December 20, 2018
Issue 259  |  View Past Issues

Editor's Note

In many ways South Africa has long been a poster child for promoters of coal power: a country overwhelmingly reliant on coal power and one of the world’s largest coal exporters. Huge new coal plants were approved and Eskom appeared to control energy policy-making. In the last two years Eksom’s standing has collapsed. Blackouts, its steadfast refusal to comply with pollution standards, a seemingly endless series of corruption scandals and its dire financial position have combined to leave Eskom politically isolated. This week South Africa’s President Cryril Ramaphosa appointed a panel of experts to propose a plan to overhaul the utility.

More broadly, the global coal sector faces growing challenges. The conservative International Energy Agency has once more downgraded its forecast for global coal demand and for the first time ever projected a small decline in its latest six-year forecast. The European Bank for Reconstruction and Development has ruled out funding for new coal plants or thermal coal mines. Canada has announced funding for the establishment of an energy transition centre at the World Bank while Israel has become the latest country to join the Powering Past Coal Coalition. In Australia, the country’s peak science agency has found significant flaws in Adani’s draft water management plan for the Carmichael mine. In Canada, Teck has revealed it may face federal charges over water pollution from its coal mines.

However, in some countries, taking a stand against coal pollution comes with a personal cost. In Kenya, a new report documents the harassment of critics of a proposed Chinese-backed coal plant near the Lamu World Heritage site.

CoalWire will take a short break and return in mid-January.

Bob Burton


How foul air in India is putting people’s lives in danger

Federal and local governments have done little despite warning signals for several years that Indian cities were exposed to alarming pollution levels, writes Murali Krishnan in Deutsche Welle.

Global bankers spurn Trump’s pleas to keep making loans for coal

Despite all the efforts of President Donald Trump to boost international funding for new coal projects, the US is struggling to have much impact on international lenders, write Jennifer A Dlouhy and Jeremy Hodges in Bloomberg.

Top News

European Commission sets 2025 deadline for most coal plant subsidies: In negotiations over European Union electricity market rules, European Commission negotiators agreed to end financial support by 1 July 2025 for existing coal and other fossil fuel power stations emitting over 550 grams of carbon dioxide per kilowatt hour. However, Poland successfully argued for a "grandfathering" provision which exempted all contracts approved before 31 December 2019 with energy generators under the country’s capacity scheme. Environmental groups criticised the provision and fear a scramble to award contracts over the next year. The grandfathering clause potentially throws a lifeline to the proposed 1000 megawatt (MW) Ostroleka C plant in Poland. (Euractiv)

Court asked to punish Eskom over coal deal with Gupta company: The Special Investigating Unit (SIU), a South African Government agency tasked with recovering financial losses caused by corruption and maladministration, has asked the Pretoria High Court to declare the 3.7 billion rand (US$257 million) coal supply agreement between Eskom and Tegeta Exploration and Resources as “unlawful and invalid”. Tegeta, a Gupta-family company, is under administration after the Gupta family left South Africa in May 2018. The SIU has also requested punitive damages be awarded against both Eskom and Tegeta “given the disgraceful conduct evidenced in this application, and the pervasive corruption, abuse, lack of candour and nondisclosure.” (City Press)

Israel joins Powering Past Coal Coalition: Israel has become the 28th country to join the Powering Past Coal Alliance and has pledged to phase out its two coal plants by 2030. Since 2015 coal use at Israel Electric Corporation’s (IEC) two coal plants has been cut by 25 per cent. IEC had previously committed to a 2022 closure date for four units at the Orot Rabin coal power station which have a combined capacity of 1500 MW. However, the closure of the remaining 1150 MW of capacity at the Orot Rabin plant and the 2250 MW Rutenberg plant has been the subject of debate between the government and IEC. In its latest financial statements IEC stated it expects a gradual reduction in coal generation between 2025 and 2028 with the final coal units closed between 2028 and 2030. (Reuters, Israel Electric Corporation)

Report reveals harassment of Kenyan critics of Chinese-backed coal plant: A report by Human Rights Watch (HRW) and the National Coalition of Human Rights Defenders, a Kenyan NGO, reveals that in the last five years 35 campaigners critical of the proposed Lamu coal plant have been subject to harassment. The 1050 MW Lamu plant has been proposed by China Power Global but is being challenged in Kenya's environmental court. Ishaq Abubakar from Save Lamu said critics of the project have been arrested, harassed, beaten and tear-gassed. HRW also accuses Kenyan security agencies of restricting access to public meetings on the project. (Voice of America, Human Rights Watch)

Adani water plan found to be flawed: A review of Adani's draft Groundwater Dependent Ecosystem Management Plan, which is required before the proposed Carmichael coal mine can proceed, has raised concern about the potential impact of water draw down on the nationally important Doongmabulla Springs. The CSIRO, the Australian Government’s peak science agency, also raised concerns that data from water bores cited by Adani in their draft plan has not been verified. The report modelled impacts on groundwater from seven of the 17 proposed mines in the Galilee Basin and found that the cumulative impacts would “extend farther than previously predicted from impact assessments of individual mines.” (ABC News, Guardian)

Teck flags Canadian mines may face legal action over pollution: In its latest quarterly report, mining company Teck Resources revealed that it has been notified by federal prosecutors that it could be charged with breaches of the Fisheries Act over selenium and calcite pollution from its metallurgical coal mines in the Elk Valley. Teck warned investors that while no charges have been laid the financial impact of any fines “may be material.” The company also acknowledges that water treatment will be required for “an indefinite period” after the mines have closed. Teck, which plans to produce about 26 million tonnes of metallurgical coal this year from its Elk Valley mines, is the world’s second largest exporter of metallurgical coal. (The Narwhal)


Australia: Second hearing into proposed coal mine suspended after panel member declares conflict of interest.

Australia: Mitsubishi exits thermal coal by selling its stakes in two thermal coal mines to Glencore.

Brazil: Chinese companies seek role in coal gasification hub proposed by Rio Grande do Sul state.

Hungary: In Borsod-Abauj-Zemplen county, home heating with local lignite causes breach of EU pollution limits.

India: Meghalaya state government seeks to bypass National Green Tribunal ban on ‘rat-hole’ coal mining.

Macedonia: Government proposes a law to ban coal use for home heating in pitch for financial assistance to cut air pollution.

US: In mid-November a Republican senator proposed a bill to provide loans to new domestic coal plants.

US: Report reveals groundwater contamination at 11 out of 12 of Georgia’s coal power plants.

US: Californian state attorney and a coalition of groups join Oakland Council appeal against a federal judge’s ruling overturning ban on the transportation and handling of coal.

“However higher [coal] prices aren’t triggering new investments. Risks associated with climate policy, potentially stranded assets, local opposition and the memories of the last downturn have cooled investor appetite to invest in new production. It appears that banks, insurance companies, hedge funds, utilities and other operators in advanced economies are exiting the coal business,”

states the International Energy Agency in its Coal 2018 report.

Companies + Markets

South African President appoints panel to devise Eskom rescue plan: South African President Cyril Ramaphosa has appointed an eight-person panel to propose strategies to address the financial and operational challenges facing the publicly owned utility. The wide-ranging brief for the panel includes options to resolve the utility’s debt load, review global energy trends and “the appropriateness of the current Eskom business model and structure.” Eskom, which has been beset by a raft of corruption scandals and plant breakdowns, recently proposed the government take on part of its debt. The utility is struggling to finance the construction of the new Medupi and Kusile coal plants with its electricity sales hit by flat electricity demand. (TimesLive, EyewitnessNews)

IEA reduces coal demand forecast again: For the first time the International Energy Agency’s (IEA) annual coal market report’s six-year forecast projects a small decline in coal demand by 2021. Traditionally the IEA’s annual coal report has been bullish on the future of coal. The IEA estimates global coal demand grew by 1 per cent in 2017 though consumption was still lower than the 2014 peak. The IEA acknowledge that clean air policies will constrain coal demand in China but estimates continued growth in India and Southeast Asia. (CarbonBrief, International Energy Agency)

New European bank energy strategy excludes coal power and thermal mines: The European Bank for Reconstruction and Development’s (EBRD) energy strategy for 2019–2023 states that in order to support “climate goals and air quality concerns” the bank will “no longer finance thermal coal mining or coal-fired electricity generation capacity”. The bank stated that it will “focus on scaling-up renewable energy” but will “support the gas sector” during the strategy period “where it is consistent with a low-carbon transition.” Oil Change International welcomed the bank ruling out support for new coal projects but pointed out that that since it released it 2013 energy strategy EBRD has not financed any new coal plants. (European Bank for Reconstruction and Development, Oil Change International)

Canada funds World Bank coal transition support centre: Canada will provide C$275 million (US$204 million) to the World Bank for the establishment of an Energy Transition and Coal Phase-Out Programme. The programme aims to assist countries in Asia to increase low-carbon energy, boost energy efficiency and reduce coal production. The UK Government also committed £20 million (US$25 million) to fund a World Bank programme to assist low- and middle-income countries to implement low-carbon energy strategies. (Economic Times)

Call for McKinsey to be banned from US coal bankruptcy case: A lawyer for the US Trustee, a part of the US Department of Justice, has argued that McKinsey should be blocked from providing advice to Westmoreland Coal’s debt restructuring plan as it is also a creditor and has failed to declare its conflict of interest. In November, a lawyer for the US Trustee requested McKinsey be ordered to return fees it was paid in a separate coal company bankruptcy case after allegedly failing to disclose potential conflicts. In 2017 controversy over McKinsey’s work for South African utility Eskom forced the company to offer to repay almost 1 billion rand (US$70 million) in fees. (Fortune)

Australian subsidiary of Indian company suspended from trading over valuations: Wollongong Coal, a subsidiary of the Indian company Jindal Steel and Power, has been suspended from trading on the Australian Stock Exchange (ASX) after the Australian Securities and Investments Commission (ASIC) queried the company’s valuations of its Wongawilla and Russell Vale coal mines at A$385 million (US$277 million) and A$390 million (US$281 million) respectively. The company has been embroiled in a long-running controversy over its plan to restart and expand its Russell Vale underground mine in Sydney’s water catchment in January 2019. Critics of the company’s mining plans have argued the mines have been overvalued. The company, which requested its suspension from the ASX, stated that it expects resolving ASIC’s query to take “at least” 4 weeks. (Illawarra Mercury, Wollongong Coal)

World Bank report estimates US$35 billion a year toll from coal on India: A new World Bank report estimates distortions in the Indian power sector cost an estimated US$86.1 billion in 2015–16 with health impacts and the external costs of global warming accounting for an estimated US$35.4 billion a year. “The greatest source of waste is excessive coal-fired power generation, which leads to substantial health and environmental damages,” the report stated. The report also warned that non-performing power sector loans “threaten the stability of India’s financial sector” but the costs could not be quantified due to the lack of data. (Economic Times, Economic Times)


Managing Coal Mine Closure: Achieving a Just Transition for All, World Bank, December 2019. (Pdf)

This 33-page report reviews identifies strategies to minimise social and economic disruption from coal mine and power plant closures.

Georgia at a Crossroads: Groundwater Contamination from Coal Ash Threatens the Peach State, Earthjustice and the Environmental Integrity Project, December 2018. (Pdf)

This 32-page report finds that, based on official data, coal ash pollutants from 11 of Georgia’s 12 coal-fired power plants are leaking into groundwater.

Lignite coal - health effects and recommendations from the health sector, Health and Environment Alliance, December 2018. (The briefing is also available in German and Turkish.) (Pdf)

This 24-page report provides an overview of the health impacts of lignite and hard coal power generation with a specific focus on particularly polluting coal power plants in Turkey, Germany, Poland and Bosnia and Herzegovina.

“Poland’s deadly addiction to coal”, Guardian, December 16, 2018.

A photo essay on the problems of coal plant pollution and the challenges of a coal phase-out in Poland.