Event Profile

India Coal 2010 is an international conference, which focuses on various activities in the Indian coal sector, such as supply, world trends, pricing, policy, import, logistics, equipment, technology and divestment. It will provide a perfect platform for industry players, academicians, researchers and decision makers from government from various countries in this field to network and exchange expertise. The 2nd Annual International Conference India Coal 2010 will discuss the techniques and strategies, which can be helpful in tackling the regional and functional issues faced by the coal sector. India Coal 2010 conference will cover a broad range of pertinent topics under the key theme “Towards Power,Productivity,Technology&Resource Enhancement”.

Visitor Profile

The targeted visitors at the 2nd Annual India Coal 2010 Conference are: Coal Producers, Exporter, Brokers, Traders, Importers, Sales Organizations, Metal and Steel Producers Consuming Coal, Cement Manufacturers, Equipment Manufacturers, Analysts Covering Metal, Steel Companies, Power Companies & Coal Producers, Logistics and Shipping Providers for the Industry, Railroads Transporting Coal, Technology Providers, Financial Services Professionals, Government and Regulatory Bodies, Industry Associations/Institutions, Coal Consultants and R & D Professionals, Environmental Awareness Bodies, Alternative Sources of Energy Provider, Risk Managers, and Commodity Surveyors.

Organizer ASAPP Media Information Group, New Delhi, India.

Deepti Mishra

Head – Events Production
H/P: +91-9833015014
Deepti@ASAPPmedia.com 
www.ASAPPmedia.com

Shanghai – China will be a net importer again as it shuts unsafe mines and the economy grows, Fang Junshi, the director general of NEA’ coal department, said in Beijing. Illustratively, China imported over 44.41 million metric tons in the first quarter, 230% greater compared with 2009 Q1.

Regardless of the coal price increase, China is expected to be a long-term buyer of foreign coal. The first reason is strong demand from energy sector. In the first quarter, according to the National Energy Board data, China electricity consumption was 969.5 billion kwh, up 24.2 percent. Secondly, Qinhuangdao coal stocks have reduced below 5 million-metric-ton in April on average. Thirdly, power generators’ coal stocks level is relatively low. Four major power companies only have four days coal reserve on average. As the summer is arriving, power companies will need to increase coal stocks urgently. Last but not least, Li Jing, the Managing Director of JP Morgan believed that the drought in the south China caused less hydro power. Resultantly, China increased import from Indonesia and Vietnam.

In addition, China domestic coal supply is also a problem. The recent national safety check and coal mines integration also worsen the domestic coal supply. The government has issued strict regulations in securing mines safety, this national check will continue in May. Most small coal mines under 3 million-metric-ton were temporarily shut down.

China traders and end-users are very keen to developing import channels. Illustratively, a large number of China coal players have registered for 2010 Coal Trading & Investment Outlook, which is organized by Attention Global and takes place on 22 & 23 July in Guangzhou. A few representative attendees are from Lanyue Energy Group, Nobel Resources, GD Power, China Century Cement etc.

The organizer expects to set the platform for overseas coal supplier and China coal buyers. Business meetings, trading deals, and insights sharing are all themes of the event. The event’s honored delegate Mr. Lan Wenbin, the General Manager of Lanyue Energy Group would suggest Guangdong be the strategic coal reserve for China. If this suggestion is accepted by Beijing, it would certainly further boost foreign coal import.

Positioned as ‘ Mapping Global Coal Market ’, the event is announcing the China Moment.

Contact

Andy Wang

Tel: +86 21 5291 2716

Email: andy.wang@attention-global.com

Website: http://www.attention-global.com/coal/index_en.html

Citic Resources Holdings Ltd. (1205.HK) said Wednesday its stake in Australian coal miner Macarthur Coal Ltd. (MCC.AU) remains a long- term investment for the company, despite the Australian government’s proposed new tax on the mining sector.

“Australia’s proposed resources tax will have an impact on mining firms,” Chief Executive Sun Xinguo told reporters in Hong Kong after a shareholders meeting. “We will find out the impact on our business after examining more of the details of the tax plans,” he said.

Citic Resources and state-run parent Citic Group are the largest shareholders in Macarthur Coal, the world’s biggest exporter of pulverized coal by volume, with a combined stake of 22.4%.

Citic Resources’ shares are down 13% this week as investors factored in lower earnings for its Australian investment after the Australia government said Sunday it planned to introduce a 40% tax on the mining industry’s profits. The benchmark Hang Seng Index is down 3.7% this week.

The company’s shares ended down 3.6% at HK$1.62 Wednesday, compared with a 2.1% decline on the benchmark index.

Asked whether Citic Resources will support Peabody Energy Corp.’s (BTU) takeover bid for Macarthur Coal, Sun said the company has nothing to add to the statement it made last month, in which it said it hadn’t yet decided whether to back the bid.

U.S. coal company Peabody Energy sweetened its takeover offer for Macarthur Coal to A$4.07 billion in April but investors are concerned it may now try to lower the price after Australia proposed the new mining taxes.

Peabody, the world’s dominant producer of coal for use in blast furnaces, told Macarthur this week it was working through the impact of the tax plans on its bid for Australia’s biggest coal exporter.

Citic Resources also operates an aluminum smelter in Australia, and produces manganese in China’s Guangxi province and in Gabon, West Africa. By Yvonne Lee, Dow Jones Newswires source : nasdaq

Karnataka Power Corporation Ltd (KPCL), the state-owned power generator, is exploring the possibility of acquiring a coal mine in Indonesia. The company, which presently imports small quantities of coal from Indonesia, is in the process of reducing its dependency on the Indian coal, which is high in ash content, a top company official said today. On an average, KPCL requires 7.2 million tonnes per annum to generate close to 2,000 MW. The company is adding a further 1400 MW within the next three years.

“Last year, KPCL imported around 900,000 tonnes of coal from Indonesia and this year also the same quantity will be imported to fire our power projects at Raichur and Bellary. The Indonesian coal provides higher calorific value and less in ash content. We are presently mixing the imported coal with the domestic coal and firing our boilers,” S M Jamdar, managing director, KPCL told reporters.
He said KPCL intends to increase the quantity of imported coal over the coming years as it has a higher calorific value, which is more efficient in heating up the boiler. The Indonesian coal contains 6,000 kilo calories per kg of coal, whereas Indian coal has a maximum of 4,500 kilo calories. At present, KPCL’ power plants can take only up to 5 per cent of imported coal.

“We are definitely trying, but there are some difficulties. We already own a coal field in Nagpur, which is giving us 7,000 tonnes of coal every day. We definitely are interested in imported coal. There are some serious problems with the imported coal, he said.

The existing boiler designs of Indian power stations cannot take foreign coal fully. We have to blend it up to 25 per cent. Because boilers are designed according to the heat bearing capacity and foreign coal is extremely good in heat bearing capacity,” he said.

The future thermal power projects will be built in such a way that they will be able to take more quantity of foreign coal, he added. source business-standard.com

Coal India Ltd is on the verge of closing a deal with US-based miner Peabody Energy that would give it a stake in four Australian coal mines along with other overseas assets.

According to the ‘The Age’ report recently, the Indian company has said that it was in the advanced stages of negotiations for the $1 billion deal.

Coal India’s foreign-venture arm Coal Videsh chief general manager Phalguni Guha said he expected the deal with Peabody to be finalised in the next “few months”.

He, however, refused to divulge the details on the Australian mines.

The deal could include assets in the United States and Indonesia as well as Australia, Guha said.

Mines that produce both thermal coal and metallurgical coal suitable for steel production are involved.

Guha said Coal India had appointed merchant bankers to assist with finalising the deal structure.

DSP Merrill Lynch is advising Coal India on the Australian aspects of the deal, he said.

“About six months back we invited expressions of interest from companies willing to establish linkages with Coal India Limited,” he said, adding “Based on that, we got a number of offers and we selected some of them and invited them to come to India to make a presentation on what structure they had in mind and what they wanted to offer Coal India.”

According to Industry experts, several major international miners responded to Coal India’s invitation to form “strategic partnerships” including Rio Tinto, Hancock, Anglo Coal Australia and Xstrata.

Guha said the company had “a lot of money” and would explore other opportunities in Australia once the Peabody deal was signed.

“After we complete this deal we will take stock of the situation and then again start the same process,” he said.”There are a lot of possibilities. First we are going for Peabody.” news source : indiatimes.com

The Essar Group on Thursday said it has agreed to acquire a 64-million tonne (mt) coal mine from an unnamed private company in Indonesia as part of its efforts to secure raw material supplies for its proposed thermal power projects in India.

The Ruias-controlled Essar Group didn’t want to name the closely-held Indonesian company citing confidentiality clauses and did not provide any financial detail. A group official said the transaction could be around $208 million (about Rs 956 crore as per current rates), basing his estimate on the recent acquisition of US-based Trinity Coal.

“We bought Trinity, which has reserves of 200 mt of thermal and coking coal, for $650 million,” said the official asking not to be named. However, a strict comparison can’t be made, because the acquisition price is a quality factor of the coal and the ash content in the commodity; the higher the ash content, the lower the quality and hence, lower price. The Aries coal mines are located in the Kutai region of East Kalimantan in Indonesia and are high-quality bituminous coal, with low ash and low moisture. Such categories of coal are suitable for power plants.

The acquisition would benefit Essar Power, an unlisted unit of the group, with “access to an estimated resource base of 100 mt of thermal coal and mineable reserves of 64 mt,” said the Essar statement. The transaction is expected to be closed by April ’10, the statement added.

Essar Power is currently building six power projects in India, raising its power generation capacity from 1,220 mw to 6,100 mw by ’12. “We are a vertically integrated power producer, with ownership and access to the raw materials needed to run the business,” said Essar Power director Anshuman Ruia. “The Indonesian mines are an excellent addition to our growing portfolio of coal assets. This acquisition adds another 100 mt to our existing thermal coal resource base of about 275 mt in India. source : indiatimes.com

Coal India Ltd (CIL) plans to invest Rs 6,000 crore in foreign acquisitions this financial year and is currently evaluating 10 overseas proposals that include five proposals for equity infusion. The proposals cover mining assets in countries such as the US, Australia and Indonesia.

“In addition to our capex plan of Rs 3,800 crore for 2010-11, we have earmarked Rs 6,000 crore for foreign acquisitions this financial year. Right now, we are evaluating five proposals from companies in the US, Australia and Indonesia,” CIL Chairman P S Bhattacharyya told reporters here.

Bhattacharya said the US-based Peabody Energy Corp is one of the companies that had offered to work in partnership with CIL, either through equity stake or forming a joint venture with an offtake contract. “We are working to close some of the deals in the next four to five months,” he said, adding altogether 10 proposals from five companies were taken for due diligence out of the 30 proposals received from eight large companies in response to its global expression of interest (EoI) floated in July 2009 for selecting strategic partners for overseas acquisitions.

He said the PSU would invest about $2 billion (about Rs 9,000 crore) over the next four years in foreign acquisitions and expected 50 million tonnes per annum coal from such ventures to meet the domestic demand.

CIL is also looking at an initial public offer in August, though it will be a purely offloading of equity by the government and no fresh infusion into the company. “We are awaiting government clearance. We want to file the draft red herring prospectus by June 15,” said Bhattacharya. The government plans to sell 10 per cent stake in CIL to raise about Rs 12,000 crore.

On the opposition from the trade unions, he was confident that it would be overcome. He said the Department of Disinvestment has been able to manage special dispensation, whereby employees of CIL subsidiary will be allowed to buy shares in the parent company on preferential terms.

The company clocked more than one and half times increase in net profit at Rs 8,312 crore in 2009-10 against Rs 3,435.87 crore in 2008-09. Its profit was lower last year on account of pay revision arrears amounting to Rs 3,216.5 crore.

The chairman said it was for the second time since the formation of CIL that all its subsidiaries, including ECL and BCCL, had reported profit. source from sify.com

Plans for a coal power plant in the Malaysian state of Sabah in northern Borneo have run into stiff opposition. Environmentalists say the coal plant could damage extensive coral reef systems, pollute water supplies, open rainforests to mining, and contribute to global climate change, undercutting Sabah’s image as a ‘green’ destination. The federal government contends that the coal plant is necessary to fix Sabah’s energy problems. However, a recent energy audit by the Renewable and Appropriate Energy Laboratory (RAEL) at the University of California Berkeley shows that pollution-intensive coal doesn’t have to be in Sabah’s future.

“We found that energy efficiency, biofuels, hydropower, and geothermal provide immediate advantages for the region over fossil fuels, and that in time both solar and ocean energy could provide even more energy than coal, while building jobs and a clean environment,” Professor Daniel Kammen, head of the energy analysis and director of RAEL, told mongabay.com.
 
Commissioned by Green SURF (Sabah Unite to Re-power the Future), a coalition of NGOs that oppose the planned 300 megawatt coal plant, Kammen examined Sabah’s energy options, including traditional fossil fuels, biomass waste, hydropower, solar, wind, and geothermal. The analysis also looked at the cost of each of these options to consumers, taking into consideration that an independent energy producer would require a certain return on their investment.

Alternatives

The study found that using biomass waste from Sabah’s extensive oil palm plantations could provide a significant boost in energy to the state while being cost competitive with coal. This solution would also deal with a waste-disposal problem for the oil palm plantations.

“The large scale of palm oil, and other biomasses means that this ‘waste’ is a huge resource,” says Kammen, though he also stresses that oil palm plantations are not without their own environmental problems.

“The challenge is not the technology, but in managing a wider issue, the growth in palm oil estates that have their own significant negative impacts on the region, despite their economic benefits,”

Using 2008 data from the palm oil industry, Kamman’s report found that by 2020 oil palm waste could provide a staggering 700 megawatts. Four hundred megawatts (a hundred more than the planned coal plant) would be achievable under a proposed 4-year-program.

 
Sunset over the Tabin Reserve rainforest. Environmentalists fear that a new coal plant near Tabin could damage the rainforest through acid rain and deforestation for transmission lines. Photo by Jeremy Hance. 
Hydropower was also found to be a cost-competitive with coal and more environmentally friendly, while geothermal was found to be only slightly more expensive than coal. A location has already been identified on the east coast of Sabah for a 67 megawatt geothermal power plant. Yet, Kammen, adds that Sabah shouldn’t rule out solar energy.

“Solar energy is a far better, but a bit longer-term resource, than is widely appreciated today,” he says.

The cheapest way forward is to pursue reduction in energy demand overall notes the analysis.

Coal fears

Despite the many environmental problems known to accompany coal power, the coal plant is being pushed both by the federal Tenaga Nasional Berhad and the state energy company, Sabah Electricity Sdn. Bhd.

Opposition from locals has forced the coal plant to move its location—twice. Now, the plan is to build it on Sabah’s east coast, directly on top of the Coral Triangle, an area known for astounding marine biodiversity. In addition, conservationists fear the coal plant’s transmissions will cut through some of the region’s last intact rainforest in Tabin Wildlife Reserve, home to a number of endangered species including the Bornean orangutan and the Sumatran rhino.

Environmentalists also warn that sulfur dioxide emissions from burning the coal could trigger acid rain that would impact nearby rainforests and agriculture. In addition, discharge of chlorine sulfates into the ocean would boost the likelihood of regional eutrophication and algal blooms, resulting in massive marine die-off. Currently, the area is home to many fishermen who depend on the oceans for their livelihood.

Locals have said that they fear the coal plant will turn the east coast of Sabah into America’s coal states, where water pollution, air pollution, coal ash dumps, deforestation, and destructive mining have devastated the local environment and wildlife. They point to the coal ash spill in Tennessee in 2008 as an example of what they don’t want to become.

 
Moving forward

At Copenhagen last December, the Prime Minister of Malaysia, Datuk Seri Najib Razak, pledged a 40 percent cut in carbon dioxide intensity by 2020. By moving forward on coal energy, Malaysia would make meeting this goal even more difficult, since coal is the most carbon intensive of the fossil fuels.

Kammen says that the choice between coal and renewable energy doesn’t have to be an either/or choice: either cheap or expensive, either job-creation or job-loss.

“The people of Sabah are keenly aware of the need for jobs, and of their incredible natural resource base. Renewable energy supports that positive development, and a coal project in the region fights that positive, clean, growth,” he says.

Sabah, its people, and its policymakers are facing a decision similar to many places of the world: how do we move ahead on energy? Kammen says that if Sabah chooses renewable energy over traditional fossil fuels it could help spark a clean energy revolution.

“That economies in all parts of the world can look carefully at their resources, develop partnerships, and build a clean energy, job creating path, that protects the natural legacy of each state and province, and our shared global legacy to leave the world a better place for our children than we found it. So far, our society, globally, has not lived up to that charge,” he explains, adding that “Sabah can take a stand, profit from the choice, and chart a new path.”

To facilitate this ‘new path’, a forum is being held on Friday, March 20th to discuss energy production in Sabah and allow the public to air their views. Green SURF, the Sabah Electricty Sdn Bhd (SESB), and the Malaysian Palm Oil Board (MPOD) will be in attendance. source : news.mongabay.com

PT Adaro Energy (ADRO.JK) Indonesia’s biggest coal producer by market value, said on Thursday that it has agreed to pay $350 million for a 25 percent stake in BHP Billiton’s (BLT.L)(BHP.AX) Maruwai coal project.

BHP Billiton, the world’s biggest mining group, said on Wednesday that it had chosen Adaro as its local partner to help develop its Maruwai coal mine in Indonesia, less than a year after canning the project.[ID:nJAK75034]

“We are agreed to pay $350 million pending government approval,” said Andre Mamuaya, Adaro’s corporate secretary. “Application for approval is ongoing.”

BHP Billiton will retain a 75 percent stake in the project which is located in East and Central Kalimantan. Maruwai has undeveloped metallurgical and thermal coal resources estimated at 774 million tonnes.

The Maruwai coal project is expected to start commercial production in 2014 and output is then seen reaching 6 million tonnes of both thermal and coking coal within five years, a BHP official in Indonesia told Reuters.

Thermal coal is used in power plants, while coking or metallurgical coal is sold to steel mills.

“We believe the outlook for coking coal remains strong on account of steel demand growth and supply pressure due to insufficient infrastructure capacity,” said Andreas Bokkenheuser, mining and commodities analyst at UBS Securities, in a note to clients.

BHP Billiton said in June last year it would not go ahead with the first stage of the project because it did not fit with the company’s long-term investment strategy, but later said it would sell a stake and opened up bidding. [ID:nSGE60Q0LZ]

A sharp recovery in coal prices following the downturn was one reason why BHP decided to restart the project, the company said.

The project will need between $500 million and $1 billion to produce 6 million tonnes, a BHP official has said. BHP plans to build a railway connecting the mine to the nearest barge-loading ports to help expand production. source uk.reuters.com

Coal India shortlists miners in Australia, Indonesia, US; imports to continue for foreseeable future; domestic coal prices to rise, supply growth restricted

Mumbai: State-run Coal India, the world’s largest coal miner, is moving swiftly towards signing strategic alliances to help fill India’s yawning coal supply-demand gulf, its director of marketing said on Wednesday. They would be in the form of equity or offtake deals with major coal mining firms in Indonesia, Australia and the United States and it has shortlisted 10 producers, A K Sarkar told Reuters on the sidelines of the Coaltrans conference in Mumbai.

India’s coal shortages have affected a range of industries including aluminium smelting and caused power plant coal stocks to shrink to two or three days’ worth. “The thirst is for equity and we are going full steam ahead,” Sarkar said in an interview. “We would prefer not to sign purely offtake deals, we want security of coal supply.”

Security of supply would best be guaranteed by owning all or part of existing or new mines, he added. To this end, Coal India has shortlisted 10 major coal producers and will take three months to carry out due diligence and decide which alliances to seriously pursue, he said.

Coal India is looking at three alliance models: equity in existing mines; pure offtake deals and joint ventures to develop new mines and deals will be signed with producers “sooner rather than later,” Sarkar said. Some of the coal producers with whom Coal India is in talks will be able to supply coal this year and some next year, he said, stressing the urgency of getting coal flowing rapidly.

India’s coal shortfall for 2010-2011 is 81 million tonnes but Coal India will fill only a portion of that as instructed by the Central Electricity Authority, Sarkar said.In February, Coal India subsidiary Western Coalfields said Coal India w ould import 6-10 million tonnes in 2010-11, up from around 1.5 million in the previous year.

Imports to continue strong

India has no choice but to import coal for the foreseeable future, at least five years, despite Coal India’s efforts to ramp up domestic coal output, Sarkar said. “Imports are a reality and will increase or decrease depending on how much we can increase our output but definitely imports will continue for the forseeable future, at least five years and will increase year to year,” he said.It is too early to discuss the structure of equity deals in exchange for coal or pricing for offtake agreements, Sarkar said, but the higher cost of imports would need to be reflected in domestic coal prices paid by end-users.

“There is a cost component for imported coal – domestic coal is less than 50% the cost of imports – and also Indian coal is a depleting energy resource, this must also be taken into account,” he said. India has vast coal reserves in the east of the country but strict environmental laws and the difficulty of developing mines where there are towns and villages restricts Coal India’s ability to boost output, Sarkar said. “The fact is, in India, land is almost a raw material. People do not want to move but you need land to get at the coal,” he said. source : livemint.com