COAL NEWS & PRICES

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25 September 2008 10:03 AM London Time




EDF Has `Financial Flexibility to Move' on Constellation Energy
Sept. 24 (Bloomberg) -- Electricite de France SA, Europe's biggest power producer, has ``financial flexibility'' for raising its stake in Constellation Energy Group Inc. in order to safeguard planned development of nuclear reactors in the U.S.
``We have financial flexibility to move,'' on Constellation, EDF Chief Executive Officer Pierre Gadonneix said at a news conference today in Paris on a takeover offer for British Energy Group Plc. ``My conviction is that in the U.S. we want to work with an American partner, which was the case until today. If others come along we are open to dialogue with them.''

The French utility has ``determination and rapidity'' to safeguard its goals of developing nuclear reactors in the U.S. and partnerships for their operation, he said.

These were the first comments from Gadonneix, 65, after Electricite de France announced two days ago it offered to acquire Constellation with buyout firms KKR & Co. and TPG Capital LP for $6.2 billion, 32 percent more than Warren Buffett's MidAmerican Energy Holdings Co.

The agreement announced Sept. 18 for MidAmerican to buy Baltimore-based Constellation for $4.7 billion, or $26.50 a share, isn't adequate, Paris-based EDF said in a public filing. Constellation Chief Executive Officer Mayo Shattuck said the Buffett deal was ``superior'' after the largest U.S. power marketer plunged 58 percent in the preceding three days.

The French utility has a joint venture with Constellation, in which it has a 9.5 percent stake, to develop so-called new generation reactor models called EPRs, or Evolutionary Power Reactors, that are capable of producing about 1,600 megawatts of electricity.

The EDF filing was made as Shattuck and MidAmerican CEO Greg Abel told investors and analysts on a conference call that they expect to close their transaction in a year or less.

13 October 2008 03:56 PM London Time




Indonesian government to set monthly coal price
ANTARA quoted Mr Bambang Setiawan director general for mineral resources, coal and geothermal affairs as saying that Indonesian government would set the reference price of coal products in the country each month.
Mr Setiawan said that "The purchase contract of coals will later on be required to refer to the reference price. He said that the reference price will be made based a combination price of the Indonesia Coal Index, Barlow Jonker Index and Global Coal Index.

According to Mr Bambang Setiawan, the energy and mineral resources minister's regulation on the reference price and the domestic market obligation will be issued in November or December 2008.

Mr Setiawan said that for the on going sale purchase contracts, the government has called on parties involved to renegotiate them. He added that "If the price of a contract refers to the Indonesia Coal Index, the price will be too far so that we are calling on the to renegotiate their contracts. And many of them have been following this.

Mr Bambang Setiawan further added that a number of coal buyer countries such as Malaysia, Japan and South Korea have expressed readiness to renegotiate their coal purchase contracts. However, the energy and mineral resources ministry's senior official said, buyers from European countries and the United States are asking that the contracts should be appreciated.

Mr Bambang Setiawan said that "This is a dilemma because if they are forced to do so it is feared that it would disturb the relations among the countries.

Steel Guru - 13-Oct-08

France, Britain back coal plant climate fix
Monday, Oct 13, 2008
The European Union must fund a new technology to clean up coal plants and fight the twin problems of energy security and climate change, the EUs French presidency and Britains new climate minister say.

Safeguarding the 27-nation blocs energy supply has gone to the top of the EUs agenda after Russias invasion of Georgia, an important gas transit country, in August.

That goal has threatened to overtake another EU priority, climate change, given that the worlds cheapest and most available energy source, coal, emits the most carbon.

In a surprise move this week, EU lawmakers backed about 10 billion euros ($13.7 billion) of aid to test carbon capture and storage (CCS) technology, which scrubs coal plant emissions. Many scientists regard this as the single most important climate fix.

TORONTO, ONTARIO, Oct 14, 2008 (MARKET WIRE via COMTEX) ----Homeland Energy Group Ltd. (TSX: HEG) ('Homeland' or 'the Company'), announces the results of an independent technical report (ITR) confirming resources and reserves for the Appolo Fuels mines, located along the Kentucky/Tennessee border in the United States. The report, undertaken by Norwest Corporation for Homeland Energy Group, confirms a measured and indicated mineral resource of 114 million short tons (103 million metric tonnes) with a saleable mineral reserve of 45 million short tons (41 million metric tonnes).

The technical report was compiled by Norwest as the culmination of Homeland's due diligence efforts in the acquisition of Appolo Fuels and associated coal marketing company, Diversified Energy. The report used a number of assumptions to arrive at a reasonable valuation for Appolo mines. Assumptions include:

- Long term coal price of US$90 per short ton (Free on Board rail car),

- Cash operating costs ranging from US$60 per short ton in the early years to $70 and $80 per short ton in the latter years,

- Capital expenditures ranging from $2.3 million in the earlier years to $10 million in mid years and decreasing again towards the end of the mine life, and

- 15% discount rate and a zero rate of inflation applied to both costs and coal prices.

Based on these assumptions, (outlined in greater detail in the report filed on www.sedar.com) Norwest's technical report supports a net present value of US$353 million for the Appolo mines, pretax constant dollar as at January 1, 2009.

The resource estimate (see Table 1) in the Norwest report is based on recent and historic drilling done on the Appolo mines properties.

Table 1 - Summary of estimated in-situ mineral
resources -------------------------------------------------------------------------- Inferred Measured Indicated M+I --------------------------------------------------------------------------
Surface (M short tons) 5.4 26.1 14.3 40.4 -------------------------------------------------------------------------- Underground
(M short tons) 12.3 55.2 18.77 74.0 -------------------------------------------------------------------------- --------------------------------------------------------------------------
Total (M short tons) 17.7 81.3 33.0 114.4 -------------------------------------------------------------------------- To estimate proven and probable mineral reserves (see Table 2), Norwest applied a 25-year mine plan to both the surface and underground Measured & Indicated resources. This mine plan was based on current operations and does not take into account the plans of Appolo management, endorsed by Homeland Management, for increased production in coming years.

Table 2 - Summary
of estimated clean, recoverable mineral reserves for Appolo coal mines --------------------------------------------------------------------------
Proven Probable P+P -------------------------------------------------------------------------- Clean surface reserves (M short
tons) 14.0 6.4 20.4 -------------------------------------------------------------------------- Clean underground reserves
(M short tons) 18.2 6.2 24.4 -------------------------------------------------------------------------- Total clean reserves
(M short tons) 32.2 12.6 44.8 -------------------------------------------------------------------------- Appolo Fuels' headquarters are located on the outskirts of Middlesboro, Kentucky, a town with a population of about 12,000, while Diversified Energy's office is located in Knoxville, Tennessee. The Appolo mining operations are situated west of Middlesboro on property leaseholds totalling approximately 33,000 acres, and are located in both Bell County, Kentucky and Claiborne County, Tennessee. Appolo's operations consist of three company operated surface mines equipped with highwall miners; one surface mine operated by a contractor with a highwall miner; one contractor operated underground mine; and a preparation plant and rail load-out facility. Appolo has been operating on these properties since 1972, with total production in 2005, 2006, and 2007 being 1.3 million (M: 11.04, +1.12, +11.29%), 1.3M, and 1.2M clean short tons, respectively.

Within the Appolo property there are approximately nine coal zones. These coal zones are further divided into major and minor coal horizons. Overall resources were estimated for 29 different coal horizons. Coals on the Appolo properties are ranked High Volatile Bituminous A and generally utilized as thermal coal in the industrial and electric utility industries. Appolo currently produces two high grade thermal coals that are sold into the industrial market: a generally less than 1% sulphur product and an over 2.5% sulphur product. Numerous companies have conducted exploration programs on the current Appolo and adjoining properties. Appolo has drilled 478 holes since 1977. Drilling data from other local sources were also made available to Norwest. In total, data for 748 holes were provided to Norwest for evaluation.

The Qualified Persons for the preparation of the independent technical report, under the definition provided by Canadian National Instrument 43-101, are Mr. Warren A. Evenson, P. Geol. a senior geologist with Norwest,; Mr. R. Kevin Whipkey P.E., a professional mining engineer employed by Norwest, and David Miller, P.E. a professional mining engineer employed by Norwest. Mr. Evenson, Mr. Whipkey and Mr. Miller have reviewed and verified the technical content of this press release.

A copy of Norwest's Independent Technical Report on Appolo Fuels' properties has been filed on SEDAR and may be accessed at www.sedar.com.

Homeland Energy Group Ltd. (TSX: HEG) is a coal producer with operations the Witbank area of South Africa. The company also has a large-scale development property in South Africa and exploration interests in Southern Africa. Homeland is currently negotiating to acquire interests in a number of additional coal properties in eastern South Africa and neighbouring countries as well as in the United States. Homeland is a significant shareholder in Homeland Uranium Inc., a Canadian uranium exploration and development focused on projects in Niger and the United States. Homeland also has an aggressive global acquisition strategy with a focus on energy resources.

Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol "HEG" with 150,079,642 common shares issued and outstanding. www.homelandenergygroup.com.

Forward-Looking Statements

"This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential mineralization, potential mineral resources and mineral reserves and the Company's exploration and development plans with respect to Appolo mines) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, failure to establish estimated mineral resources or mineral reserves (the mineral resource and mineral reserve figures for Appolo are estimates and no assurances can be given that the indicated levels of coal will be produced), the possibility that future exploration results will not be consistent with the Company's expectations, coal recoveries for Appolo mines being less than those indicated by the drilling carried out to date, fluctuations in coal prices and operating costs, changes in world coal markets and equity markets, political developments in the United States, fluctuations in currency exchange rates, inflation, changes to regulations affecting the Company's activities, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties involved in interpreting drilling results and other geological data and the other risks disclosed under the heading "Risk Factors" in the Company's quarterly Management Discussion and Analyses filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, The Company does not intend and does not assume any obligation to update these forward-looking statements. Shareholders are cautioned not to put undue reliance on such forward-looking statements."

Company's plan for coal gasification in Swansea Bay

An energy company has revealed it wants to apply for planning permission and a permit to drill for coal and extract the gas from under Swansea Bay.

Clean Coal Ltd has five licences around the coast of Britain and is trying to locate reserves which are off shore and too deep to be mined traditionally.

It is thought up to 1bn tonnes of coal could lie beneath the surface.

But environmental group WWF Cymru says the focus should be on renewable energy not fossil fuels.

During the past two years the Coal Authority, on behalf of the Department of Energy and Climate Change, have - without much publicity - issued 18 underground coal gasification (UCG) licences.

Most are off the east coast of England and Scotland. The 77 sq km Swansea Bay licence is the only one in Welsh waters.
Shaun Lavis, Clean Coal Ltd's senior geoscientist, said: "We're expecting to find up to around a billion tonnes of coal actually in place under the whole of Swansea Bay in our licence area.

"What we hope to do is undertake an exploration programme to identify an area of around 30 to 50m tonnes or so of that coal that's suited for underground coal gasification."

He said UCG was more controlled than burning and did not produce as much heat and carbon dioxide.

He added: "Furthermore, what happens when you gasify the coal in the subsurface, is that a lot of the ash, or most of the ash and sulphur compounds will actually stay underground as well, so you don't have the issues with ash disposal and so forth that you might do with a conventional coal-fired power station."

The basic idea of UCG is that you find coal seams which are up to 500m (1,641 ft) underground - far too deep to mine, and probably too expensive and dangerous as well.
After drilling to find coal, a newer technology of horizontal drilling modified from the oil industry would then allow air and oxygen to be injected down to ignite the coal.

Oxygen combusts with the coal-producing synthesis gas - a combination of carbon dioxide, carbon monoxide, methane and hydrogen. The gas, or syngas, could then be piped to the surface via another borehole.

Swansea councillor Darren Price said members of the public would welcome potential job creation.

However, he added: "From a personal point of view, I want to see a lot more research and analysis in terms of the process and any potential negative impact environmentally."

He said it was still an "unknown process" and that the safety of local residents would be "paramount" when it came to the issue of storing gas

http://www.bbc.co.uk/news/uk-wales-16567883

Guildford Coal plans to start Mongolian coking coal production mid-2012


Melbourne (Platts)--30Jan2012/137 am EST/637 GMT




Australian coal producer Guildford Coal aims to start mining at its South Gobi coking coal project in Mongolia in mid-2012, after it received its mining licence for the project Monday, the company said in a statement.

The South Gobi project has the ability to support near-term development with the potential to be a 4 million mt/year coking coal operation.

Guildford expects South Gobi to have production costs of around $20/mt ROM and forecasts selling prices of around $60/mt for raw semi-soft coking coal.

South Gobi is located in the South Gobi province of Mongolia and around 60 km from the Chinese border station of Ceke, where coal from Mongolia is currently transported through China.

Guildford said in the statement that the target customers for its coal are the growing markets in China's Gansu province, Inner Mongolia and Shanxi province.

The company expects to have an off-take agreement for the coal by the end of the first quarter 2012.

Guildford Coal also has an equity share in seven tenements contained in two projects in Mongolia through its shareholding in Terra Energy. The coal projects are located in the South Gobi and Middle Gobi coal bearing basins which contain thermal and coking coals. It also has coal tenements in Queensland's Bowen Basin.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Coal/7098514

Bangladesh signs deal with India to build power plant

South Asian News Agency (SANA) ⋅ January 30, 2012 ⋅Share/Save

Dhaka(SANA)Bangladesh’s state-run Power Development Board on Sunday signed an agreement with India’s National Thermal Power Corp., or NTPC, to build a 1,320-megawatt coal-fired power plant in the southwest of the country, officials said.
The signing ceremony in Dhaka was attended by Bangladesh Finance Minister Abul Maal Abdul Muhith and P. Uma Shankar, the power secretary of India. It was the first joint venture deal the board has concluded with a foreign company.

NTPC will build and operate the $1.5 billion project on a 50:50 equity basis.

Bangladesh has increasingly turned to coal to generate electricity as the nation’s natural gas reserves are depleting fast, and may not last beyond 2021 unless new structures are found and explored.

Officials have said Bangladesh wants to nearly triple power generation to 15,357 megawatts (MW) by the end of 2015. The country, home to 160 million people, now generates the bulk of its energy from natural gas and imported fuel oil, but suffers from power shortages as wide as 1,500 megawatts a day.

Bangladesh has reserves of about 3.4 billion tonnes of coal, but only produces about 2,000 tonnes a day from one mine.

http://www.sananews.net/english/2012/01/bangladesh-signs-deal-with-india-to-build-power-plant/

Coal Market to ‘Struggle’ on Supply Gains, Morgan Stanley Says


Feb 3, 2012 6:33 AM GMT

Coal prices are forecast to decline this half as supply recovers from flooding in Australia, the biggest exporter, and demand in China and Japan slows, Morgan Stanley said.

“We’ve seen a normalization of supply both in the thermal and coking coal markets out of Australia,” Peter Richardson, Morgan Stanley’s chief metals strategist, said today at a panel discussion in Brisbane. “Our view is that the two markets will struggle in the first half of the year.”

Coal prices hit records last year after widespread flooding in Queensland and New South Wales crimped output at mines and disrupted train lines. Prices have dropped as supply returned to normal and demand in Japan was slow to recover following last year’s tsunami and earthquake, Richardson said. Demand growth in China has slowed as steelmakers have been unable to pass on increased production costs, he said.

Morgan Stanley forecasts coking coal, used to make steel, to trade at an average spot price of $210 to $235 a metric ton during 2012, and thermal coal in a range of $110 to $120 a ton.

Coking coal prices reached a record $330 a ton last year. Thermal coal prices at the Australian port of Newcastle slipped 12 percent to $111.35 in 2011, the biggest annual drop since 2005 and the first since 2011, IHS McCloskey data show.

The outlook for the coal market may have become “slightly pessimistic” in the short term, said Bill Champion, Rio Tinto Group (RIO)’s managing director for its Australian coal unit.

“In the long-term, the China and India demand growth story remains intact,” he said.

Chinese state-owned Beijing Guoli Energy Investment is to take a $20 million stake in Queensland-based Cuesta Coal ahead of its listing this year.

The Queensland coal hopeful has a portfolio of 33 exploration permits across the Bowen, Clarence-Moreton, Galilee and Surat basins that are are mostly prospective for thermal (power generation) coal.

Cuesta Coal plans to list on the Australian Securities Exchange in the first quarter of 2012.

Beijing Guoli, a power utility, will invest $5 million at 25 cents a share, with a further subscription of $15 million at the initial public offer price.

Cuesta Coal managing director Matthew Crawford said the Chinese investment was a significant step forward for Cuesta's listing although regulatory approval from China was still needed for Beijing Guoli.

The deal comes less than a month after the Chinese company invested $16 million for 45 per cent stake in another Australian company with coal interests, the ASF Group.