses: The US Department of Energy (DOE) has withdrawn funding for the proposed FutureGen 2.0 carbon capture and storage project in Illinois due to the inability of the project to use the funds by a September deadline. The project consortium has announced that without federal funding the proposed 229 megawatt (MW) plant with an estimated cost of US$1.65 billion will not proceed. The DOE decision was welcomed by the Sierra Club. (New York Times, Sierra Club)

Big leaks persist from Duke Energy’s North Carolina coal-ash dams: Duke Energy has detected 200 leaks from coal-ash dams at its 14 coal-fired power plants in North Carolina. About 11 million litres a day is leaking, including in some cases toxic elements in excess of regulatory standards. While the leaks are illegal, the state regulator plans to amend the utility’s existing permits to make them legal, a move the Southern Environmental Law Center plans to challenge. (Charlotte Observer)
Mongolian coal executives found guilty of tax evasion: Three employees of the coal-mining company SouthGobi Resources have been found guilty of tax evasion and sentenced to prison terms. The company has also been fined US$18 million. SouthGobi Resources, which is ultimately owned by Rio Tinto, is planning an appeal against the decision and claims that as a result of the fine it is “likely to be unable to meet its obligations, which could result in voluntary or involuntary insolvency proceedings.” (Bloomberg, SouthGobi Resources)

Czech industry lobbies to dump mine limits: The Prime Minister of the Czech Republic and the leaders of two other parties in the governing coalition are resisting a push by the Confederation of Industry to abandon limits imposed on two brown coal mines in 1991 to protect two villages. The Industry and Trade Minister, Jan Mládek, is lobbying for the mines to be allowed to expand, even though one would involve the demolition of 170 occupied houses in a village. (Prague Post)

“At no point of time do I feel that imported coal will work except at two or three plants that are in the coastal areas. While we had this major power requirement and shortage of coal, I did a study and found that there were very few plants dependent on imported coal or were situated on the coast,”

said Piyush Goyal, Minister for Power, Coal and New and Renewable Energy on why softening international coal prices would be of limited benefit to Indian power companies.


France: Coal power generation fell 58 per cent in 2014 due to plant closures.

Ghana: Volta River Authority signs MOU on coal plant with China’s Shenzen Energy Group.
India: Impoundment of trucks carrying illegal coal believed to be behind murder of policeman.

“Even leaving aside the irreducible thermodynamic and cost problems, a bet that clean coal is going to come online fast enough to make any meaningful contribution to CO2 reduction is a bet on unicorns … I suppose it's possible that there will suddenly be a huge pot of capital willing to invest billions of dollars in an unproven technology with long construction times and regulatory-dependent cash flows. But unicorns are more likely,”

Sean Casten, the president and CEO of Recycled Energy Development, told the US energy trade journal SNL after the collapse of the FutureGen 2.0 carbon capture and storage project in Illinois.

companies + markets

Coal prices to keep sliding: While currency deprecation against the US dollar has assisted exporters from Colombia, Australia, Indonesia and South Africa, Russian producers have been the greatest beneficiary. With export coal contracts written in US dollars, depreciation against the US dollar benefits exporters. However, a growing supply glut caused by new capacity coming on stream, especially in Australia, continues to drive prices down. (Bloomberg)

Coal India share sale: The Modi government’s sale of 10 per cent of its stake in Coal India is likely to raise about US$3.6 billion for the government. While the sale prompted a strike by unions, the offer was over-subscribed. The government sold a 5 per cent share in Coal India in 2010 but late last year one of its largest private shareholders, the Children’s Investment Fund, sold its stake due to concern that that the company’s profits were being suppressed due to coal prices being set at non-commercial rates. (Bloomberg, Wall Street Journal)
Indian company has US$2bn plan for Mozambique: International Coal Ventures Limited (ICVL), a joint venture of Indian government-owned coal consumers, has announced plans to spend US$2 billion establishing a coal-to-liquid project, a 300 MW power station and expand production at its Benga coal mine from five to 13 million tonnes per annum by 2017. ICVL bought a 65 per cent stake in the Benga coal project and all the rights for another two coal projects from Rio Tinto in July 2014. (The Indian Express)

Glencore reviews South African mine: One of Glencore’s South African subsidiaries, Optimum Coal Mines, has foreshadowed plans to slash production from its open-cut mines by 5 million tonnes. With half of its annual production under contract to supply Eskom power stations, Optimum has implied that cutbacks will solely affect its exports. (Reuters)

resources                      take action

Analyzing the Prospects of Peak Coal in China, Citi, November 2014. (Pdf)

This presentation comprises a set of charts outlining a Citigroup analyst’s estimates of when Chinese coal consumption could peak.

Global Divestment Day on February 13 and 14

350.org and a host of other organisations are organising a Global Divestment Day on February 13 and 14 to demand institutions divest from fossil fuels. Details are here.

Suggested Tweet: Global Divestment Day February 13 & 14 http://gofossilfree.org/ #Divest @350.org @greenpeace pic.twitter.com/Jb3Jf6xzG2

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