Rising Chinese interest in buying US steel-making coal is stirring the US markets. In addition to Consol Energy Inc confirming a sale recently, several ships have been hired to haul US coal to China. Analysts cite demand in China, steel mill restarts and Australian struggles to fill orders for a metallurgical coal price rise to $160 a metric tonne from less than $100 a few months ago.
They're actually soliciting for qualities available and having samples sent for testing, Frank Kolojeski of New Jersey-based TransGlobal Ventures Corp told Reuters. I understand there are people out looking for freight from the US to China. That's a good indication, he said.
Even Morgan Stanley analysts Mark Liinamaa and Wes Sconce wrote there is spot price momentum toward $175 a tonne. Part of the reason for demand pressuring supply is port congestion in Australia, a major supplier to China, where coal can be mined faster than it can be exported, Kolojeski said. This has created opportunities for US met coal producers. the Morgan Stanley analysts said.
US producers welcome the business, but to compete with Australia they must absorb the additional $40 to $45 cost of a longer haul from North America to China, Coal & Energy said. The real hope of US miners is for continued tightness in the market coupled with additional demand from Europe and Brazil, Coal & Energy's Jim Thompson said. The haul from the United States to Europe and Brazil is much shorter and more profitable for US producers, he said.
Queensland closes door
No new coal-fired power stations will be built in Queensland unless they use the world's best emissions technology and are ready to store and capture carbon, the state government has said.
Parliament was told the new plan contained $87.2 million in funding for new climate change initiatives. This includes $60 million for transport initiatives, as more than 10 per cent of the state's emissions come from transport and congested traffic produces up to 30 per cent more emissions than free-flowing roads.
Support in Appalachai
The Federation for American Coal, Energy and Security, known as FACES, has launched a campaign to promote the economic benefits of coal in Appalachia. The purpose for the new organization was outlined during a news conference in Charleston Wednesday afternoon.
FACES represents an alliance of people from all walks of life who have joined forces to educate lawmakers and the public about the importance of coal. Coordinator Bryan Brown says the campaign launched in Charleston Wednesday, and will launch in Kentucky and Verginia over the next several weeks. They hope to take the initiative nationwide.
Exxaro Resources Ltd, the South African producer of coal and zinc, reported a 12 per cent gain in first-half profit after selling more fuel to state utility Eskom Holdings Ltd. and overseas.
Net income rose to 1.39 billion rand ($174 million), from 1.24 billion rand a year earlier, the Pretoria, South Africa- based company said in a statement today. Sales gained 23 per cent to 7.1 billion rand. Profit was curbed by lower international prices for thermal coal, fewer domestic sales and higher costs. Second-half domestic prices for thermal and coking coal will decline because of contractual agreements, the company said.
Coal mining group Energybuild has secured a funding deal worth more than £2m with its major shareholder, it announced yesterday. The loan worth £2.5m will be used to fund ongoing working capital and development expenditures at Energybuild's mining facility in the Neath Valley.
The Aberpergwm-based firm, which is listed on the Alternative Investment Market, last month reported that sales of its anthracite increased by more than 150 per cent in the past year.
Canadian mining operation Western Canadian Coal, which has a 50.6 per cent stake in Energybuild, is providing the loan - which is repayable 45 days after receipt of a demand notice, which may not be served before January 6, 2010, and which expires on August 18, 2012.
Rhidian Davies, managing director at Aberpergwm-based Energybuild, said: The funds will assist the company with the ongoing development of its coal assets in South Wales.
In its latest trading update, Energybuild said its revenue was up 149 per cent - providing a 75 per cent increase in pre-tax profit over the 12-month period to the end of June 2009. The group said its Neath Valley mining operation was maintaining its target of producing 640,000 tonnes a year of saleable production from Aberpergwm by the end of 2011.
Turnover for the year to June stood at £16m, compared to £6.5m over the same period the year before. Profit before tax this year stands at £2.2m, up from last year's figure of £1.25m. Energybuild said it committed £7m to capital expenditure over the period, as it continued with its objective of developing its underground operation.
Meanwhile, Western Canadian Coal Corp's second quarter revenue was down by 41 per cent, along with a dramatic decline in profitability from the same time last year. The B.C.-based company's revenue fell to $75.7-million from $130.4-million in the second quarter of 2008, as tonnage sold fell to 435,000 from 583,000 and average prices fell to $174 from $224 a tonne.
The coal company's profit was $3.4-million or 2 cents per share in the three months ended June 30. A year earlier, profit was $59.7-million or 27 cents per diluted share, boosted by a $22.8-million tax recovery. The company ceased coal extraction and hauling at its Brule mine in mid-March because of a buildup of inventory, resulting in a 227,000-tonne production reduction. WTN (TSX) closed at $3.25, down 12 cents.
Hunter-based miner Centennial Coal expects to be exporting from its Mandalong mine through the Port of Newcastle early next year.
Centennial yesterday reported an annual profit after tax of $71 million, $217 million below last year's figure. But the company says it is pleased with the latest result, given the 2008 figure was artificially inflated through the sale of assets.
Managing director Bob Cameron says Mandalong is performing well and will do even better when a new haul road is completed. Mandalong had a record year, 4.9 million tonnes, it will do better again this year, he said.