January 20, 2022
Issue 401  |  View Past Issues
Published by Global Energy Monitor

Editor's Note

Even though the Indonesian Government has eased the ban on thermal coal exports in January, allowing 48 loaded ships to leave, the shock affects the export market. As the world’s largest thermal coal exporter, the ban has had knock-on effects among the largest importers, including Japan, South Korea, Malaysia, the Philippines and India. The export spot price for thermal coal has spiked once more, now up to over US$220 a tonne, with some importers frantically seeking alternative short-term supplies.

For decades coal exporters and power industries have sold the storyline that coal is a cheap and reliable power source. Indonesia’s ban is just the latest disruption to illustrate how power plants reliant on imported coal are very vulnerable to change. Even if the export ban continues to ease as the power plant stockpiles of the Indonesian utility PLN recover, the ban’s effects will linger. In recent years coal exports have been disrupted by flooded mines, damaged or blocked railways, bushfires, damaged port equipment, and China’s ban on Australian cargoes, to name just a few. Some of these disruptions have had a short-term impact on global prices until supply resumed.

Perhaps the most significant impact is shattering the illusion for countries – such as Vietnam and the Philippines – considering new coal plants predicated on stable supplies and prices. As Vibhuti Garg from the Institute for Energy Economics and Financial Analysis notes, for India, the lesson from Indonesia’s export ban is the importance of reducing the need to import fuel by accelerating the construction of renewables and more flexible solutions, including battery storage and pumped hydro capacity.

Bob Burton


How Indonesia’s coal export ban could impact India

Indonesia’s temporary ban on thermal coal exports illustrates how exposed about 16,000 megawatts (MW) of India’s coal plants are to price volatility and energy security risks, writes Vibhuti Garg for the Institute for Energy Economics and Financial Analysis.

The US coal boom that wasn’t

The long-term trend in US utility generation continues to move away from coal and toward greater renewable energy use, write Dennis Wamsted and Seth Feaster for the Institute for Energy Economics and Financial Analysis.

Villagers oppose land takeover for Adani’s Gondulpara mine

Villagers in India have blocked surveyors from accessing communal lands to begin preparatory work on Adani’s proposed Gondulpara coal mine, writes Geoff Law in Adani Watch.

How a US utility convinced Georgia to let it bury toxic waste in groundwater

Internal government documents reveal Georgia Power went to great lengths to skirt the federal rule requiring coal-fired power plants to dispose of massive amounts of coal ash safely, writes Max Blau in Pro Publica.

Top News

European Commission flags withholding payments to Poland over mine dispute: The European Commission (EC) has warned Poland it is preparing to cut budget payments due to its refusal to follow a September 2021 European Court of Justice (ECJ) order to pay a €500,000 (US$467,000) fine for each day the Turow mine continues to operate. The outstanding fine now amounts to over €50 million (US$57 million). In May 2021 the ECJ directed Poland to suspend operations at the mine until the completion of the legal case brought by the Czech Republic over the cross-border impacts of the mine. Poland said that despite two requests from the EC to pay the outstanding amount, it had no intention of suspending the operation of the mine or paying the fine. The Czech Environment Minister, Anna Hubackova, is reportedly scheduled to visit Poland to negotiate a possible out-of-court settlement. (Bloomberg, Euractiv, Euractiv)

Chinese bank drops out of backing Bosnian coal plant: Sunningwell International has confirmed that the China National Electric Engineering Corporation (CNEEC) has ruled out funding the proposed 700 MW Ugljevik III coal power plant in Bosnia and Herzegovina. In a letter to the UK-based Business and Human Rights Resource Center, Sunningwell stated that “after the decision of the Chinese top leaders to stop financing coal-fired power plants abroad”, CNEEC informed Sunningwell that funding would not be available for the project. In mid-June 2021, CNEEC signed a contract with Sunningwell to build the power plant and associated open-cut mine. (Just Finance International, Global Energy Monitor)

Audit report into Ohio utility finds poor accounting blurs money trail: An audit report commissioned by the Public Utilities Commission of Ohio found it was impossible to tell if funds paid by customers for grid modernisation projects were used to fund FirstEnergy’s US$61 million campaign to support legislators and legislation to bail out two nuclear and two coal plants. FirstEnergy’s funding provided to a ‘dark money’ campaign was used to elect House Speaker Larry Householder and his team to the Ohio legislature and the subsequent passage of the HB6 bill. FirstEnergy agreed to pay US$536 million in fines and refunds as part of a settlement agreement with the US Department of Justice. However, a legislative provision providing subsidies to two coal plants remains in place, with over US$172 million paid by consumers to date. (Akron Beacon Journal, Cleveland.com, Public Utilities Commission of Ohio)

Investigation finds Coal India subsidiary illegally mined areas in Assam: A commission of inquiry has found North Eastern Coalfields (NEC), a subsidiary of Coal India, illegally mined an estimated 48.7 billion rupees (US$65.7 million) of coal in Assam between 2003 and 2021. The 500-page report by Justice Brojendra Prasad Katakey investigated nine areas that the state government had leased out for coal mining, including areas that overlapped with lands designated as existing and proposed reserved forests. His report found leases that had expired in 2003 had been approved retrospectively. He also found some of the mines operated without the consent of the state pollution control board. Justice Katakey recommended the Assam Government recover the entire value of the illegally mined coal from NEC. (Scroll, The Hindu)

Investigation into South African coal mine pollution boosted: Investigators from South Africa’s Department of Forestry, Fisheries and the Environment have joined an investigation into the collapse on Christmas Eve of a tailings dam at the Zululand Anthracite Colliery (ZAC) in KwaZulu-Natal. The mine, owned by the Menar group, operates next to the Hluhluwe-iMfolozi Park and several communities that rely on groundwater and streams for water supply for residents, stock and crops. Ezemvelo, the provincial conservation agency, formally objected in 2021 to ZAC being granted a new water use licence for a new mining shaft just four kilometres from the park boundary. In 2014 ZAC was fined paid 497,000 rand (US$32,320) for illegally operating three mine shafts, including some for up to a decade. (Daily Maverick)

Ukraine ex-President faces charges over coal purchases: Former Ukrainian President, Petro Poroshenko, has returned to the country to face charges over allegations his government spent €48 million (US$54.8 million) in 2014 and 2015 buying coal from companies in Donetsk and Lugansk which were controlled by pro-Russian separatists at war with the central government. Poroshenko, a businessman who Bloomberg ranks as worth US$860 million, suffered a crushing defeat at the 2019 election, losing to a former comedian, Volodymyr Zelenskiy, who campaigned on an anti-corruption platform. Poroshenko’s return to face the charges comes as Russian military forces have massed at the border, leading to warnings an invasion could be imminent. (Bloomberg, Deutsche Welle)


Kosovo: Government suspends bitcoin mining as Kosovo’s lignite-based power system struggles to meet demand.

Thailand: Banpu says it will stick to its plan to boost revenue from renewables and other sectors despite booming coal prices.

US: Missouri regulators allow coal ash dams at Ameren’s 2390 MW Labadie Energy Center to pollute groundwater for the next five years.

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Vietnam: The 1200 MW Hai Phong coal plant owner, the Hai Phong Thermal Power Joint Stock Company, has reported [Vietnamese] a 69.9 per cent decline in net profit in 2021.

Companies + Markets

Indonesia export ban causes shock in export market: Indonesia’s Ministry of Maritime and Investment Affairs said it has permitted 48 loaded coal vessels to leave port after stockpiles at the national power producer PLN increased from three to 15 days’ supply since a ban on exports was instituted on January 1. Japan, South Korea and the Philippines have called for the export ban to be rescinded. Indonesia provided about 45 per cent of the thermal coal in the seaborne market in 2021. Malaysia’s power utility, TNB, plans to reschedule shipments and instead secure short-term supplies from Australia, Russia and South Africa. Since early January, the spot price for thermal coal in the export market has spiked to over US$220 per tonne. (CNA, CNBC, Reuters, South China Morning Post)

Indonesian minister hints domestic market obligation could be scrapped: The Minister for Maritime Affairs of Indonesia, Luhut Pandjaitan, has suggested scrapping the domestic market obligation (DMO) and replacing it with a system requiring the government-owned utility PLN to buy coal at market prices. However, this would drive domestic power prices up. In 2009, the Indonesian Government instituted a DMO setting a percentage of coal production required for sale for local power station use. Coal mining companies supported the DMO when domestic prices were higher than available on the export market. However, the current DMO requirement is to supply 25 per cent of production at US$70 per tonne, less than one-third the current spot price, spurring objections from exporters. Commodity Insights, Commodity Insights)

Glencore completes purchase of Colombian mine: Glencore, the world’s largest exporter of thermal coal, has completed the US$588 million purchase of stakes held by BHP and Anglo American in the Cerrejon mine. BHP and Anglo American, each of which owned a one-third stake in the project, have been seeking to offload their remaining thermal coal projects in response to pressure from financial institutions and shareholders. In 2011 the joint venture partners approved a US$1.3 billion plan to expand mine production and associated port capacity from 32 million tonnes to 40 million tonnes a year. The project has been affected by legal action over attempts to divert a river for mine use and controversy over the relocation of affected communities. Cerrejon is Colombia’s largest thermal coal mine but declining US and European demand has undercut production. (Mining Weekly, Global Energy Monitor, Glencore)

South African Energy Minister promotes role for coal in a just transition: South Africa’s Minister for Mineral Resources and Energy, Gwede Mantashe, has dismissed the suggestion a just transition should be about a shift from coal to renewables but argued it should “experiment” with “clean coal technologies.” In his speech to the South African Youth Economic Council’s Energy, Mantashe dismissed the COP26’s push to phase out unabated coal generation as one reliant “on technologies that are yet to be developed,” which he described as “reckless and, at worst, dangerous.” Referring to the divestment of coal ownership to black-owned businesses, Mantashe said “we have a duty to protect that sector, grow it and make it make an impact on society.” (Daily Maverick)

Vanguard outlines limited coal policy: The Vanguard Group, which is the world’s second-largest asset manager with an estimated US$90 billion invested in thermal coal stocks, has acknowledged the risks to the global climate from continued coal burning and the risk of stranded assets for companies reliant on thermal coal. Rather than proposing it divest from these companies or pressing them to retire assets, Vanguard said it would push company boards to detail how thermal coal would remain relevant to their customer base “over 10, 20, and 30 years”. Vanguard stated it “may” vote for shareholder proposals on climate issues or against directors who it considers have failed to evaluate climate risks. A June 2021 report by the Institute for Energy Economics and Financial Analysis noted Vanguard has overwhelmingly voted for the positions favoured by company management and opposed climate resolutions. (Vanguard)

BlackRock CEO makes no new coal commitments in his annual letter: In his annual letter to shareholders, the CEO of BlackRock, Larry Fink, has defended the fund’s approach on climate policies as being about long-term financial benefits but made no new coal or climate commitments. BlackRock is the world’s largest asset management firm with over US$10 trillion in assets under management and has an estimated US$85 billion invested in coal companies, over a quarter of which is in companies planning to expand their coal business. BlackRock’s Big Problem, an international coalition of NGO groups, said BlackRock has failed to implement coal exclusion measures announced in Fink’s 2020 letter. A report on the firm’s 2030 emissions reduction target, which was due to be published by the end of 2021, has not yet been released. (Guardian, BlackRock's Big Problem, BlackRock)


Global Steel Production Costs: A country and plant-level cost analysis, TransitionZero, January 2022. (Pdf, registration required.)

This 35-page report analyses steel production costs in the major steel-producing countries for 2019–2021.