November 28, 2013
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Rebuff for Rio Tinto over planning laws
In a surprise move, the Upper House of the New South Wales Parliament has stripped a pro-mining provision from proposed planning legislation. The pro-mining amendment had been promoted by Rio Tinto. In April 2013 the NSW Land and Environment Court upheld an appeal by the residents of the small town of Bulga in the Hunter Valley against a proposal by Rio Tinto to expand its Warkworth mine. Stung by its defeat, the company persuaded the government to adopt legislative changes to insulate future applications from similar appeals. However, opposition to this and other changes by community groups prompted a political rebellion by a majority of members of the Upper House. (Sydney Morning Herald, The Global Mail) (Also see 'Take Action')

Suggested Tweet: Town of Bulga (Aus) wins round 2 against Rio Tinto  needs submissions by Fri Nov 29 to win next

top news

Scaled-back version of Galilee railway inches forward: The downturn in the global coal market has forced GVK Hancock to scale back the railway from its proposed Galilee Basin mines to the Abbott Point coal terminal. Instead of a 500 kilometre greenfield railway line directly to the port, GVK Hancock and the private railway company Aurizon are proposing a lower volume 300 kilometre railway line connecting to the existing railway network. (Aurizon, Sydney Morning Herald)

Burmese government dusts off coal plant plans: The Burmese government is seeking to revive plans for a 4000MW coal plant at Dawei as part of the development of a major port and heavy industrial zone near the border with Thailand. Mitsubishi, together with Electricity Generating Company of Thailand and Ital-Thai, will reportedly set up a joint venture to develop the project. In January 2012, public opposition resulted in the government scrapping a proposed 4000MW plant promoted by the Thai company Ratchaburi. (The Nation, Reuters, Reuters)

Coal terminal developer ignored need for permits: The company proposing to build the Gateway Pacific Terminal in Washington State cleared nine acres of land and drilled 37 holes without gaining permits or consulting with local Native American tribes. SSA Marine subsequently settled a lawsuit brought by RE Sources, a local environmental group, by paying $1.6 million for breaches of the Clean Water Act. (Portland Tribune)

Punjab project blows budget: Vedanta Resources has revealed a major construction cost overrun on its partly-completed 1980MW Talwandi Sabo coal power station in Punjab. Vedanta Resources Chairman, Anil Aggarwal,stated that the depreciation of the rupee and other factors resulted in the project costing US$1.76 billion instead of the originally estimated US$1.28 billion. (Times of India)
South Wales coal mine rejected: After protests by local residents and councillors the Welsh Minister for Planning, Carl Sargeant, has rejected a proposal to produce 256,000 tonnes of coal from an abandoned mine. The mine would have been approximately 60 metres from houses and a school despite planning guidelines stating that open cut coal mines should not be within 500 metres of residential areas. (South Wales Argus)

Teck project approved despite pollution uncertainty:  Internal government documents have revealed that the government of British Columbia approved an expansion of Teck’s Line Creek coal mine despite substantial uncertainty over “the effectiveness” of measures to control selenium pollution of waterways. As the mine drains into a lake which forms a border between Canada and the US, increasing pollution could trigger a dispute with the US under the Boundary Waters Treaty. (Globe and Mail)

Coal spill moves downstream: The 670 million-litre spill of coal mine tailings from the Obed mine in Alberta prompted the Regional Municipality of Wood Buffalo to shut its water supply intakes. David Schindler, a former Professor of Ecology at the University of Alberta expressed concern about the integrity of other tailings dams. “My guess is that pond is in no worse shape than other ponds ... there are so many factors that affect the integrity of these dykes,” he said. (Edmonton Journal)


Australia: Victorian government withdraws grant from failed coal plant proposal.

China: Expressways and airport shut as weekend winter smog descends.

India: Nine firms – including Tata and Adani - bid for the 4000MW Odisha Ultra Mega Power Project.

Mozambique: Official flags new coal areas may be opened for bids in mid-2014.

Poland: Krakow phases out coal for home heating.

US: Pollution Board votes to allow five old Illinois coal plants to keep on polluting.

Vietnam: Tata Power signs MOU for feasibility study on 1320MW Long Phu 2 Power Project.

“How do we tell caribou and moose and bison not to drink from the river system?,”

a First Nation councillor asked following the tailings spill from the Obed mine in Alberta.

companies + markets

Moody’s downgrades debt-laden Mongolian coal miner: Despite the government agreeing to buy its mine access road, Moody’s has downgraded the credit rating of Mongolian Mining Corporation (MMC). “Without a significant recovery in coking coal prices or a significant restructuring exercise, MMC's debt structure is unsustainable in view of large debt servicing requirements in the next 12-18 months,” said Simon Wong, a Moody's Vice President. MMC accounted for just over 40% of coal exports from Mongolia in the first half of 2013. (Moody’s)

Share float for Qinhuangdao Port Company: The operator of China’s largest coal port, Qinhuangdao Port Company, is seeking to raise US$717 million from an initial public offering on the Hong Kong Stock Exchange in mid-December.  Seven financial companies – including J.P. Morgan, UBS, HSBC and Citigroup – are handling the float. (Wall Street Journal)

Indian companies stripped of eleven coal blocks: The Ministry of Coal has stripped 11 coal blocks from companies, including Jindal Steel and Power and Birla Corporation, for failing to meet commitments to develop projects. Over 3.7 billion tonnes of coal reserves are within the coal blocks. (The Hindu)
Financial woes plague Indian power sector: A report by KPMG promoting accelerated coal development notes that “a big concern today is a lack of financing available for new [power] projects.” The former chairman of Maharashtra Electricity Regulatory Commission, V.P. Raja, attributes part of the electricity sector’s woes to a lack of due diligence on projects by private companies. “In an attempt to quote lowest tariff to get the contract, they did not bother to double-check whether fuel is really available and at what price,” he said. (KPMG, LiveMint)

Fitch flags met coal price fall: In an assessment of the prospects for U.S. coal companies, Fitch Ratings has flagged that “metallurgical coal prices could have further to fall as annual contracts come up for renewal given limited growth potential in North American and European steel production.” Fitch describes 2013 as a “trough year” for thermal coal prices. (Fitch Ratings)

Mechel keeps on falling: Shares in Mechel’s US-listed entity fell to an all-time low despite a coalition of lenders agreeing to ease conditions on a US$1 billion loan until the end of 2014. “Falling coal price leaves no hope for Mechel … Coking coal doesn’t offer any signs of recovery, any reason for optimism at all, as prices fall and the decline will probably continue next year,” said Vladimir Sergievskiy, an analyst at Barclays. (Bloomberg)

 “There’s a pretty plausible case that this is the beginning of the end [for thermal coal],”

said Craig Mackenzie, investment director and head of sustainability at Scottish Widows Investment Partnership.


Remote Prospects: a financial analysis of Adani’s coal gamble in Australia’s Galilee Basin, Institute for Energy Economics and Financial Analysis, November 2013. (Pdf)

This is a detailed analysis of Adani’s ambitious plans to develop a complex of mines, new railway extensions and a major port expansion. The report exposes the increasing financial stress on Adani Power’s troubled Indian power projects and the changing dynamics of the global coal market.

'Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854–2010', Climatic Change, 22 November 2013.
This journal article traces the origin of 63% of greenhouse gas emissions from oil, gas, cement and coal back to 90 private and government-owned companies. An interactive graphic using data from the journal article has been published by the Guardian.

take action

Call for help from the town of Bulga

Australia’s Lock The Gate Alliance is calling for submissions against Rio Tinto’s latest application for a “modification” to its existing Warkworth mine in the Hunter Valley in NSW. (More background here). The deadline is 5pm Friday 29th November (Australian Eastern Standard Time).

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