COAL NEWS & PRICES

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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.