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COAL NEWS (COAL)
smiler o
- 09 Jul 2008 13:07
COAL NEWS & PRICES
"
smiler o
- 23 Jul 2008 07:56
- 9 of 24
Coal demand shoots up price
Wed, July 23, 2008
FOSSIL FUELS: The rising cost of oil is playing a big role in its renewed popularity
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By KRISTINE OWRAM, THE CANADIAN PRESS
TORONTO -- Skyrocketing demand combined with a shrinking supply is making coal a "tight" commodity right now, causing prices -- and profits -- to soar, says the chief executive of an Australian mining company that lists its stock in Canada.
Peter Lynch, president and chief executive of Waratah Coal Inc., said yesterday that "hot demand" for coal used to fire power plants in emerging markets such as China and India is benefiting his company and the industry as a whole.
"Essentially, thermal coal isn't as easily available as it used to be, so the price of thermal coal has skyrocketed," said Lynch, adding that the commodity, which was selling for under US$50 a tonne just a few years ago, is now going for close to $200 a tonne.
"The commodity's in hot demand, it's not waning at all, because the demand for the product is continuing to grow. Irrespective of other economic conditions, the energy demands of India and China will continue unabated."
The rising price of coal has also led to a consolidation trend in the global industry as companies that produce coal used to make steel or to fuel power production try to get bigger to raise output to become more competitive and cash in on rising prices.
Last week, Ohio-based miner Cleveland Cliffs struck a nearly US$10 billion deal to acquire Alpha Natural Resources, creating a company with the largest reserves of iron ore and metallurgical coal in the United States.
The merged company will have more than 60 coal mines and nine iron ore mines in North and South American and Australia.
Earlier this year, the world's two biggest miners, BHP Billiton and Rio Tinto, discussed a possible merger of their far flung operations, which include metals, mineral processing and coal mining assets around the world.
However, the BHP bid, now valued at about $170 billion, was rejected by Rio Tinto and has turned hostile.
As prices for everything from iron ore to coal rise, the value of companies that produce such commodities also goes up. Lynch said coal is increasingly seen as a cheap alternative to oil -- another reason for the price increase.
"As oil prices go higher, the attraction for coal-fired electricity is even more so," he said.
http://lfpress.ca/newsstand/Business/2008/07/23/6236766-sun.html
Wed, July 23, 2008
FOSSIL FUELS: The rising cost of oil is playing a big role in its renewed popularity
Email Print Write Size: A A A Share:
By KRISTINE OWRAM, THE CANADIAN PRESS
TORONTO -- Skyrocketing demand combined with a shrinking supply is making coal a "tight" commodity right now, causing prices -- and profits -- to soar, says the chief executive of an Australian mining company that lists its stock in Canada.
Peter Lynch, president and chief executive of Waratah Coal Inc., said yesterday that "hot demand" for coal used to fire power plants in emerging markets such as China and India is benefiting his company and the industry as a whole.
"Essentially, thermal coal isn't as easily available as it used to be, so the price of thermal coal has skyrocketed," said Lynch, adding that the commodity, which was selling for under US$50 a tonne just a few years ago, is now going for close to $200 a tonne.
"The commodity's in hot demand, it's not waning at all, because the demand for the product is continuing to grow. Irrespective of other economic conditions, the energy demands of India and China will continue unabated."
The rising price of coal has also led to a consolidation trend in the global industry as companies that produce coal used to make steel or to fuel power production try to get bigger to raise output to become more competitive and cash in on rising prices.
Last week, Ohio-based miner Cleveland Cliffs struck a nearly US$10 billion deal to acquire Alpha Natural Resources, creating a company with the largest reserves of iron ore and metallurgical coal in the United States.
The merged company will have more than 60 coal mines and nine iron ore mines in North and South American and Australia.
Earlier this year, the world's two biggest miners, BHP Billiton and Rio Tinto, discussed a possible merger of their far flung operations, which include metals, mineral processing and coal mining assets around the world.
However, the BHP bid, now valued at about $170 billion, was rejected by Rio Tinto and has turned hostile.
As prices for everything from iron ore to coal rise, the value of companies that produce such commodities also goes up. Lynch said coal is increasingly seen as a cheap alternative to oil -- another reason for the price increase.
"As oil prices go higher, the attraction for coal-fired electricity is even more so," he said.
http://lfpress.ca/newsstand/Business/2008/07/23/6236766-sun.html
smiler o
- 30 Jul 2008 16:40
- 10 of 24
30 July 2008 04:39 PM London Time
FOCUS - China's coal price caps are making energy shortages worse - analysts
SHANGHAI (XFN-ASIA) - Conflict between the power and coal sectors in China is intensifying the coal shortages afflicting the country, and new "emergency" coal price caps may actually have made the problem worse, analysts suggested.
They said recent government measures aimed at making coal more affordable for China's power producers have served only to discourage the mines from maximizing supplies.
"The price control system is actually worsening the long-standing conflict between power plants and coal mines," said a domestic industry analyst who preferred not to be named.
Last winter, the storm-induced coal and power shortages across southern China were believed to have been exacerbated by the power plants themselves. Aggrieved by high coal prices and caps on electricity charges, utility bosses were reluctant to build up stockpiles.
In public, the authorities said that the weather had been the sole cause of their problems, caking power lines in inches of ice and incapacitating delivery networks. However, many observers said that coal shortages would have been less acute if power producers had had the incentive to maintain their inventories at safe levels.
The decision last month to cap the price of coal - as well as raise power tariffs - suggests that the government has paid heed to the utility companies' grievances and redressed the growing imbalance between the coal and power sectors.
But some analysts say the govedrnment failed to fully consider the very worrying possibility that the coal price caps would discourage the country's miners.
Morgan Stanley, in a note to investors, said that the recent price caps could worsen the coal supply gap. If the caps are fully enforced, smaller mines might actually "stop coal production until the price cap is removed at the end of 2008 with an expectation to sell at higher prices later."
This "may intensify current tight supply," the note said.
Underlying all this is the fate of China's small mines, many of of which had been shut down for safety reasons. Earlier this year, the authorities decided that a certain number of "rectified" small coal mines could reopen so as to increase supplies this summer, but the decision doesn't appear to have had much effect.
According to Deng Liangsheng, an analyst with China Merchants Securities, the decision always "lacked feasibility."
"Because reopening mines requires a lot of investment in safety and around two years of renovations, right now more than 60 pct of the mines that have been closed still do not comply with requirements," he said in a note.
"Furthermore, after formally reopening they will probably be forced to close again during the Olympic Games," he added.
In previous years, profit margins in the coal sector were so high - and state vigilance so low - that local officials tended to ignore legal niceties and allow thousands of small and unlicensed mine owners to produce at full capacity or more, leading to frequent catastrophic loss of life in the industry. This year, however, they appear less willing to risk the wrath of Beijing's safety inspectors.
Although the state attempted to tighten the price caps in a new policy document issued last week, market pressures are unlikely to ease.
According to Song Shen, coal analyst with Goldman Sachs, enforcement remains the biggest problem.
While it is comparatively easy for the government to force big coal companies like Shenhua or China Coal to stay within the government-set price range, it still needs to find a way of persuading the smaller operators to boost output despite the risks, Song said.
With power plant inventories down - in some cases - to less than a day of supplies, there are likely to be emergencies, and in an emergency, power plants are likely to pay higher prices now and complain later, said the domestic analyst.
"Coal is scarce and there is a reason why the price is so high," he said.
The market is still waiting for the only plausible long-term solution to the problem: the opening-up of the pricing system for both power and coal.
"Supply tensions and price rises are an accurate reflection of supply and demand and a result of cost pressures," said Merchant Securities' Deng.
"Price caps are not of benefit to the consolidation of the upstream coal sector and in fact protect the backward nature of downstream sectors. They also widen the gap between domestic and international prices and distort normal international trade, and by doing so, effectively subsidize other countries."
source: Xinhua Finance 30 July 2008
FOCUS - China's coal price caps are making energy shortages worse - analysts
SHANGHAI (XFN-ASIA) - Conflict between the power and coal sectors in China is intensifying the coal shortages afflicting the country, and new "emergency" coal price caps may actually have made the problem worse, analysts suggested.
They said recent government measures aimed at making coal more affordable for China's power producers have served only to discourage the mines from maximizing supplies.
"The price control system is actually worsening the long-standing conflict between power plants and coal mines," said a domestic industry analyst who preferred not to be named.
Last winter, the storm-induced coal and power shortages across southern China were believed to have been exacerbated by the power plants themselves. Aggrieved by high coal prices and caps on electricity charges, utility bosses were reluctant to build up stockpiles.
In public, the authorities said that the weather had been the sole cause of their problems, caking power lines in inches of ice and incapacitating delivery networks. However, many observers said that coal shortages would have been less acute if power producers had had the incentive to maintain their inventories at safe levels.
The decision last month to cap the price of coal - as well as raise power tariffs - suggests that the government has paid heed to the utility companies' grievances and redressed the growing imbalance between the coal and power sectors.
But some analysts say the govedrnment failed to fully consider the very worrying possibility that the coal price caps would discourage the country's miners.
Morgan Stanley, in a note to investors, said that the recent price caps could worsen the coal supply gap. If the caps are fully enforced, smaller mines might actually "stop coal production until the price cap is removed at the end of 2008 with an expectation to sell at higher prices later."
This "may intensify current tight supply," the note said.
Underlying all this is the fate of China's small mines, many of of which had been shut down for safety reasons. Earlier this year, the authorities decided that a certain number of "rectified" small coal mines could reopen so as to increase supplies this summer, but the decision doesn't appear to have had much effect.
According to Deng Liangsheng, an analyst with China Merchants Securities, the decision always "lacked feasibility."
"Because reopening mines requires a lot of investment in safety and around two years of renovations, right now more than 60 pct of the mines that have been closed still do not comply with requirements," he said in a note.
"Furthermore, after formally reopening they will probably be forced to close again during the Olympic Games," he added.
In previous years, profit margins in the coal sector were so high - and state vigilance so low - that local officials tended to ignore legal niceties and allow thousands of small and unlicensed mine owners to produce at full capacity or more, leading to frequent catastrophic loss of life in the industry. This year, however, they appear less willing to risk the wrath of Beijing's safety inspectors.
Although the state attempted to tighten the price caps in a new policy document issued last week, market pressures are unlikely to ease.
According to Song Shen, coal analyst with Goldman Sachs, enforcement remains the biggest problem.
While it is comparatively easy for the government to force big coal companies like Shenhua or China Coal to stay within the government-set price range, it still needs to find a way of persuading the smaller operators to boost output despite the risks, Song said.
With power plant inventories down - in some cases - to less than a day of supplies, there are likely to be emergencies, and in an emergency, power plants are likely to pay higher prices now and complain later, said the domestic analyst.
"Coal is scarce and there is a reason why the price is so high," he said.
The market is still waiting for the only plausible long-term solution to the problem: the opening-up of the pricing system for both power and coal.
"Supply tensions and price rises are an accurate reflection of supply and demand and a result of cost pressures," said Merchant Securities' Deng.
"Price caps are not of benefit to the consolidation of the upstream coal sector and in fact protect the backward nature of downstream sectors. They also widen the gap between domestic and international prices and distort normal international trade, and by doing so, effectively subsidize other countries."
source: Xinhua Finance 30 July 2008
smiler o
- 05 Aug 2008 18:33
- 11 of 24
India's Power Companies Face Coal Shortages, Press Trust Says
Aug. 3 (Bloomberg) -- India's electricity generators haven't been able to meet output targets because of declining coal supplies from local mines, the Press Trust of India reported, citing a power ministry official it didn't identify.
Supply fell short of demand by as much as 14.6 percent during the quarter ended June 30, the news agency reported. Coal companies produced 31.23 million tons during the period, 9 percent lower than targeted, it said.
Coal-fired plants account for 53.3 percent of India's power generation, according to the report.
Aug. 3 (Bloomberg) -- India's electricity generators haven't been able to meet output targets because of declining coal supplies from local mines, the Press Trust of India reported, citing a power ministry official it didn't identify.
Supply fell short of demand by as much as 14.6 percent during the quarter ended June 30, the news agency reported. Coal companies produced 31.23 million tons during the period, 9 percent lower than targeted, it said.
Coal-fired plants account for 53.3 percent of India's power generation, according to the report.
smiler o
- 10 Aug 2008 20:29
- 12 of 24
London Mining buys into South African coal miner
OSLO, Aug 8 (Reuters) - Norwegian metals group London Mining (LOND.OL: Quote, Profile, Research, Stock Buzz) said on Friday it had agreed to buy up to 50.5 percent stake in South Africa's coal miner DMC Energy for $120 million.
London Mining, which has a 2.36 billion tonne portfolio of iron assets, said it will build up its resource base to become a "significant supplier" to the steel and energy markets.
"This acquisition will form the basis of London Mining's new coal division which we hope to grow rapidly in the future," Managing Director Christopher Brown said in a statement.
"This acquisition will add substantial value to London Mining," he added.
Listed in the Oslo Access market for smaller firms, shares in London Mining were untraded so far on Friday. The shares closed at 30.8 crowns on Thursday.
Source: Reuters 08 August 2008
OSLO, Aug 8 (Reuters) - Norwegian metals group London Mining (LOND.OL: Quote, Profile, Research, Stock Buzz) said on Friday it had agreed to buy up to 50.5 percent stake in South Africa's coal miner DMC Energy for $120 million.
London Mining, which has a 2.36 billion tonne portfolio of iron assets, said it will build up its resource base to become a "significant supplier" to the steel and energy markets.
"This acquisition will form the basis of London Mining's new coal division which we hope to grow rapidly in the future," Managing Director Christopher Brown said in a statement.
"This acquisition will add substantial value to London Mining," he added.
Listed in the Oslo Access market for smaller firms, shares in London Mining were untraded so far on Friday. The shares closed at 30.8 crowns on Thursday.
Source: Reuters 08 August 2008
smiler o
- 12 Aug 2008 10:12
- 13 of 24
Govt considers coal sector restructuring 11/08/2008
The National Energy Administration is planning to promote more mergers and acquisitions in the country's coal industry in an effort to intensify the government's macroeconomic control and deal with overexploitation and over competition in the industry.
"Guidance of mergers and acquisitions in the coal industry has been submitted to the State Council and we're waiting for the approval," an official from the National Energy Administration said.
Industry insiders regarded it as a signal for a new round of reshuffling in China's coal sector.
Kang Rong, an official with China National Coal Association told China Daily the government has been considering regrouping the industry for a while, but was yet to take efficient action.
As early as 2005, the State Council issued the advice on improving the healthy development of China's coal industry, vowing to construct large coal mining bases and form large coal enterprise groups.
The government was alerted when it ran into difficulties in allocating coal to support regions struck by the blizzard early this year, Kang said.
State-owned coal firms aside, many others put their own interests ahead of the county's urgent demands, he added.
According to the State Electricity Regulatory Commission, the coal reserve in the country's big power plants was 43.81 million tons, merely enough to support 11 days of normal operations.
Facing such a severe coal shortage, the country urgently needs to improve its unitization rate of coal. While, the large coal enterprises are much more efficient in mining than small ones, as more than 80 percent of their mines have been fully exploited, compared to 10 to 15 percent for small coal producers which led to serious wastes, he said.
As for construction, large coal mines have always been well equipped. They have advanced mining technologies, transportation and other supporting facilities, he said.
He also said that large coal mines have reclamation plans after mining, and they pay considerable attention to environmental protection issues such as appropriate utilization of underground water.
He suggested the government should start with the consolidation of coal reserves in a bid to make rational exploitation plans and put them into use. ( Source: China Daily/COALWorld.net 2008-08-11 )
The National Energy Administration is planning to promote more mergers and acquisitions in the country's coal industry in an effort to intensify the government's macroeconomic control and deal with overexploitation and over competition in the industry.
"Guidance of mergers and acquisitions in the coal industry has been submitted to the State Council and we're waiting for the approval," an official from the National Energy Administration said.
Industry insiders regarded it as a signal for a new round of reshuffling in China's coal sector.
Kang Rong, an official with China National Coal Association told China Daily the government has been considering regrouping the industry for a while, but was yet to take efficient action.
As early as 2005, the State Council issued the advice on improving the healthy development of China's coal industry, vowing to construct large coal mining bases and form large coal enterprise groups.
The government was alerted when it ran into difficulties in allocating coal to support regions struck by the blizzard early this year, Kang said.
State-owned coal firms aside, many others put their own interests ahead of the county's urgent demands, he added.
According to the State Electricity Regulatory Commission, the coal reserve in the country's big power plants was 43.81 million tons, merely enough to support 11 days of normal operations.
Facing such a severe coal shortage, the country urgently needs to improve its unitization rate of coal. While, the large coal enterprises are much more efficient in mining than small ones, as more than 80 percent of their mines have been fully exploited, compared to 10 to 15 percent for small coal producers which led to serious wastes, he said.
As for construction, large coal mines have always been well equipped. They have advanced mining technologies, transportation and other supporting facilities, he said.
He also said that large coal mines have reclamation plans after mining, and they pay considerable attention to environmental protection issues such as appropriate utilization of underground water.
He suggested the government should start with the consolidation of coal reserves in a bid to make rational exploitation plans and put them into use. ( Source: China Daily/COALWorld.net 2008-08-11 )
smiler o
- 26 Aug 2008 09:19
- 14 of 24
Coal. It's what lights up the world
Commentary: Global coal demand is swelling and these companies will benefit
By Bryan Perry,
When the power goes on and the lights turn bright around the world, chances are good that the electricity firing up the latest power plant in China is a coal-fired plant running on none other than imported coal from the U.S.
Coal deposits here in the good old U.S. o f A. are the richest in the world, with the best burning coal in the world; kind of like how Saudi Arabia is the king of light sweet crude oil, the choice grade for gasoline. U.S. coal is the choice grade for getting the most heat out of a short ton of coal.
... all those advances in alternative energy combined are forecasted to make up only about 7% of our nation's power needs by 2020 -- and that's if all the stars line up for rolling out these new technologies.
Just to get a handle on why and how the price of coal is soaring, consider the fact that China is activating one new coal fired plant every week of the year. China makes up about 43% of emerging market demand and coal is right at the top of the list with the Chinese economy growing at a torrid 10.3% for the second quarter of 2008.
U.S. coal markets are dynamically responding to the scarcity of coal in the global landscape. With severe supply constraints in traditional coal export nations, including flooding in Australia, power outages in South Africa and coal shortages in China and India, U.S. coal will increasingly be valued high for purposes of supply diversification.
There has been a paradigm shift in the coal industry. The U.S. became the swing supplier of coal for the global market in 2007, and demand has only accelerated into 2008. U.S. coal exports are estimated to have grown by 10 million tons in 2007 and are expected to grow by another 20 million tons this year. U.S. utilities alone have bought up what is now a record 51-day stockpile, increasing inventories to hedge against future supply disruptions.
What the utilities know that isn't getting enough press is that as much as we all want to power the country with wind, solar, hydro, biomass and even nuclear, all those advances in alternative energy combined are forecasted to make up only about 7% of our nation's power needs by 2020 -- and that's if all the stars line up for rolling out these new technologies.
Coal is here to stay. In fact, according to government statistics, coal is responsible for 47% of the power generated in the U.S. today. By 2030 the Department of Energy forecasts that coal will account for 51% of power output, an increase of 4% in the wake of all the momentum behind alternative energy. That's a bit of a reality check for the green movement. We need a lot more power generation sooner than the green industry can deliver.
Estimates from leading coal producers forecast that 14 gigawatts of new coal-fired capacity are now under construction in the U.S., representing the addition of roughly 50 million tons of new annual coal demand. These plants will be phased in over the next four years, with half of them expected to start up by the end of 2009. Another 8 gigawatts, representing more than 30 million tons of additional incremental annual coal demand, are in advanced stages of development with the completion of the majority of these plants expected by 2013.
U.S. demand aside, coal producers are rapidly shifting greater percentages of their coal supplies to foreign markets at prices that can run up to 70% above current domestic steam coal index prices. Global thermal coal use continues to increase to fuel the growing number of coal-fueled generating plants. Stockpiles are very low in many nations, and producers and shippers are running at high capacity levels to try to keep pace with demand. The industry has priced significant volumes off of the reference price of $125 per metric ton for Newcastle thermal coal, and strong demand since the settlements has sent spot prices to $175 to $200 per ton.
Unlike oil prices, which have declined almost $30 per barrel in the past month, coal prices have actually increased in four of five categories as published by the Energy Information Agency, a U.S. government reporting agency.
Average Spot Coal Prices (Dollars per Short Ton)
Week Ended Central
Appalachia
12,500 Btu,
1.2 SO2 Northern
Appalachia
13,000 Btu,
<3.0 SO2 Illinois Basin
11,800 Btu,
5.0 SO2 Powder
River Basin
8,800 Btu,
0.8 SO2 Uinta Basin
11,700 Btu,
0.8 SO2
03-July-08 $117.60 $130.00 $70.00 $14.00 $54.00
11-July-08 $134.55 $138.00 $70.00 $14.00 $56.00
18-July-08 $139.30 $138.00 $70.00 $14.00 $56.00
25-July-08 $140.00 $149.00 $71.00 $12.50 $62.00
01-Aug-08 $140.00 $149.00 $71.00 $12.50 $62.00
Source: Energy Information Agency
Coal stocks have been undeservedly punished with the sell off in crude oil, natural gas and agricultural commodities. The real world shows that coal prices are holding up at historical highs going into the month of August. Numbers don't lie, but markets tend of over react and overshoot. I believe the best coal companies listed are tremendous buys at current prices.
The big picture future for coal is cleaning it up. Coal to liquids is just a very critical important new technology for the industry. It will allow coal to be converted and in the process to be cleaned so it becomes a fuel that becomes environmentally compliant. That's really the future for coal, to be a fuel that's environmentally compliant.
The CEO for Joy Global (JOYB), the leading equipment maker for the coal industry, was quoted saying "We already know that coal is very cost efficient. We know it's very reliable. We know there's tremendous security for production in the U.S. Once it's environmentally compliant, we have all the aspects of coal to make it a continued preferred fuel source for power generation, and also on a coal-to-liquids basis it will begin to open up the transportation markets as well. So I think the long-term outlook for coal is very positive, and it's very positive specifically because of the potential for commercial technologies."
Commentary: Global coal demand is swelling and these companies will benefit
By Bryan Perry,
When the power goes on and the lights turn bright around the world, chances are good that the electricity firing up the latest power plant in China is a coal-fired plant running on none other than imported coal from the U.S.
Coal deposits here in the good old U.S. o f A. are the richest in the world, with the best burning coal in the world; kind of like how Saudi Arabia is the king of light sweet crude oil, the choice grade for gasoline. U.S. coal is the choice grade for getting the most heat out of a short ton of coal.
... all those advances in alternative energy combined are forecasted to make up only about 7% of our nation's power needs by 2020 -- and that's if all the stars line up for rolling out these new technologies.
Just to get a handle on why and how the price of coal is soaring, consider the fact that China is activating one new coal fired plant every week of the year. China makes up about 43% of emerging market demand and coal is right at the top of the list with the Chinese economy growing at a torrid 10.3% for the second quarter of 2008.
U.S. coal markets are dynamically responding to the scarcity of coal in the global landscape. With severe supply constraints in traditional coal export nations, including flooding in Australia, power outages in South Africa and coal shortages in China and India, U.S. coal will increasingly be valued high for purposes of supply diversification.
There has been a paradigm shift in the coal industry. The U.S. became the swing supplier of coal for the global market in 2007, and demand has only accelerated into 2008. U.S. coal exports are estimated to have grown by 10 million tons in 2007 and are expected to grow by another 20 million tons this year. U.S. utilities alone have bought up what is now a record 51-day stockpile, increasing inventories to hedge against future supply disruptions.
What the utilities know that isn't getting enough press is that as much as we all want to power the country with wind, solar, hydro, biomass and even nuclear, all those advances in alternative energy combined are forecasted to make up only about 7% of our nation's power needs by 2020 -- and that's if all the stars line up for rolling out these new technologies.
Coal is here to stay. In fact, according to government statistics, coal is responsible for 47% of the power generated in the U.S. today. By 2030 the Department of Energy forecasts that coal will account for 51% of power output, an increase of 4% in the wake of all the momentum behind alternative energy. That's a bit of a reality check for the green movement. We need a lot more power generation sooner than the green industry can deliver.
Estimates from leading coal producers forecast that 14 gigawatts of new coal-fired capacity are now under construction in the U.S., representing the addition of roughly 50 million tons of new annual coal demand. These plants will be phased in over the next four years, with half of them expected to start up by the end of 2009. Another 8 gigawatts, representing more than 30 million tons of additional incremental annual coal demand, are in advanced stages of development with the completion of the majority of these plants expected by 2013.
U.S. demand aside, coal producers are rapidly shifting greater percentages of their coal supplies to foreign markets at prices that can run up to 70% above current domestic steam coal index prices. Global thermal coal use continues to increase to fuel the growing number of coal-fueled generating plants. Stockpiles are very low in many nations, and producers and shippers are running at high capacity levels to try to keep pace with demand. The industry has priced significant volumes off of the reference price of $125 per metric ton for Newcastle thermal coal, and strong demand since the settlements has sent spot prices to $175 to $200 per ton.
Unlike oil prices, which have declined almost $30 per barrel in the past month, coal prices have actually increased in four of five categories as published by the Energy Information Agency, a U.S. government reporting agency.
Average Spot Coal Prices (Dollars per Short Ton)
Week Ended Central
Appalachia
12,500 Btu,
1.2 SO2 Northern
Appalachia
13,000 Btu,
<3.0 SO2 Illinois Basin
11,800 Btu,
5.0 SO2 Powder
River Basin
8,800 Btu,
0.8 SO2 Uinta Basin
11,700 Btu,
0.8 SO2
03-July-08 $117.60 $130.00 $70.00 $14.00 $54.00
11-July-08 $134.55 $138.00 $70.00 $14.00 $56.00
18-July-08 $139.30 $138.00 $70.00 $14.00 $56.00
25-July-08 $140.00 $149.00 $71.00 $12.50 $62.00
01-Aug-08 $140.00 $149.00 $71.00 $12.50 $62.00
Source: Energy Information Agency
Coal stocks have been undeservedly punished with the sell off in crude oil, natural gas and agricultural commodities. The real world shows that coal prices are holding up at historical highs going into the month of August. Numbers don't lie, but markets tend of over react and overshoot. I believe the best coal companies listed are tremendous buys at current prices.
The big picture future for coal is cleaning it up. Coal to liquids is just a very critical important new technology for the industry. It will allow coal to be converted and in the process to be cleaned so it becomes a fuel that becomes environmentally compliant. That's really the future for coal, to be a fuel that's environmentally compliant.
The CEO for Joy Global (JOYB), the leading equipment maker for the coal industry, was quoted saying "We already know that coal is very cost efficient. We know it's very reliable. We know there's tremendous security for production in the U.S. Once it's environmentally compliant, we have all the aspects of coal to make it a continued preferred fuel source for power generation, and also on a coal-to-liquids basis it will begin to open up the transportation markets as well. So I think the long-term outlook for coal is very positive, and it's very positive specifically because of the potential for commercial technologies."
smiler o
- 11 Sep 2008 19:44
- 15 of 24
COAL NEWS: LATEST HEADLINES
11 September 2008 07:43 PM London Time
Thai Lanna to open new coal mine in Indonesia by Q4
BANGKOK, Sept 11 (Reuters) - Thai coal miner and ethanol producer Lanna Resources PCL LANN.BK said it planned to open another mine in Indonesia by the fourth quarter to help ease the impact of the forced closure of one of its existing mines there.
The opening had been delayed from earlier this year due to heavy rains in Indonesia, where until recently the company operated two coal mines, business development director Srihasak Arirachchkaran told Reuters on Thursday.
"We want to speed up operating this mine because it should help compensate for the second mine," he said.
Lanna's coal business contributes almost 90 percent of sales and nearly half of profit.
However, in July an Indonesian court revoked the licence of one of its two mines in the country, which was operated by its 55 percent owned Indonesian subsidiary.
The government may grant a new licence for the mine and Lanna could work with the new operator.
Lanna planned to spend $10 million next year to develop the third mine, which should produce about 50,000-100,000 tonnes this year, rising to 1.2-1.5 million tonnes in 2009 and 2 million tonnes in 2010, Srihasak said. Despite the mine closure, rising prices for coal and ethanol should help Lanna show higher earnings this year.
"We still have growth in terms of both the top line and bottom line because prices of coal and ethanol are much better than expected," he said without giving a specific forecast.
Two analysts polled by Reuters Estimates expected a 2008 net profit of 515 million baht ($15 million), up 38 percent. Its first-half net profit rose 9.7 percent to 288 million baht.
Coal prices were expected to rise to $60 per tonne in the second half from the first half's $55, but prices next year are expected to fall in line with global crude prices, Srihasak said.
Its ethanol business, run by subsidiary Thai Agro Energy, is expected to beat a profit target of 100 million baht this year after oil companies placed more orders to boost their inventories for the fourth quarter, he said.
Domestic ethanol output is expected to be 0.9-1.0 million litres a year and rise to 1.5 million litres next year, which should be sufficient to satisfy domestic demand, he said.
Lanna is 45 percent owned by Siam City Cement SCCC.BK, Thailand's second-largest cement producer.
Lanna owns 75.75 percent of Thai Agro Energy, which plans to list on the Thai bourse in the first half of 2009.
Thai Agro plans to sell 200 million new shares to the public and the proceeds will be used to fund the construction of a second ethanol plant. After the listing, Lanna's holding will be diluted to 51 percent, he said.
Thai Agro operates at full capacity, producing 150,000 litres (26,400 gallons) a day, and its second plant would have a daily capacity of 200,000 litres, Srihasak said.
11 September 2008 07:43 PM London Time
Thai Lanna to open new coal mine in Indonesia by Q4
BANGKOK, Sept 11 (Reuters) - Thai coal miner and ethanol producer Lanna Resources PCL LANN.BK said it planned to open another mine in Indonesia by the fourth quarter to help ease the impact of the forced closure of one of its existing mines there.
The opening had been delayed from earlier this year due to heavy rains in Indonesia, where until recently the company operated two coal mines, business development director Srihasak Arirachchkaran told Reuters on Thursday.
"We want to speed up operating this mine because it should help compensate for the second mine," he said.
Lanna's coal business contributes almost 90 percent of sales and nearly half of profit.
However, in July an Indonesian court revoked the licence of one of its two mines in the country, which was operated by its 55 percent owned Indonesian subsidiary.
The government may grant a new licence for the mine and Lanna could work with the new operator.
Lanna planned to spend $10 million next year to develop the third mine, which should produce about 50,000-100,000 tonnes this year, rising to 1.2-1.5 million tonnes in 2009 and 2 million tonnes in 2010, Srihasak said. Despite the mine closure, rising prices for coal and ethanol should help Lanna show higher earnings this year.
"We still have growth in terms of both the top line and bottom line because prices of coal and ethanol are much better than expected," he said without giving a specific forecast.
Two analysts polled by Reuters Estimates expected a 2008 net profit of 515 million baht ($15 million), up 38 percent. Its first-half net profit rose 9.7 percent to 288 million baht.
Coal prices were expected to rise to $60 per tonne in the second half from the first half's $55, but prices next year are expected to fall in line with global crude prices, Srihasak said.
Its ethanol business, run by subsidiary Thai Agro Energy, is expected to beat a profit target of 100 million baht this year after oil companies placed more orders to boost their inventories for the fourth quarter, he said.
Domestic ethanol output is expected to be 0.9-1.0 million litres a year and rise to 1.5 million litres next year, which should be sufficient to satisfy domestic demand, he said.
Lanna is 45 percent owned by Siam City Cement SCCC.BK, Thailand's second-largest cement producer.
Lanna owns 75.75 percent of Thai Agro Energy, which plans to list on the Thai bourse in the first half of 2009.
Thai Agro plans to sell 200 million new shares to the public and the proceeds will be used to fund the construction of a second ethanol plant. After the listing, Lanna's holding will be diluted to 51 percent, he said.
Thai Agro operates at full capacity, producing 150,000 litres (26,400 gallons) a day, and its second plant would have a daily capacity of 200,000 litres, Srihasak said.
smiler o
- 25 Sep 2008 10:04
- 16 of 24
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.
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.
smiler o
- 13 Oct 2008 15:58
- 17 of 24
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
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
smiler o
- 13 Oct 2008 16:00
- 18 of 24
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.
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.
smiler o
- 14 Oct 2008 09:49
- 19 of 24
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."
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."
smiler o
- 29 Jan 2012 11:33
- 20 of 24
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
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
smiler o
- 30 Jan 2012 11:44
- 21 of 24
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
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
smiler o
- 30 Jan 2012 11:47
- 22 of 24
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/
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/
smiler o
- 03 Feb 2012 08:49
- 23 of 24
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.
smiler o
- 03 Feb 2012 08:52
- 24 of 24
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.
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