This Month In Coal - May 2017

Anglo Sells South African Coal Assets

Just a few years ago South Africa’s coal industry was on the up and up, shrugging off the malaise affecting the industry elsewhere. Now, many producers face closure in a stunning reversal of fortunes.

As coal mines closed in the US, the UK and elsewhere, South Africa’s mines appeared to thrive. The world’s sixth largest exporter, the country’s mines were however geared mostly toward a single local customer — state electricity utility Eskom.

Only a third of South Africa’s coal is shipped abroad. The rest is sent to a fleet of local power plants, mostly in Mpumalanga province to the east of the country. More than 96% of Eskom’s electricity came from coal. For producers such as Anglo American, BHP Billiton, Xstrata and others, it was a sweet deal with a guaranteed customer.

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Yancoal Secures Approval to Buy Rio Tinto’s Australian Coal Mines

The $2.5 billion U.S. deal between Yancoal and Rio Tinto has been approved by Australia’s Foreign Investment Review Board (FIRB), according to Xinhua. The Australian-based Yancoal, controlled by a Chinese parent company, now has regulatory approval to close the deal that will see them pick up key mines as Rio Tinto continues to divest its Australian assets.

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North Korean Ships Head Home After China Refuses Shipment

A fleet of North Korean cargo ships is heading home to the port of Nampo, according to the Asia Times, after China ordered its trading companies to return coal. Following repeated missile tests that drew international criticism, China banned all imports of North Korean coal on February 26, cutting off the country’s most important export product. To curb coal traffic between the two countries, China’s customs department issued an official order on April 7 telling trading companies to return their North Korean coal cargoes, said three trading sources with direct knowledge of the order.

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India to Offer Complete Pricing Freedom to Private Coal Miners

India’s Ministry of Coal has decided to offer pricing freedom and revenue sharing contracts as sweeteners to woo private investors into commercial coal mining in the country. Having thrown open the coal sector to private investors for commercial mining for the first time since 1973 when coal industry was nationalized, India would offer total reserves of around 30 million metric tons (mt) in the first tranche to be allocated to such private miners through the reverse auction route.

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News - This Month In Coal - April 2017

Vale Completes Moatize Coal Transaction With Mitsui

This week, Vale announced it had completed the $770 million equity transaction with Mitsui & Co. Ltd. (Mitsui) associated with the divestment of part of its interest in the Moatize coal mine and in the Nacala Logistics Corridor (NLC). Vale received $733 million and the remaining $37 million will be paid at the conclusion of the project finance transaction of as much as $2.7 billion, which will help fund the project and is still expected to happen in 2017.

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Cyclone Debbie Sweeps through Queensland

Cyclone Debbie struck Queensland at the end of March and rail provider Aurizon confirmed none of the four railways serving regional coal mines were in full operation while two of them were entirely out of action. The disruption will likely spark a short-term rally in coking coal prices given that Queensland produces more than half of the world’s seaborne coking coal.

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Teck Updates Coking Coal Guidance

Teck Resources expects coking coal sales volumes for the second quarter of 2017 to be at least 6.8 million metric ton (mt), and mining costs in the second quarter are expected to be in the range of $47/mt to $51/mt. For the first quarter, Teck realized an average price between $209/mt to $212/mt, at the higher end of its previous guidance range. Sales volumes in March improved relative to weak sales in January and February, but not sufficiently to result in sales above 5.8 million-6 million mt in the quarter. Final quarterly sales will depend on timing of shipments.

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Trump to Overhaul US Energy Strategy

U.S. President Donald Trump signed an executive order on energy independence on March 28 that will re-evaluate former President Barack Obama’s Clean Power Plan (CPP) and lift the ban on federal leases for coal production.

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News - This Month In Coal - March 2017

Working With Congress, President Trump Repeals Stream Protection Rule

On February 16, President Donald J. Trump signed legislation that will repeal the Stream Protection Rule, which he called “another terrible job-killing rule.”

At the signing, President Trump said this action stands by his promise of saving American jobs, especially those at mines across the U.S., and eliminating “wasteful regulations that do nothing.”

“This rule we’re eliminating it’s a major threat to your jobs, and we’re going to get rid of that threat immediately,” Trump said. “We’re going to fight for you like I promised I would in the campaign.”

The U.S. House of Representatives and the U.S. Senate approved the measure in early February that will nullify the Stream Protection Rule that was finalized by the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement on December 20. The rule addresses the impacts of surface coal mining operations on surface water, groundwater and the productivity of mining operation sites.

The blocked regulation would have duplicated existing regulations already in place to protect Americans, a statement from the White House said.

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THIS MONTH IN COAL - December 2016

WVDEP, Alpha Natural Resources Reach $15 Million Settlement • North Korea Rejects UN Sanctions on Coal Exports • Alberta Proposes Deal to Close Coal-fired Power Plants

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