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CHINA LOWERS COAL EXPORT LEVIES TO BOOST AILING ECONOMY CHINA LOWERS COAL EXPORT LEVIES TO BOOST AILING ECONOMY(0)

China, the world’s biggest coal consumer, is cutting export tariffs for the fossil fuel beginning Jan. 1 and it will also correct those for a range of other commodities particularly some consumer products and parts to make high-tech devices.

The move, which aims to spur domestic demand and promote industrial upgrading, comes after relentless lobbying by the China National Coal Association, as a sharp drop in the commodity price has left about 70% of the country’s miners in the red

The move, which aims to spur domestic demand and promote industrial upgrading, comes after relentless lobbying by the China National Coal Association, as a sharp drop in the commodity price has left about 70% of the country’s miners in the red and more than 50% to owe wages, Reuters reports.

Other items that will see lower tariffs next year include camera lenses and lasers for fiber-optic communication systems, the Ministry of Finance said in a statement on its website Tuesday.

Last month the Asian giant signed a free trade agreement with Australia that eliminates a 6% import tariff on power-station coal and a 3% levy on steelmaking coal coming from Down Under.

China’s dependence on coal is well known. Annual consumption exceeded 1 billion short tons per year in 1988 and has exploded since then, to about 4 billion tons last year. This means the Asian giant gets about 70% of its energy from the fossil fuel, a number the government hopes to reduce to 65% by 2017.

In the past three years Australia’s coal industry has experienced challenging times with prices for thermal coal, which consumed by power stations to generate electricity, dropping over 40%. More than 30,000 mining jobs have been lost in Australia this year amid a slump in the price of key commodities like coal and iron ore.

Cecilia Jamasmie

CHINA TO CAP COAL USE BY 2020 CHINA TO CAP COAL USE BY 2020(0)

China has said it will set a cap on coal consumption in 2020, following a statement from influential government think tank, which said China must cap its use of coal by 2020 to meet climate goals.

The State Council, China’s cabinet, released details of an energy strategy, which includes capping coal consumption at 4.2 billion t in 2020 and having coal be no more than 62% of the primary energy mix by that year.

Su Ming, a researcher with the Energy Research Institute (ERI), run by China’s National Development and Reform Commission, said while “peak coal” needed to come in 2020, industrialised eastern regions needed to start to cut consumption earlier if targets were to be met.

“We are trying to tell provincial officials how much coal they could use under a restricted nationwide quota,” Su said.

Beijing and the big consuming regions of Hebei, Tianjin and Shandong have already committed to cut coal use by a total of 83 million t over the 2012 – 2017 period, but Su said they need to cut at least 220 million tonnes by 2030 if they are to meet their air pollution goals.

Beijing alone would need to cut coal use by 99% to below 200,000 t by 2030, ERI said. Hebei, Tianjin and Shandong would have to make cuts of up to 27% by then.

The New York Times reported that coal burning for industrial use is the largest source worldwide of carbon dioxide emissions, which are the biggest catalyst of global climate change. China is the biggest emitter of greenhouses gases in the world, and it uses as much coal each year as the rest of the world combined. The power generation industry in China is responsible for half of the coal consumption in the country, and other heavy industries — steel and cement production, for example — are also direct users of coal.

The cap on coal use in 2020 is not necessarily a peak. In theory, coal consumption might increase beyond 2020, but some researchers say economic trends show the rate of growth in coal use slowing in coming years and peaking about 2020. That means the State Council’s timeline is consistent with the findings of those researchers.

Onlookers will closely wait to see if the numbers quoted by China’s State Council are formalised in the next five-year plan, the details of which will be released around March and will guide national development from 2016 to 2020.

According to Reuters, China is expected to announce a coal cap in the next five-year plan for 2016-2020, but it has not yet decided whether it will be binding, or how it will be allocated regionally.

The Shanghai Daily noted that China will likely look to increase use of natural gas, nuclear power and renewable energy as it transitions away from coal.

The announcement on coal use follows a recently announced goal of having carbon dioxide emissions peak around 2030. Last week, President Obama and President Xi Jinping of China made an announcement together in Beijing in which each leader pledged to cut or limit carbon dioxide emissions from their countries.

Edited from various sources by Sam Dodson

Mongolia approves Guildford Coal’s capacity expansion projects Mongolia approves Guildford Coal’s capacity expansion projects(0)

The Mineral Resource Authority of Mongolia (MRAM) has approved Guildford Coal’s proposed capacity expansion at the Baruun Noyon Uulcoal (BNU) mine in Noyon Soum of the Umnu Gobi province.

The approval was given by the MRAM’s Mineral Resources Profession Committee.

As part of the expansion, the mining capacity at the BNU will be increased to 1.5 million tons in 2015 and two million tons in 2016.
Guildford Coal managing director Peter Kane said: “MRAM’s approval to increase our mining capacity is a significant development for Guildford.

“It allows us to ramp up production at the BNU Mine beyond the recently announced targeted production figures for 2015, if it makes economic sense to do so.”

Meanwhile, the company said that washing and laboratory testing of the second trial batch of coal from the BNU confirmed that the project’s coal can be washed to produce a low-ash premium quality hard coking coal with low sulphur.

The lab tests were carried out at Alfred H Knight and Bureau Veritas laboratories in Ulaanbaatar.

Further test work is being conducted at the China Coal Research Institute in Beijing.

Mongolia approves Guildford Coal’s capacity expansion projects Mongolia approves Guildford Coal’s capacity expansion projects(0)

The Mineral Resource Authority of Mongolia (MRAM) has approved Guildford Coal’s proposed capacity expansion at the Baruun Noyon Uulcoal (BNU) mine in Noyon Soum of the Umnu Gobi province.

The approval was given by the MRAM’s Mineral Resources Profession Committee.

As part of the expansion, the mining capacity at the BNU will be increased to 1.5 million tons in 2015 and two million tons in 2016.
Guildford Coal managing director Peter Kane said: “MRAM’s approval to increase our mining capacity is a significant development for Guildford.

“It allows us to ramp up production at the BNU Mine beyond the recently announced targeted production figures for 2015, if it makes economic sense to do so.”

Meanwhile, the company said that washing and laboratory testing of the second trial batch of coal from the BNU confirmed that the project’s coal can be washed to produce a low-ash premium quality hard coking coal with low sulphur.

The lab tests were carried out at Alfred H Knight and Bureau Veritas laboratories in Ulaanbaatar.

Further test work is being conducted at the China Coal Research Institute in Beijing.

THE MOST PRODUCTIVE COAL MINE IN THE WORLD THE MOST PRODUCTIVE COAL MINE IN THE WORLD(0)

Out in Wyoming, near rancher land, rests the single largest coal mine in the world—the North Antelope Rochelle mine.

Situated in the Powder River Basin, this massive undertaking in energy extraction, with its jutting structures and massive hauling vehicles, dominates the landscape. Owned and operated by Peabody Energy, the North Antelope Rochelle mine spans about 100 square miles, according to Scott Durgin, senior vice president of Powder River Basin operations.

“You’re looking at the world’s largest mine,” Durgin told The Guardian. “This is one of the biggest seams you will ever see. This particular shovel is one of the largest shovels you can buy, and that is the largest truck you can buy.”

The Powder River Basin is so prolific that operations there have caused Wyoming to overtake West Virginia and Kentucky as the largest coal production state in the nation. In fact, according to the U.S. Energy Information Administration (EIA), about 7.072 million tonnes of coal was produced in Wyoming last week alone. By comparison, West Virginia, the runner up, produced roughly 1.891 million tonnes over the same period of time, meaning Wyoming had about 374 percent of their output.

Inside the North Antelope Rochelle mine itself, which as The Guardian pointed out is roughly the size of Washington D.C., is a company-estimated 3 billion tonnes of coal reserves. While it’s difficult to even comprehend the amount of energy in that much coal, it can be put another way.

The EIA estimates that in 2013, coal accounted for roughly 39 percent of U.S. energy generation. Chris Curran of Peabody told The Guardian that roughly 12 percent of that coal came from the North Antelope Rochelle mine alone. That means that about 4.68 percent of the country’s energy comes from that mine alone.

Robert Spence

AUSTRALIA-CHINA TRADE DEAL OFFERS SOME RELIEF TO CHINESE COAL MINERS AUSTRALIA-CHINA TRADE DEAL OFFERS SOME RELIEF TO CHINESE COAL MINERS(0)

A landmark Australia-China free trade deal signed on Monday will delay the exemption of import tariffs on Australian thermal coal, giving Chinese miners a much-needed buffer for local prices to recover, traders and analysts said.

The memorandum of understanding, which Chinese President Xi Jinping signed on a state visit to Canberra, would eliminate a 3 percent coking coal tariff immediately and a 6 percent tariff on thermal coal within two years.

The agreement will give Australian producers of coking coal, used in steelmaking, some help in riding out a two-year price rout. However, thermal coal producers face two years of the tariffs, that caught the market by surprise when they were introduced in October.

In the long term, industry experts said mine closures in China and elsewhere were the only solution to tackling a crippling global supply glut that has already pushed prices to 5-1/2 year lows.

“Chinese coal miners can now breathe a collective sigh of relief. The two-year phase-in period for steam coal will give time for the market to rebalance,” said Zhao Zhichao, a coal analyst at Yongan Futures.

Steam coal futures on China’s Zhengzhou Exchange rose as much as 0.7 percent, while coking coal futures inched up 0.3 percent by 0647 GMT.

The Minerals Council of Australia, which had pressed for zero tariffs on coal immediately, welcomed the deal.

“That is a superior deal to that provided under the ASEAN-China FTA which phased coal tariffs out over four years,” Council CEO Brendan Pearson said in a statement.

Traders said the tariff relief on metallurgical coal was set to boost Australian orders, potentially even displacing some shipments from Mongolia, as local suppliers were more expensive.

China’s imports from Australia, which supplies almost half of China’s total coking coal imports, reached 20.87 million tonnes in the first 10 months of 2014, while second-ranked supplier Mongolia shipped 10.7 million tonnes.

“For anyone in the met coal business this is a significant relief for them,” said James Rickards, spokesman for Yancoal Australia Ltd.

With some 70 percent of its miners in the red, Beijing has rolled out a string of support policies, including import tariffs and cutting ancillary fees.

Trade sources said Beijing is also considering a proposal to cut coal export taxes to 3 percent from the current 10 percent to give its oversupplied market a potential sales outlet. (Reporting by Fayen Wong and Sonali Paul; Editing by Richard Pullin)

BHP, RIO TINTO CALL FOR GLOBAL DEAL TO PUSH CLEAN COAL BHP, RIO TINTO CALL FOR GLOBAL DEAL TO PUSH CLEAN COAL(0)

Two of the world’s largest mining companies, BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO) called world leaders on Thursday to seek a deal setting an international price on carbon.

Their plea comes amid fears a climate change deal reached Wednesday between the U.S. and China could hurt coal miners in Australia, the world’s second largest producer of the fossil fuel.

The miners worry a one-sided action to stop increases in carbon dioxide emissions may lead to the imposition of future trade barriers.

The miners worry a one-sided action to stop increases in carbon dioxide emissions may lead to the imposition of future trade barriers.

According to The Australian, BHP chief executive Andrew Mackenzie was the first to raise his point, saying that while the impact of the agreement was “hard to tell at the moment,” it would rushed to assumed “anything to do with climate is bad for coal’’:

“It needn’t be if the right technology is developed, and people also want to solve the issue of keeping energy affordable and ­secure,” Mr Mackenzie said.

The deal should not mean “that you drastically move away from coal”, Mr Mackenzie said, advocating that the “the world moves quickly to deal with offsetting technologies like carbon capture and storage”.

Rio Tinto’s Sam Walsh, in turn, also emphasized the role of carbon capture and storage technologies, saying he hoped they would be lead to a more environmentally friendly way of producing commodities such a coal and steel.

“We have spent $100 million on carbon sequestration projects. We’re very much aligned with this agreement between the U.S. and China and we look forward to the assistance they can provide in bringing these technology advances ahead,’’ he said in a TV interview with ABC.

Both mining leaders will be attending the G20 summit this weekend in Brisbane, Australia, recently under attack for resisting calls by the U.S. and other countries to place climate change on the meeting formal agenda.

Cecilia Jamasmie

YANZHOU COAL INJECTS $2.8BN INTO TROUBLED AUSTRALIAN UNIT YANZHOU COAL INJECTS $2.8BN INTO TROUBLED AUSTRALIAN UNIT(0)

Yanzhou Coal, one of China’s largest coal miners, will inject $2.8 billion (A$3.2bn) into its Australian subsidiary Yancoal (ASX:YAL) in an attempt to keep it afloat as coal prices flirt with five-year lows.

Yancoal, which has seven mines in Australia, said on Monday it would raise A$2.3bn through a subordinated capital notes rights offer to pay down a mounting debt pile and fund its existing operations.

The Chinese group, which owns 78% of Yancoal, has also given an undertaking that it will “ensure Yancoal remains solvent,” for as long as it remains majority shareholder.

The Chinese group, which owns 78% of Yancoal, has also given an undertaking that it will “ensure Yancoal remains solvent,” for as long as it remains majority shareholder.

Yancoal stock closed down 27% at 16 cents on the Australian Stock Exchange following the announcement. So far this year it has dropped 71%, a much bigger fall than its closest local rivals Whitehaven Coal and New Hope Coal.

The global coal industry is in a prolonged slump following a decade-long investment boom that saw a glut of supply overtake demand.

Coal markets have been hurt by a glut of raw material, as supply rises from mining operations in hubs like Australia and demand growth in Asia eases.

Prices of thermal coal used to create electricity and metallurgical coal, which is consumed by steelmakers, have been trading near multi-year lows.

In Australia alone more than 10,000 jobs have been shed over three years as companies mothball mines and slash costs.

The package of funding injection comes after Yanzhou Coal ditched a plan to buy out the minority 22% stake in its Australian arm earlier this year.

Cecilia Jamasmie

COAL REMAINS THE FOUNDATION OF AUSTRALIA’S ENERGY NEEDS COAL REMAINS THE FOUNDATION OF AUSTRALIA’S ENERGY NEEDS(0)

The Minerals Council of Australia (MCA) has echoed Prime Minister Tony Abbott’s views that fossil fuels would remain an integral part of Australia’s energy mix.

“For the foreseeable future, coal is the foundation of our prosperity,” Prime Minister Abbott said in response to questions earlier this week.

“Coal is the foundation of the way we live because you can’t have a modern lifestyle without energy. You can’t have a modern economy without energy and for now and for the foreseeable future, the foundation of Australia’s energy needs will be coal.”

Abbott noted that if a serious effort was to be made in raising living standards in less developed countries, and maintaining or improving living standards in Australia, “making the best use of coal” had to be seriously considered.

The MCA noted this week that while renewable energy would contribute to the world’s growing demand for energy, the total demand could not be met without the use of fossil fuels.

“There is no escape from extreme poverty without access to cheap energy and coal is the leading option. In the world’s fastest growing energy market – Asia – the cost of generating electricity from coal is half the cost of gas, and even more affordable than other alternatives,” MCA CEO Brendan Pearson said.

However, he pointed out that new supercritical coal technologies were rapidly reducing carbon dioxide (CO2) emissions from coal-fired power generation, and that new generation plants were delivering coal-fired generation at nearly half the CO2 emissions of the global average.

These new plants generated 743 g/kWh of CO2, compared with global average of 1 300 g/kWh of CO2, and testing was under way on plants that will reduce this to 288 g/kWh of CO2.

Pearson said thatstrong progress was also being made in expanding carbon capture and storage (CCS) projects around the world.

“With Boundary Dam now in operation in Canada, there are 13 large-scale CCS projects operating globally, and an additional nine under construction, representing a 50% increase since 2011. In Australia, CCS projects have successfully sequestered 65 000 t of CO2 in a depleted gas field in Victoria’s Otway basin and captured CO2 at a coal-fired power plant at Callide in Queensland’s Bowen basin.”

Pearson said that contrary to “hysterical” claims by the Australian Greens, a strong future for coal and lower CO2 emissions were not mutually exclusive.

BY: ESMARIE SWANEPOEL

GLENCORE’S COAL OUTPUT UP 9% AS PRICES TOUCH 5-YEAR LOW GLENCORE’S COAL OUTPUT UP 9% AS PRICES TOUCH 5-YEAR LOW(0)

European thermal coal for delivery next year headed for its lowest-ever close as one of the major producer, Glencore (LON:GLEN) reported Tuesday a 9.2% increase in third-quarter output amid a glut of supply in the seaborne market.

Next-year coal for delivery to northwest Europe dropped as much as 1.1% to $70.35 a metric ton by 7:35 a.m. ET. That’s the lowest intraday price since March 2009 and would be the lowest close since at least September 2007, according to Bloomberg.

Coal prices have been dangerously flirting with a predicted five-year low this year and analysts don’t see the situation getting better anytime soon, as China’s demand weans.

Glencore, which acquired miner Xstrata last year, said total output from mines in South Africa, Australia and Colombia rose to 40.2 million metric tons from 36.8 million tons a year ago.

The increase in coal production was driven by expansions at its Australian mines, the Swiss firm said. This year’s average price for the power-station fuel from Australia’s Newcastle port, a benchmark for Asia, went down 14%to $73 a ton from a year ago, it added.

Production of copper, the other main contributor to Glencore’s earnings, dropped 5.3% to 391,300 tons from a year earlier. However production of the red metal from the miner’s sources rose to 1,148,600 tonnes in the first nine months of the year, driven by expansion at its Mutanda and Katanga mines in the Democratic Republic of Congo.

The miner and commodity trader approached Rio Tinto (LON:RIO) in August with a merger proposal that would have created a $160 billion mining and trading giant. Rio rejected the offer, despite estimations that a fusion of both mining giant would up bring them savings of up to $500 million.

Cecilia Jamasmie

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