Russia boosts coal exports as Western sanctions yet to bite
Russia’s seaborne exports of coal since the invasion of Ukraine have increased despite sanctions imposed by the European Union and Japan, with India and Turkey taking up the slack, writes Clyde Russell for Reuters.
‘No one wants to risk getting trapped’: In war, dangers multiply for Ukraine’s miners
Russia may soon seize the coal mines in the eastern region of Donbas as its military relentlessly pushes further into Ukraine, writes Nabih Bulos in the Los Angeles Times.
Delays to hit Adani’s Godda power station for another year
Adani’s under-construction Godda power plant in India is at least a year behind schedule. Some observers suggest the company’s new target date for completion of December 2022 is overly optimistic, writes a special correspondent for AdaniWatch.
Alaska to retire one of its two remaining coal units
The Golden Valley Electric Association (GVEA) has decided to retire its 62 megawatt (MW) Unit No 2 at the Healey Power Plant in Alaska by December 31, 2024. The US$300 million coal unit was commissioned in 1997 but, after technical and safety problems, was mothballed between 1999 and 2016. Even after restarting, further technical problems were encountered. “It was a rough birth and a rough childhood and a disgraceful older age,” said Tom DeLong, the chair of the board of GVEA. The association also announced that rather than close the 28 MW coal-fired Unit 1 it will spend US$26.1 million to install pollution control equipment to cut nitrogen oxide emissions to comply with an agreement with the US Environmental Protection Agency. GVEA will issue a request for a proposal for a “large scale” wind farm power purchase agreement within 90 days. GVEA also plans to install a battery of at least 46 MW /184 MW-hour capacity. (Anchorage Daily News, Golden Valley Electric Association)
Study finds reduced pollution would boost Chinese agriculture: A recent study published in the journal Science Advances found that crops in parts of China are exposed to the world’s highest levels of nitrogen oxides, a pollutant produced by burning fossil fuels. Nitrogen oxides are known to damage crops directly by inhibiting photosynthesis and indirectly by promoting ozone formation. The study estimated that slashing nitrogen oxides emissions could raise yields in China by about 25 per cent for winter crops and 15 per cent for summer crops. The study found the next highest crop exposures to nitrogen oxides were in India and Western Europe, where it estimated crop yield could increase by about 10 per cent with significant emissions reductions. (Science Advances)
Poland proposes suspension of limits on coal for home heating: The Polish Ministry of Climate has proposed suspending a ban on the sale of low-quality coal for home heating for 60 days, seeking to justify the change because the impact of prices and availability caused by Russia’s invasion of Ukraine would adversely affect homeowners. The European Environmental Agency estimates that about 47,000 people die every year due to poor air quality in Poland, primarily due to the use of low-quality coal for home heating and power. Anti-smog NGO Polski Alarm Smogowy said the proposed changes were “scandalous” and that “Poland’s air quality will drastically suffer and so will the health of all those breathing it.” The proposed changes are part of a broader pushback by some municipal authorities against measures to improve public health by restricting the use of low-quality coal for home heating. (Reuters, Polski Alarm Smogowy [Polish])
US Supreme Court seeks to limit EPA’s powers on power plants: A Supreme Court of the United States ruling in the case of West Virginia v. Environmental Protection Agency (EPA) will narrow the ability of the EPA to regulate greenhouse gas emissions from coal power plants. Chief Justice John Roberts, writing for most of the court, stated that a decision to transition away from coal power generation “rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.” The Sierra Club stated the decision “eliminates EPA’s most effective tool” for cutting greenhouse gas emissions from power plants. The ruling was less sweeping than many feared but is viewed as an indication the court would limit executive action to where Congress has given federal agencies specific power to propose regulatory measures. The decision will likely narrow the available regulatory options for the Biden administration, which has been blocked from adopting strong climate legislative measures by West Virginia Senator Joe Manchin. (AP News, Pro Publica, Sierra Club)
UK’s climate advisor says Cumbria coal mine “absolutely indefensible”: Lord Deben, the chair of the Climate Change Committee (CCC), the UK Government’s climate policy advisory body, described the proposed Whitehaven metallurgical coal mine as “absolutely indefensible.” Deben said the bulk of the coal produced was for export and would not affect the domestic energy cost. Cumbria County Council approved the mine in October 2020, but after the CCC advised against the project, the government directed the Planning Inspectorate to review the project. The Communities Secretary, Michael Gove, was due to announce his decision by July 7. Prime Minister Boris Johnson indicated his support for the project telling parliament on June 22 that the UK should not be importing metallurgical coal “when we have our domestic resources.” Since then, Johnson’s future has become uncertain, with growing calls for him to resign over a domestic political scandal and the resignation of Cabinet members. The government said the announcement of the decision has been delayed and later that day Johnson sacked Gove. (BBC, BBC)
Pressure grows to release jailed Vietnamese environmentalists: The US, Britain, Canada and a range of NGOs, including the Climate Action Network and Oil Change International, have called on the Vietnamese Government to unconditionally release from prison the director of GreenID, Nguy Thi Khanh, and three other environmentalists. Khanh was sentenced to serve two years in jail, with three others – Mai Phan Loi, Dang Dinh Bach, and Bach Hung Duong – sentenced to between two and a half years and five years. All were convicted on charges of tax evasion. Andrea Giorgetta, the director of the International Federation for Human Rights Asia Office, said the jailing of the four represents “a worrying escalation by Hanoi in the repression of civil society.” (Radio Free Asia)
Report finds no ‘high risk’ coal mines have been cleaned up since 2009: A Human Rights Watch (HRW) report found that the South African Government has failed to address health and environmental impacts, such as acid mine drainage, from abandoned coal mines. The report argues that residents receive little basic information, such as water quality data, from government agencies, leaving communities exposed to polluted water. HRW says that the Department of Mineral Resources and Energy has failed to enforce clean-up standards on mining companies. A report in 2021 by South Africa’s auditor general found none of the coal mines classified as posing a “high risk” to surrounding communities and the environment has been cleaned up since 2009. (Human Rights Watch [Pdf])
Bird feathers from near Australian coal ash dams reveal heavy metals: Over half of 44 bird feathers collected by Hunter Community Environment Centre researchers downstream from ash dams at the five New South Wales coal plants had high concentrations of heavy metals – arsenic, cadmium, mercury, selenium and lead – at levels that could affect the health and reproductive success of the birds. Analysis of the feathers found metal concentrations in samples from Lake Liddell were acutely toxic, with potentially fatal concentrations in black swan and cormorant feathers. The centre is calling for the NSW Environment Protection Agency’s investigation into the impacts of coal ash to be widened to include an assessment of the health effects on birds from bioaccumulation of heavy metals. (ABC News, Hunter Community Environment Centre [Pdf])
Australia: South Korean company Daelim signs an offtake agreement for urea from the proposed Leigh Creek coal gasification project in South Australia.
Australia: Bushfire Survivors for Climate Action launched a legal challenge against the approval of Whitehaven Coal’s proposed expansion of the Narrabri coal mine.
Bangladesh: Prime Minister flags likely load shedding as power utilities can’t afford the high cost of imported coal and other fossil fuels.
Canada: Cabin Ridge, a Canadian mining company, has filed a C$3.4 billion (US$2.6 billion) legal claim against the Alberta Government’s decision to block coal exploration on the eastern slopes of the Rocky Mountains.
Czech Republic: State-owned mining company OKD to extend its hard coal mining until at least the end of 2023 and possibly 2025.
India: State-owned BHEL agrees to pay damages for two substandard 250 MW boilers commissioned in 2011 by the state-owned lignite power producer NLC India.
UK: The Coal Action Network will proceed with a legal challenge against the Welsh Government’s decision to allow production of 40 million tonnes of coal from the Aberpergwm colliery.
US: BSNF coal train derailment in Nebraska has destroyed a rail bridge and rendered the line inoperable for three weeks.
Outlook unclear for Russian coal exports: The Australian Government’s Department of Industry, Science and Resources (DISR) estimates Russian exports of metallurgical coal may fall by at least 5 million tonnes per year by mid-2023 as Europe’s ban takes effect in August. Japan has also announced a ban on Russian coal but has not yet provided details of when it will take effect. Russia previously exported 10, 7 and 5 million tonnes of metallurgical coal to Ukraine, Europe and Japan, respectively. DISR also estimates rail capacity constraints are likely to limit the ability of Russian thermal coal exporters to divert production from the European market to ports on the east coast. In 2021 Russia exported 48 million tonnes of thermal coal to Europe and Ukraine and 16 million tonnes to Japan. The department notes that while Russian coal production currently “remains highly profitable”, potential buyers include China, India, and South and Southeast Asia. Despite these potential alternative markets, DSIR estimates that Russian thermal coal exports may fall by at least 12 million tonnes in 2022. (Australian Department of Industry, Science and Resources [Pdf])
Polish PM pitches for lowering and capping EU carbon price: In an opinion column in the Financial Times, the Polish Prime Minister, Mateusz Morawiecki, has proposed reducing the cost of the European Union’s carbon dioxide emission allowances to €30 (US$30) per tonne “for at least one year, with the possibility of extending it for two.” Poland, which has long opposed the European Union’s climate policies, claimed that lowering the emissions price, which is currently about €90 (US$94) per tonne, would lower electricity prices and inflation. Morawiecki also claimed the high EU emissions price “make[s] it difficult for manufacturing companies to invest in the development of new green technologies, such as renewable energy or hydrogen.” Poland, which currently generates about 70 per cent of its electricity from coal and lignite, is promoting increased use of forests for biomass energy and supports the development of offshore wind projects but restrictions introduced in 2016 effectively blocked the development of onshore wind farms. The Polish Cabinet has reportedly agreed to soften the restrictions to allow onshore wind farms if they are at least 500 metres away from a residential building. (Financial Times, Reuters)
Afghanistan hikes export price after Pakistan announces import plan: The Taliban government in Afghanistan increased the export price of coal from US$90 per tonne to US$200 per tonne just hours after Pakistan’s Prime Minister, Shehbaz Sharif, announced plans to import coal for the shuttered 1320 MW Sahiwal and 1320 MW Hub power plants. An anonymous Pakistan Government official estimated that coal imports from Afghanistan could increase from 3000 tonnes per day to 20,000 tonnes per day once coal storage was established at the railheads at Kundian in Mianwali district, Sibi in Balochistan and Khushhal Kot near Peshawar. Pakistan is looking to Afghan coal after power utilities could not afford to buy thermal coal from the seaborne market after global prices soared as high as US$400 per tonne. (Dawn, News International)
Coal Ministry proposes increased privatisation of Coal India subsidiaries: India’s Ministry of Coal has proposed the sale of a 25 per cent stake in two Coal India subsidiaries: its mining consulting unit, the Central Mine Planning and Design Institute, and its coking coal division, Bharat Coking Coal. An official said the sales of Coal India’s main coal-producing units – Central Coalfields, Eastern Coalfields, Mahanadi Coalfields, Northern Coalfields, South Eastern Coalfields and Western Coalfields – are likely to follow. The anonymous official said the government is keen to capitalise on the current high valuations of coal at a time private investors may still be interested in buying coal stocks. In October 2010, the Indian Government sold an initial 10 per cent stake of Coal India, with subsequent tranches reducing public ownership to 66.13 per cent. In the year to the end of April 2022, Coal India produced 777 million tonnes of coal. (Mint [paywall])
Mongolian exports to China tipped to rebound as restrictions ease: Mongolian metallurgical coal exports have doubled from 400 truckloads per day in May to 800 truckloads per day in June as Chinese COVID-19 border restrictions have been eased. Data from the investment bank Founder CIFCO indicated that the bulk of the traffic was through the Ganqimaodu and Mandura border ports in Inner Mongolia. With the continued ban on Australian cargoes, Mongolia has become China’s largest supplier of metallurgical coal. Chinese coal producers expect domestic metallurgical coal production will remain constrained for the next three to five years until new mines are commissioned. The Australian Government’s Department of Industry, Science and Resources estimates Mongolia’s metallurgical coal exports may increase by one-third from 2021 to 30 million tonnes by 2024. (S & P Global, Department of Industry, Science and Resources [Pdf])
South African agency seeks to confiscate coal assets: South Africa’s National Prosecuting Authority (NPA) has applied to the Pretoria High Court seeking permission to sell the Optimum Coal Mine and confiscate Tegeta Exploration and Resources’ shares in the mine and coal terminal. Tegeta Exploration and Resources is a Gupta-family company named in the Zondo Commission of Inquiry into state capture. In an affidavit, the NPA’s deputy national director of public prosecutions, Ouma Rabaji-Rasethaba, said the Guptas and Mr Salim Essa conspired with Eskom and government officials “to perpetrate acts of fraud and other crimes in order to buy the Optimum Coal Mine” and that the purchase of the mine was, therefore, a crime too. The NPA argued the purchase of the mine had been funded “from at least four demonstrably unlawful sources.” In earlier proceedings, the NPA’s senior counsel, Matthew Chaskalson, described how the Guptas used the mine “as an industrial-strength money-laundering machine” to launder “offshore Gupta proceeds of crime.” (Eyewitness News, Daily Maverick)
Indonesia delays the start of a carbon tax on coal power plants: For the second time this year, the Indonesian Government has delayed the commencement of a carbon tax that would have included coal power plants. The carbon tax was initially due to start in April and then July 1 but has been delayed again with no new commencement date announced. The government attributed the change to current global economic conditions and the “need to perfect our carbon market scheme”. Industry lobby groups, including the Indonesian Coal Mining Association, had complained the scheme was “rushed” and the impact on coal companies and electricity consumers was unclear. In 2021, the Indonesian Government ran a carbon pricing trial for 32 coal plants but with a price of only 30,000 rupiah (US$2) per tonne. While the price was criticised as too law, the government adopted it for the proposed scheme. The International Institute for Sustainable Development had proposed a coal tax of 78,700 rupiah (US$5.50) per tonne as an interim measure. (Nikkei Asia)
Resources and Energy Quarterly: June 2022, Department of Industry, Science and Resources, July 2022. (The thermal and metallurgical coal chapters are here and here [Pdfs].)
The Australian Government’s quarterly assessment provides concise overviews of key trends affecting production and prices in the seaborne thermal and metallurgical coal markets.