US coal production dips 11.7pct drop year to date – EIA

Weekly US coal production totaled an estimated 13 million short tons in the week ended July 7, down 11.1% from the prior week and up 4.1% from the year-ago week. Energy Information Administration data showed that this was the highest week-on-week drop year to date, followed by the week ended June 2, which saw a 10% decrease. It was also the second lowest week of production all year, since the week ended January 6.

For the recently-concluded week, coal production in Wyoming and Montana, which is mostly made up of production from the Powder River Basin, totaled an estimated 5.9 million short tons, down 8.6% from last week and down 2.2% compared with the year-ago week.

On an annualized basis, production in the two states would total 335 million short tons, down 4.5% from last year.

In Central Appalachia, weekly coal production totaled an estimated 1.6 million short tons, down 14.1% from last week and up 21% from last year. Annualized production would total 97.3 million short tons, up 6.2% from 2017.

Weekly coal production in Northern Appalachia totaled an estimated 1.7 million short tons, down 13.8% from last week and up 8.2% compared with last year. Annualized production would total 100.5 million st, down 4.3% from last year.

In the Illinois Basin, weekly coal production totaled an estimated 1.4 million short tons, down 16.2% from last week and up 9.1% from last year. Annualized production in the basin would total 102 million short tons, down 1.3% from 2017.

Through the first 27 weeks of the year, US coal production totaled an estimated 389.8 million st, and would total an estimated 750.7 million short tons on an annualized basis, down 3% from last year.

Source: PLATTS

China June coal imports jump 18 percent as utilities speed buying

China’s coal imports in June rose 18 percent from a year ago to 25.47 million tonnes, according to customs data on Friday, as utilities went on a buying spree to shore up electricity generation.

June’s imports also rebounded from 22.33 million tonnes in May, the data from the General Administration of Customs showed, after traders said China relaxed customs checks to let in foreign supplies.

Robust imports led to higher inventories at port and power plants, easing worries that China’s electricity output might not be able to meet surging demand from provinces such as Hebei and Shandong due to hot weather.

Major Chinese cities such as Wuhan in Hubei and Hefei in Henan province last month reported heavy loads on their power grid and indicated that they might started rationing electricity.

In the first half, coal imports rose to 146.19 million tonnes, up 10 percent from a year earlier, data showed.


China June coal output dips to lowest since October

China produced 298 million tonnes of coal in June, down 1.4 percent to an eight-month low, the National Bureau of Statistics said on Monday, as government checks on heavy industry aimed at cutting pollution curbed mining of the fuel.

Year-on-year output was up 1.7 percent, the bureau said.

Output over the first six months of the year reached 1.7 billion tonnes, up 3.9 percent compared with the same period of last year.

In recent months, miners have ramped up output as heatwaves across southern China and strong growth in power consumption in industrial sectors fuelled demand for coal-fired power.

The production of coke used in steelmaking fell 4.7 percent in June to 36.13 million tonnes, with year-to-date output reaching 212.0 million tonnes, down 3.2 percent.


JSW Steel restarts coking coal mining in US

JSW Steel has restarted coking coal mining in the US after a gap of almost three years. Operations in the mines located in West Virginia were suspended after coking coal prices dropped below production cost.

The recent rise in coking coal prices has made it viable for the company to restart production. Though JSW Steel will not import the coking coal produced in the US to India it will provide a financial hedge as it will be sold in the open market.

Seshagiri Rao, Joint Managing Director, JSW Steel, told BusinessLine that the US coking coal mine has started production and the plan is to ramp up production from 2.40 lakh tonne per annum to one million tonnes gradually.

Uptrend in price

Coking coal prices have increased to $200 a tonne from $76 in the last few years. With a strong demand and disruption in supply due to logistics issues there are no chances of it coming down any sooner, he added.

JSW Steel had invested $35 million to set up a prep plant (washery) with a capacity of 2.4 mtpa near the coal mine.

Going ahead, Rao said JSW would source raw coal produced by small miners in the neighbourhood wash it at the prep plant and sell it in the open market to reach the one-million-tonne target.

JSW Steel acquired the concession for nine coking coal mining in the US in 2010. These mines have total resources of 123 million tonnes and estimated reserves of 45 million tonnes in the area where drilling was already done.

Rao said that the company has no plans to restart iron ore mining in Chile that has been under care and maintenance for the last few years.

Global scenario

Dwelling on global plans, he said the Group wants to have 10 mtpa steel production capacity in the US and Europe put together.

“We have taken over 1.3 mtpa rolling facility in Europe for €80 million and will invest another €150-200 million in backward integration to raise its capacity to 1.5 mtpa,” he said.

The Group had already invested $150 million in modernising the existing one mtpa plate and pipe mill and another $350 million was pumped in for a slab making facility to complete backward integration at Baytown in the US.

“We have acquired 3 million tonne hot strip mill with one arc furnace and casting facility for $1 billion. These investments will take our capacity in the US to 4 million tonnes in two-three years, he said.

In all, he added the Group had invested $1.5 billion to reach 5.5 mtpa capacity.


Anil Agarwal says Vedanta, Anglo American could join hands to mine coal in India

Mining majors Vedanta Limited and Anglo American Plc could together mine coal in India. The firms might table joint bids at the next round of auctions, according to a media report.

Billionaire Anil Agarwal is Anglo American’s largest shareholder. Vedanta will reportedly play the role of  a “catalyst” if Anglo American decides to set foot on the Indian subcontinent. “I have told them [Anglo American] that you should look at India also. They are considering participating in coal auctions and are open to other opportunities,”  Vedanta chairman Agarwal told The EconomicTimes.

Talking about his company’s inoperative copper smelter in Tuticorin, Tamil Nadu, Agarwal said that those who have been hit by the shutdown will unite and that “they will do whatever they need to in approaching the government…”

Last week, the Mint reported that Volcan Investments Ltd, the trust controlled by Agarwal, was mulling to acquire control of Anglo American’s South African business. The report claimed that the merger will create an entity worth about $7 billion.

In February 2018, India decided to auction coal blocks to private companies, a move that will end Mumbai-traded Coal India Limited ’s (CIL) near-monopoly status.

In March 2017, Agarwal said he had no plans to buy assets in South Africa from Anglo American, or to push for a board seat after announcing a plan to acquire a 13 percent stake in the mining giant.

He had said that he’d be happy to help Anglo American move into India if they wished “at some point in time to expand their business.”

In February that year, Vedanta held talks with the Indian government on developing clean coal, as coal is “a core part” of India’s energy mix despite its high level of carbon emissions.

Vedanta CEO Tom Albanese said back then that coal is still needed in the global energy mix but that it would be phased out unless carbon capture technology was rolled out more widely. “Unless there is a new technology breakthrough, coal is likely to be phased out over a period of decades,” he told Reuters in an interview.

Carbon capture and storage (CCS) has struggled to get off the ground as firms with limited spending power see no advantage in being the first to work on technology that is likely to become affordable only when developed on a large scale.


Power woes push up coal imports

Coal imports, which had declined over the last four years, are expected to shoot up, with power plants running short on stocks.

Earlier this month, the Union power ministry advised states to consider importing coal for the next 2-3 years to run their power plants.

Many states, including Bengal and Maharashtra, run coal-fired electricity units of their own, besides having public sector NTPC and private power producers.

Officials said that while coal imports were discouraged over the last few years, the norms would be relaxed as stocks at power plants are running out with little chances of them being fully augmented.

Electricity plants have been cutting back on imported coal which they mix with the domestic variety to produce power because of the fall in the value of the rupee and rise in global prices.

However, with India unable to generate the amount of coal needed in the near future, coal ministry officials feel there is no way but to go ahead with larger imports.

Coal import is likely to increase to 145 million tonnes (mt) in 2018 and the uptrend will continue in the next four years, says a report prepared by the Minerals Council of Australia. The imports stood at 137mt last year.

Power units imported 8.64mt of coal in the first two months of this fiscal. Plants, which run solely on imported coal, imported around 5mt, while the ones which mix the fuel accounted for the rest.

“After several years of declining imports, the outlook for thermal coal import demand in India is improving because of strong demand growth and the inability of domestic supply to keep pace,” the report said.

Though one of the cornerstones of the Modi government’s economic policy had been to reduce coal imports, domestic mining has been unable to keep pace with the demand. Last year, India imported coal worth $22 billion. This is expected to go up 20 per cent in the coming years.

Mining plans

Coal ministry officials said they were stepping up plans to auction mines to encourage private mining which may help fill the gap.

“We need to re-energise the sector as Coal India Ltd will possibly not be able to produce 1 billion tonnes by 2020. If we need to have more coal on the table to satisfy demand, private sector participation through auctions to push production is a must,” said officials.

Private power producers have been allowed to switch their existing coal source with alternative mines nearer their plants to reduce time and cost of transportation as well as to ease the pressure on the railways.


Coal India expects 322 million tonne from ongoing projects in FY19

Coal India Ltd on Saturday said as many as 119 major ongoing coal projects are expected to contribute about 322 million tonnes (mt) to its estimated production in the current fiscal. Among ongoing projects, there are operating large projects like Kusmunda Opencast with 50 million tonnes a year (mty) and Gerva Expansion Project with 70 mty capacity.

Out of 65 new projects with a targeted capacity of 247.66 mty, which were identified in 2014-15, about 26 projects having an ultimate capacity of 105.29 mty have been approved. “119 major ongoing coal projects are under implementation…expected contribution of about 322 mt in FY2019 (financial year 2019),” CIL said in a regulatory filing.

According to it, the contribution from the ongoing projects has been planned to reach a level of 378 mt in FY 2020. “Out of these 65 future projects, 26 projects having an ultimate capacity of 105.29 mty have been approved,” the filing said.

The miner, which owned 369 mines with 177 open cast, 174 underground and 18 mixed mines, had produced around 567 mt of coal last financial year. Of which, 536 mt was produced from open caste mines and underground mines contributed 31 mt. CIL said it was operating 15 washeries and of which, there were 4 non-coking coal beneficiation facilities with a throughput capacity of 16.22 mtpa (million tonnes per annum) and 11 coking coal beneficiation units with a capacity of 20.58 mtpa. Future programmes include 18 new washeries with a capacity 95.6 mty, it added.

Source: IANS

Coal prices have remained strong but are set to decline

Coal prices have remained strong but are set to decline

10th july 2018

Coal spot prices have been highly volatile in recent years, with an upward trend since recent lows in April 2018, National Australia Bank says in its latest Mineral & Energy outlook.
NAB further said, Hard coking coal prices rose above US$200 a tonne in mid- June (due to port and rail maintenance issues), while thermal coal prices pushed above US$110 a tonne (the highest level since early 2012). Spot prices for thermal coal may become increasingly important – given the breakdown of the traditional Japanese financial year contract mechanism, with Tohoku Electric Power Co pulling out of negotiations with miner Glencore (the two parties who negotiate the agreement).
According to NAB economists, Asia is the key region for seaborne coal demand – with China, India, Japan and South Korea accounting for almost 60% of global imports in 2017. The growth potential of the latter two is somewhat limited longer term (given the mature nature of their economies), while rapidly growing India is increasing its domestic supply, aiming to develop self-sufficiency in coal supply.
China’s coal import trends have been mixed in 2018. NAB noted that, in the first five months, imports of metallurgical coal fell sharply – down 25% to 22.6 million tonnes, while thermal coal imports rose by 20% to 97.4 million tonnes. In a large part the latter reflected a particularly cold winter (boosting demand across January through March) and poor availability of natural gas.
Short term supply issues have impacted coal markets in recent years – particularly hard coking coal exports from Queensland. A dispute between the privately owned rail operator and the Queensland Competition Authority regarding its regulated maximum allowable revenue between 2017 and 2021 could limit the state’s coal exports in coming years – adding some upside risk to our price forecasts, the report says.
Australia’s total coal exports have increased strongly in the first four months of 2018 – albeit this reflects the recovery from Tropical Cyclone Debbie that severely disrupted metallurgical coal exports in April 2017. Thermal coal volumes rose by 0.8% yoy to 64.8 million tonnes, while metallurgical coal exports rose by 13% yoy to 55.6 million tonnes. That said, metallurgical coal exports remain well below the levels recorded in the first four months of 2014 through 2016.
Coal prices are expected to ease from current levels – as a softening China’s steel sector reduces coking coal demand and supply side concerns ease. We expect hard coking coal prices to average US$186 a tonne in 2018, a decrease of almost 15% (reflecting impact of supply shortfalls in 2017). In contrast, average thermal coal prices are forecast to increase by 12% to US$98 a tonne, the report says.

China to cut coal use, curb steel in 2018-2020 pollution plan

China to cut coal use, curb steel in 2018-2020 pollution plan

10th july 2018

China will cut coal consumption, boost electric vehicle sales and shut more outdated steel and coke capacity in the coming three years, the State Council said in a long-awaited 2018 to 2020 pollution action plan published on Tuesday.
China is in the fifth year of a “war on pollution” aimed at reversing the damage done to the country’s environment since the economy was opened up in 1978, with President Xi Jinping promising to use the full might of the Chinese Communist Party to meet the country’s goals.
The new 2018 to 2020 action plan, released on the country’s official government website, will expand the fight to 82 cities across China, and confirmed that the major coal-producing provinces of Shanxi and Shaanxi have been added to the list of “key” pollution control regions.
The new plan will also cover the heavily industrialised province of Henan in central China, as well as the Yangtze river delta, which includes the provinces of Anhui, Zhejiang, Jiangsu and the region around Shanghai.
The document said the regions of Beijing, Tianjin, Hebei, Shandong and Henan will be required to cut coal consumption by 10 percent over the 2016 to 2020 period, while the Yangtze delta region will have to cut coal use by 5 percent over the period.
It also said no new capacity for steel, coke and primary aluminium production will be allowed in the regions through to 2020, the State Council, or China’s cabinet, said. It will cap steel capacity in Hebei, the country’s largest steelmaking province, at 200 million tonnes by 2020, down from 286 million tonnes in 2013.
China will also take more action to tackle small-scale “scattered” pollution sources, and will work to cut off water, electricity and raw material supplies to firms that violate rules.
To meet its politically important smog targets in northern China last year, the government curbed traffic and coal use, and also imposed “one size fits all” restrictions on industries like steel, aluminium and cement throughout 28 northern cities from October 2017 to March this year.
The cabinet said special anti-smog measures would still be introduced over autumn and winter, but each of the 82 cities would now draw up its own bespoke plan. It also said it would raise gas storage capacity to ensure supplies were sufficient during winter.
The cabinet also set an annual production and sales target for new energy vehicles at around 2 million vehicles a year by 2020 in order to reduce road emissions.

After missing 1st-quarter targets, Coal India is facing criticism yet again

After missing 1st-quarter targets, Coal India is facing criticism yet again

10th july 2018

After missing its first-quarter targets, Coal India is facing criticism yet again as the country’s power plants continue to reel under coal stock shortage. This is even after the coal monolith stepped up production and sales dramatically on a year-on-year basis.
Company sources suggested that the prevalent 10-day coal stock with the power generators in the country against the 22-day stipulated norm is primarily owing to the hydel power sector missing its targets in the first quarter. In turn, to maintain power generation, there was increased pressure on the thermal power segment. This put serious pressure on Coal India.
During April-June, production in the coal-based power segment stood at 248453.54 million unit (mu), which exceeded the targeted production by 1.63 per cent but the hydro-power generators produced 30,510.24 mu, thereby missing the target by 6.54 per cent.
The Maharatna company produced 136.87 million tonne (mt) of coal during April-June this year, which is an increase of 15.2 per cent as compared to the output of 118.84 mt in the similar months of the last fiscal year. Nevertheless, it missed its output target for the given quarter by nine per cent.
On the other hand, coal supplies to power stations grew by 15.4 per cent at 122.84 mt which helped in bringing down the count of power stations having critical coal stocks from 30 (as on April 1, 2018) to 16 backed by an increase in rake loading.
As per company officials, the coal behemoth loaded 217.04 rakes per day on average to the power sector, during April-June 2018 as against 189.9 rakes loaded during the same period last year. The overall rake loading, comprising despatches to power as well as non-power sectors like steel, cement and others stood at 238.8 rakes a day recorded a growth of 9.1 per cent on a year-on-year basis.
Coal India officials are of the view that the shortage of coal in the power plants can be eased once hydel power production picks up in the country and are optimist on account of a good monsoon forecast.
Given the optimism around the monsoon, when coal stocks are poised to ease, the threat of overburden removal, however, haunts Coal India which is already down by over five per cent. Overburden removal refers to the process of removing the topsoil to expose the coal seams for extraction in an opencast mine.
The process becomes more cumbersome during the monsoons. In case Coal India is not ready with exposed coal seams, it cannot step-up production dramatically like it did in the previous year when shortage from renewable power sources, particularly hydel, suddenly led to a power crisis in the country.
So long, although coal stocks remain dismal in the thermal power plants, the country hasn’t yet faced a crisis.
Furthermore, company officials suggested that law and order problems, particularly in the Mahanadi Coalfields, Eastern Coalfields, Central Coalfields and Bharat Coking Coal mining areas are affecting production.
Sector analysts expect the power demand from coal based generators to increase by around five per cent this fiscal year, which wouldn’t be a problem for Coal India to cater to.
However, sources in the company view the targeted production of 610 mt to be “high” and “aspirational” and are of the view that the production growth registered in the first quarter is good and in line with its growth strategy.
In April this year, the coal ministry had appointed KPMG to conduct a study on coal requirements for 2020. Coal India officials expect that 1 billion tonne of the previously targeted production may not be relevant anymore and a revision of target is likely.