International Coal Ventures Ltd (ICVL) is set to bid for coal mines in Australia. The move may potentially bring the joint venture company in competition with leading state-run Chinese coal firms.
ICVL, a company set up by five state-owned firms to secure coal assets overseas, plans to bid for concessions in the East Bargo area of Australia, which has reserves of around 330 million tonnes (mt) of the scarce fuel.
Competitors like China Shenhua Energy Co Ltd and Yanzhou Coal Mining Co Ltd, which are actively engaged in acquiring mining concessions overseas have got their antenna up.
We are interested in the Australian property, said a senior executive at CIL, who asked not to be identified given the sensitive nature of the issue. CIL controls most of India's supply of coal.The successful bidders will be awarded a coal exploration licence for an initial period of five years.
The East Brago area, in New South Wales state, is located 30km north-west of the seaside city of Wollongong and around 920km south-south west of Sydney, the state capital and Australia's largest city.
ICVL is competing with Chinese firms overseas to acquire scarce coal assets. Analysts say that bids by Indian miners tend to be relatively uncompetitive. That's because most Indian firms seek the coal for their own end-use projects, while rival bidders may have higher-margin alternative plans.
India has 256 billion tonnes of coal reserves, of which around 455 mt per annum is mined. The country imports around 40 mt of coal. Demand is expected to reach around two billion tonnes a year by 2031-32, around five times the current rate of extraction, with most of it coming from the power sector.
The hunt for coal assets has never been so intense, with the Chinese pouncing on all that is there to grab. Indian players carry a fear of making wrong moves in a volatile market faced with difficult value estimation, which keeps their decision-making process hamstrung..., said Dipesh Dipu, principal consultant (mining) with audit and consulting firm PricewaterhouseCoopers.
Another Indian firm Sajjan Jindal-owned JSW Energy is close to finalising a coal-supply linkage pact in Indonesia and is also exploring options of acquiring coal mines in South Africa and Australia, to secure coal supplies for its forthcoming power projects. The company is in the final stages of completing due diligence for a 50-million tonne coal linkage in Indonesia, according to a person close to the development.
JSW Energy has already identified a coal mine in South Africa and is in talks with Australian miners to tie-up fuel linkages for its proposed power plants and for JSW Steel. If the deals are finalised, JSW Energy would get additional coal linkage of 250 mt. Currently, JSW Energy has access to limited coal reserves in India and is largely dependant on imports. Besides making full-fledged acquisitions, JSW Energy is also in talks with the South African government for jointly developing coal mines.
JSW Energy has plans to import 13 mt of coal for its upcoming power plants at Ratnagiri and Vijaynagar, Karnataka. The company has also secured coal supplies from a block in Orissa where it has a JV with Mahanadi Coalfields, where it would be able to procure around 90 mt in the long term.
The board of Santee Cooper, South Carolina's state-owned electric and water utility, decided on Monday to suspend efforts to build a 600-megawatt, coal-fired power plant in Florence County. The 11-member board voted unanimously to drop work to permit the $2.2 billion Pee Dee Energy Campus, citing falling overall electric demand, the prospect of increased costs from federal carbon regulation and lower future power purchases from Santee Cooper's largest customer.
Santee Cooper chairman O L Thompson said the recession, carbon legislation and a decision by Central Electric Power Cooperative to buy electricity from another company in 2013 reduced the need for new generation. Environmentalists and South Carolina Governor Mark Sanford opposed the project, citing high costs and potentially dangerous emissions of carbon dioxide, a greenhouse gas blamed for global warming.
While the chance that the project could be revived after Monday's suspension are remote, we want to leave that option open, in case there are other developments related to Santee Cooper's plan to build a new nuclear plant with Scana Corp (SCG.N), or a change in Central Electric's future power procurement plan, said Santee Cooper spokeswoman Laura Varn.
The Pee Dee Energy Campus obtained an air permit last year from South Carolina regulators and was working for federal permits, the agency said. Santee Cooper has spent $242 million so far, mostly to buy equipment which Varn said the agency would expect to recoup if the Pee Dee plant is eventually scrapped.Thompson said the decision could save Santee Cooper customers money by avoiding the large capital outlay for construction.
To the test
Meanwhile, US has put clean coal projects to the test with $27.6 million. The US Department of Energy announced that it will provide $27.6 million in funding to 19 different projects testing the efficiency of underground carbon dioxide sequestration as a potential strategy for reducing greenhouse gases and preventing global warming.
Coal is still the most plentiful source of energy in the US, with the plants that use it churning out 80 per cent of the country's carbon dioxide emissions. Any effective, affordable technology capable of slashing this output could make a major impact on air quality and America's environmental reputation. For now, the DOE is primarily concern with assessing the risks posed by underground capture.
In addition to the $27.6 million ponied up by the department, the project developers involved have produced matching funds of $8.2 million. The bulk of the money will be used for small-scale demos and simulations that will determine how best to funnel carbon into underground storage, as well as whether or not it will leak.
Most of these projects are based at universities, including Stanford ($1.2 million), Montana State University ($405,000), Columbia University in New York ($1.6 million), the Colorado School of Mines ($1.6 million) and Princeton ($2 million). Companies receiving money include Schlumberger Carbon Services ($2 million), Fusion Petroleum Technologies ($2 million) and Planetary Emissions Management ($2 million).
Carbon sequestration is an often heated topic in political and environmental arenas. A strong, supportive contingent argues that coal will persist as a major supplier of energy for many years to come, so efforts to limit its damage are vital. Their opponents contend that so-called clean-coal technologies will only prolong its use and suck up federal funds that could otherwise go toward development of renewable sources of energy like solar, wind and geothermal.
Macarthur Coal Ltd, the world's biggest exporter of pulverized coal, reported a 4 per cent gain in second-half profit after sales rose.
Net income climbed to A$61.6 million ($51 million) in the six months ended June 30, from A$59.2 million a year earlier, according to a statement from the Brisbane-based company.
We were able to procure substantial spot market sales of both thermal and pulverized coal to non-traditional customers during the second half of the year, chief executive officer Nicole Hollows said in the statement.
Macarthur, which sold A$252 million in new shares in June to fund expansion, is in talks to agree its first long-term sales contract in China, the world's biggest steel producer. Steel demand is starting to recover after contract prices slumped almost two-thirds this year, chairman Keith De Lacy said.
Macarthur rose 2.4 per cent to A$9.41 Sydney time on the Australian stock exchange. The stock has tripled this year and has a market value of A$2.4 billion. The company will pay a final dividend of 13 cents, it said. The company's full-year profit more than doubled to A$168.6 million.