MAC: Mines and Communities

Thumbs up - and down - for global coal

Published by MAC on 2011-05-30
Source: The Age, Jakarta Post, EFE, Official Wire (2011-05-26)

Spotlighting Australia, China, Colombia and India

Four of Australia's largest banks are refusing to finance a new coal-fired power plant in the state of Victoria.

So far - so good.

However, Coal India is now on the verge of paying up to US$1 billion to acquire 40% of an Indonesian mine, in order to supplement India's dwindling supply of its own coal reserves.

On May 22, thirteen mineworkers were reported to have been killed in gas explosions in two Chinese mines.

Government figures show that 2,433 people died in coal mine accidents in China during 2010 - roughly equivalent to more than six workers being killed each day.

Although eight workers were rescued after a rock fall at a Colombian mine on May 17, this should provide little cause for comfort in the South American state.

Last January a gas explosion killed 21 people at a coal mine in  the northeastern province of Norte de Santander.

And, during 2010 there were no fewer than 84 emergencies in mines across the country, costing the lives of 173 workers - 73 of them in an explosion at a coal mine in the northwestern province of Antioquia. See: Mining "accidents" may be increasing

Big banks 'no' to coal plant

By Royce Millar and Adam Morton

The Age (Australia)

21 May 2011

AUSTRALIA'S four major banks have rejected funding a coal-fuelled power plant proposed for Victoria, raising doubts about its viability despite its controversial approval by the Environment Protection Authority.

The EPA has cleared the way for Melbourne coal technology company HRL to build what would be Victoria's first new coal plant in nearly 20 years.

Under yesterday's ruling, HRL can build a plant at Morwell using new gasification technology, which is claimed to reduce greenhouse gas emissions from brown coal power by about a third, to roughly the level of modern black coal stations.

The 300-megawatt plant approved was only half the capacity of what HRL had wanted.

EPA chief executive John Merritt said the reduced plant qualified as best practice under state climate change legislation introduced by the former Brumby government last year.

''Our interpretation ... is that a proposal that contemplates using brown coal and delivering a 30 per cent improvement in its emissions is within the act, and we are required to assess it against that,'' he said.

The decision pleased neither environmentalists nor HRL, with both flagging possible legal challenges. Green groups said approving a coal plant of any size undermined national and state commitments to tackle climate change, including Victoria's legislated target of a 20 per cent cut in emissions this decade.

HRL said it had ''significant concerns'' about the decision, and accused the EPA of in effect approving a different project to the one it had submitted.

Internal federal government correspondence obtained by The Saturday Age suggests the plant would not be economically viable at its reduced size.

The documents, released under freedom-of-information laws, show an expert panel advising the Howard government in 2006 on whether HRL should receive funding found the company believed a plant smaller than 400 megawatts would not be cost effective. ''HRL does not believe it can reduce the physical size of the plant,'' the advice says.

The Saturday Age has learnt that HRL was struggling to finance the project before the EPA reduced its size. ANZ, Westpac, the Commonwealth and National Australia Bank have each stated they are not involved. Sources said there was no evidence the company had won alternative funding.

Westpac spokeswoman Jane Counsel indicated the bank did not consider it a clean coal project. ''We will continue to consider financing coal projects in the future, but our focus is very much on supporting those projects that use cleaner and more efficient technologies and are making the transition to a carbon-constrained operating environment,'' she said.

The HRL project has been hit by technological delays since being announced in 2006, and has been chasing finance as support for coal plants has dwindled across Australia and in the United States.

A report by consultants Deloittes released this week by Energy Minister Martin Ferguson found no major financial institutions were investing in new coal power projects in Australia, beyond some refurbishments in Western Australia.

The Washington Post recently reported that US power companies had dropped plans for 38 new coal plants and announced they would retire 48 generators.

Environment Victoria chief executive Kelly O'Shanassy said it was ridiculous for the EPA to suggest that using coal to produce electricity was best practice when there were many larger clean energy projects ready to go in Victoria.

''This is a comprehensive failure by the EPA to protect Victoria's environment and Victorians,'' she said.

The HRL plan, initially billed as a clean project running on synthetic gas derived from coal, won $50 million in state funding and $100 million in federal funding conditional on it winning commercial funding. It was supposed to start operating in 2009.

But HRL's original partner, Chinese-owned Harbin Power, withdrew its 50 per cent stake, and The Age last month revealed the cost of the proposal had blown out by more than 50 per cent - from $750 million to $1.2 billion.

The Greens and environment groups have called on the governments to withdraw support. Greenpeace spokesman Julien Vincent said: ''Julia Gillard has promised no more dirty coal-fired power stations. If the Prime Minister wants any credibility on climate change she will need to make this power station illegal.''

Mr Merritt said the EPA had considered whether new coal plants should be built given climate change concerns, but found it should be approved with strict conditions. They include removing sulphur dioxide emissions and keeping its emissions intensity within the state limit of 0.8 tonnes of carbon dioxide per megawatt hour of energy generated.

Victoria Energy Minister Michael O'Brien said the EPA decision meant Victoria could continue to use its vast brown coal reserves at a significantly lower level of emissions.

But he added: ''The future of this project ... is, of course, a commercial decision for HRL.''


Indian Firm on Verge of Acquiring 40% Stake in Indonesian Miner

Jakarta Post

26 May 2011

Coal India, the world's largest coal miner, is in advanced talks to buy up to a 40 percent stake in Indonesia's Golden Energy Mines in a deal valued at between $750 million and $1 billion, three sources with direct knowledge said on Thursday.

Golden Energy is a coal-mining subsidiary of energy and infrastructure firm Dian Swastatika Sentosa. It is estimated to have 400 million tons of reserves. It owns 10 coal mining areas across Indonesia, including in Sumatra and Kalimantan.

State-run Coal India, in which the government sold a 10 percent stake for $3.4 billion last year in the country's largest initial public offering, is halfway through the due diligence for the Golden Energy asset, two of the sources told Reuters. The Indian company will submit a final bid by the end of June, they said.

United Tractors, Indonesia's biggest heavy equipment provider, has withdrawn from the bidding process for the asset, sources said. The sources declined to be named as the information is not public.

Officials at Coal India, headquartered in Kolkata, and Dian Swastatika in Jakarta could not be reached for a comment. Dian Swastatika Sentosa is owned by Sinar Mas Group, one of Indonesia's leading conglomerates.

Golden Energy corporate secretary Eddy Salimah said the company was in talks with six firms, including Coal India, over the stake sale. Golden Energy also plans to sell shares in an IPO in August at Rp 2,300 to Rp 3,500 each, he said.

"Indian companies are very interested in taking stakes in Indonesian coal companies to secure supplies for their energy needs," Salimah said, adding that Golden Energy expected to complete the deal in mid-June.

Dian Swastatika wants to keep its majority stake in the company after the sale, he added.


China Mine Accidents Kill 13

By Christine Gaylican

Official Wire

23 May 2011

Beijing - Two coal mine accidents separately occurred at the Hunan and Sichuan provinces that killed of thirteen workers during the weekend, state media agency Xinhua said in a report.

This would be the latest in the fatal accidents that occurred in the China's dangerous collieries that remains to be improved.

In the central province of Hunan, seven people were killed and one injured late on Sunday in a gas accident at a mine in Lengshuijiang city, according to Xinhua.

Earlier on that same day, six people perished while 27 were hurt in a similar incident in the south western province of Sichuan. Reports said that 200 people were working at the mine in Rongxian county at the time of the incident and some were able to escape.

Police have launched investigations into both accidents, Xinhua said. In 2010, state data showed that some 2,433 people died in coal mine accidents in China, which could be equivalent to more than six workers per day.

This month, the Chinese government has announced that it is requiring the nation's state -owned enterprises (SOEs) to implement stricter work safety standards over the next five years in order to reduce casualties resulting from accidents.

Huang Shuhe, vice director of the State-owned Assets Supervision and Administration Commission (SASAC), China's SOE watchdog, said SOEs should improve their work safety regulations and significantly reduce major work safety accidents and casualties from the past five years.

Data showed a total of 157 major work safety accidents occurred among SOEs during the past five years, which caused 965 deaths. These accidents were mainly concentrated in the construction, coal mining and petrochemicals sectors.

According to official statistics, SOEs spent an average of 40 billion yuan (6.15 billion U.S. dollars) each year on work safety during the nation's 11th Five-Year Plan period (2006-2010), but work safety accidents remained frequent in some sectors.

This reveals that some SOEs still needed to strengthen work safety management and need to effectively abide by work safety laws and regulations in the coming five years, Huang said at a national work conference in Beijing, Xinhua News said.


8 Rescued after collapse at coal mine in Colombia

EFE

18 May 2011

Bogota - The eight workers who were trapped Tuesday in a collapse at a coal mine in the southwestern Colombian province of Valle del Cauca were rescued after 10 tense hours below ground, government officials said.

The cave-in occurred at dawn Tuesday in the Loma Gorda mine in Los Limones, a rural area near Cali, the provincial capital and Colombia's third-largest city.

"The emergency organizations removed material, shoring up the mine and by luck the miners managed to get out alive," the mayor of Cali, the provincial capital, Jorge Ivan Ospina, told reporters.

He added that all the miners "are well and this rescue was achieved by the quick action of the emergency organizations and the cooperation provided by the mine personnel."

The eight "experienced" miners, who range in age from 23 to 54, were trapped some 90 meters (295 feet) down and "they are being supplied with oxygen," Ospina had told reporters earlier in the day.

"We known they're alive, because they're shouting," the mayor had said, adding that the Loma Gorda mine operates legally and that several miners and engineers were working at shoring up the mineshaft to proceed with the rescue.

One of the miners collaborating in the rescue told reporters that the eight trapped in the mine were "well."

On Jan. 26 a gas explosion killed 21 miners at a coal mine in Sardinata, a town in the northeastern province of Norte de Santander.

And during 2010 there were 84 emergencies in mines across the country that caused the deaths of 173 workers, 73 of them in a single incident - an explosion at a coal mine in the northwestern province of Antioquia.

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