MAC: Mines and Communities

Is coal now a zombie industry?

Published by MAC on 2016-04-29
Source:,, Reuters,, others

Worldwide emissions must be reduced to near zero in the second half of the century

United States

The crisis in the US coal industry has claimed its biggest victim, as Peabody Energy, the world's largest privately owned coal producer, filed for bankruptcy protection. According to, coal has been in a structural decline since 2013 and the bankruptcy of Peabody highlights the need to create a comprehensive plan for a just transition away from fossil fuels.

Through the first fourteen weeks of 2016, U.S. coal production declined by 32 percent from the previous year, according to the Energy Information Administration. In 2007, coal accounted for 48 percent of U.S. electricity production, but in January 2016 fell to 32.6 percent. Natural gas is on track to overtake coal as the most popular fuel for electricity generation in the country and 2016 would be the first time that coal loses out to natural gas.

Montana communities won a victory against one of the world’s biggest coal companies, when Arch Coal abandoned the Otter Creek mine – the largest proposed new coal strip mine in North America. The story of how the project imploded is one of people power triumphing over a company once thought to be nearly invincible. Arch Coal also suspended its application for a major mine in southeastern Montana, two months after the mining giant filed for bankruptcy protection and amid broader struggles for the coal industry that have reversed its once-bright prospects in the state.


In Europe, NGOs have criticised Dutch banks ING and Rabobank for their recent loans to SUEK, the biggest Russian coal producer and one of the world’s biggest coal mining companies.

Sierra Club, Greenpeace, and CoalSwarm released Boom and Bust 2016: Tracking The Global Coal Plant Pipeline, the second annual report examining the precarious global coal plant pipeline. According to the report, coal plants are increasingly sitting idle in all of the world’s four largest markets, and global coal consumption is declining drastically.

They also called on Crédit Agricole and Société Générale to withdraw from the Tanjung Jati B power plant expansion project in Indonesia.

Meanwhile, some of Europe’s last remaining coal producers - in the Czech Republic, Romania and Poland - are grasping for government support to keep from going under and taking thousands of jobs with them. Coal miners have taken a battering from falling prices and policies aimed at replacing coal-fired power generation with cleaner sources like renewables. This has led to a string of mine closures across Europe in recent years.

The U.K. shuttered its last deep coal mine in December, marking the end of an industry that dated back as far as Roman times. Spain employs only 2,900 coal miners, down from 50,000 three decades ago. Coal-fired power is on a similar downturn, especially in Western Europe. Belgium switched off its last coal plant this month, Portugal aims to do so by 2020, and the U.K. and Austria by 2025.

Germany is expected – and purports – to take the lead on decarbonising its economy. The country’s hard coal mines will lose valuable subsidies by 2018, as part of the government’s ambitious Energiewende transition towards renewable energy.

A mining region since the mid-nineteenth century, Lusatia, is proud of its industrial heritage. Yet there is a sense that resistance to change is giving way to resignation, as its greatest natural asset becomes a liability. Two Czech firms have submitted bids for Vattenfall's loss-making lignite coal mines and associated power plants in Germany, but might have to pay into covering future decommissioning costs. German power prices have fallen by around 40 percent since Vattenfall first launched the sale.

People in Runcurel, a small village in the south west of Romania, have lived between coal mines for 40 years. The Jilț North lignite mine is running out of coal and the mine’s operator, the state-company Oltenia Energy Complex (OEC) is seeking to expand on the land on which peoples’ houses are standing. The 400 odd villagers are now facing an urgent uphill battle against a goliath threatening to evict them from their homes in the next weeks, without receiving enough to start life anew.


Jharkhand Ispat Pvt. Ltd. and two of its directors became the first to be convicted in the coal blocks allocation scandal, when a special court found them guilty of criminal conspiracy and cheating. This is the first judgement in numerous such cases, following the Shah Commission's findings in 2012. There are numerous cases involving suspected irregularities in the allocation of coal blocks that rocked the previous Congress-led United Progressive Alliance (UPA) government.


China is cracking down on its growing coal power overcapacity crisis, according to reports in the Chinese press. The National Energy Administration (NEA) has ordered 13 provincial governments to stop issuing approvals for new coal-fired power plants until the end of 2017. It has also told 15 provinces to stop building new coal power plants that have already been approved.

Revealed: ING and Rabobank continue support for biggest Russian coal producer

Fair Finance Guide coalition press release

25 April 2016

Amsterdam, the Netherlands - Dutch NGOs involved in the Fair Finance Guide coalition have today criticised Dutch banks ING and Rabobank for their recent loans of 109 million euros to SUEK, the biggest Russian coal producer and one of the world’s biggest coal mining companies.

The SUEK loans from the Dutch banks were made, along with loans for similar amounts from eight other banks, in February this year. In November 2015 ING announced that it was reducing its exposure to coal companies, with immediate effect, while Rabobank prides itself as a leader in financing sustainable energy. [1]

ING is today holding its Annual Shareholders Meeting in Amsterdam, and the Fair Finance Guide coalition is calling on ING's board to state clearly that the bank will no longer lend to coal producers and to increase its lending to renewable energy producers in order to combat climate change.

The NGO coalition believes that apart from refraining from lending to coal companies, ING and Rabobank need to be fully transparent about the carbon footprint of their lending portfolio. Financial institutions should now be contributing to global efforts to reduce climate change to the 1.5 degree celsius maximum.

Evert Hassink, spokesperson for Fair Finance Guide Netherlands, commented:

“With this new loan ING is breaking its new policy to reduce coal investments and refrain from lending to companies which rely on coal and coal power for over 50% of their business. Research by Fair Finance Guide in 2015 has already revealed that ING invests eight times as much in fossil fuels as it does in renewable energy. This new loan suggests that ING is ignoring the Paris climate agreement and its own climate policy.”

For more information contact:
Jules van Os, Oxfam Novib. Tel: +31 6 51 57 36 83
Marlijn Dingshoff, Milieudefensie. Tel: +31 6 29 59 38 72

Notes for editors:

1. Details of the USD 1 billion SUEF loan package available at:

About Fair Finance Guide
Fair Finance Guide in the Netherlands is an initiative of Oxfam Novib, Amnesty International, Milieudefensie, FNV, Dierenbescherming and PAX and a member of Fair Finance Guide International (FFGI).

US coal giant Peabody Energy files for bankruptcy

Cecilia Jamasmie

13 April 2016

The crisis in the US coal industry has claimed its biggest victim yet as Peabody Energy (NYSE:BTU), the world's largest privately owned coal producer, filed for bankruptcy protection.

In its filing, the St. Louis-based company which traces its history back to 1883 listed $10.1 billion in debt, mostly due to the effects of dramatically low coal prices and falling demand from China.

Shares in the miner have been suspended, but all of Peabody’s mines and offices are continuing to operate and are expected to continue doing so for the duration of the process, the firm said in a statement.
"Peabody's bankruptcy filing is one of the largest in the metals and energy sector since commodity prices began to fall in the middle of 2014."

"This was a difficult decision, but it is the right path forward for Peabody," said Chief Executive Officer Glenn Kellow. "This process enables us to strengthen liquidity and reduce debt, build upon the significant operational achievements we've made in recent years and lay the foundation for long-term stability and success in the future."

The move by Peabody, the US largest coal miner, follows on the heels of similar actions by Arch Coal, Alpha Natural Resources, Patriot Coal Corp. and Walter Energy.

In its bankruptcy filing, the company also said it has also shelved plans to sell assets in New Mexico and Colorado after the buyer wasn’t able to complete the deal.

In March, Peabody delayed interest-rate payments on two loans and said it may not have sufficient liquidity to sustain operations, warning of a possible chapter 11 filing.

With 29 mines the US and Australia and operations in India, China, Germany and elsewhere, the company sold 213 million tonnes of coal last year and has 7.5 billion tonnes of coal reserves.

Coal miners in the US have been particularly hard hit by power plants substituting with natural gas. According to a report by the US Energy Information Administration 2016 will be the first year that natural gas overtakes coal as the largest energy source in the US.

Between 2000 and 2008, coal was significantly less expensive than natural gas, and coal supplied about 50% of total US generation, but that will fall to less than a third in 2016.

US coal production fell to 900 million short tons in 2015, according to data from the Energy Information Administration, a 10% decline on the previous year. on Peabody declaring bankruptcy: “A harbinger of the end of the fossil fuel era”

Peabody 50th coal company to declare bankruptcy since 2012, stressing necessity of a just transition away from fossil fuels that prioritizes communities and workers

Blog from

13 April 2016

Brooklyn, NY — Peabody Energy Corporation, the world’s largest private-sector coal company, filed for Chapter 11 bankruptcy today, spelling the end of coal and a bleak outlook for the entire fossil fuel industry.

Coal has been in a structural decline since 2013 and today’s announcement highlights the need to create a comprehensive plan for a just transition away from fossil fuels.

“Peabody Energy’s bankruptcy is a harbinger of the end of the fossil fuel era,” said Jenny Marienau, U.S. Divestment Campaign Manager with “Peabody is crashing because the company was unwilling to change with the times — they doubled down on the dirtiest of all fossil fuels, and investors backed their bet, as the world shifted toward renewable energy. They have consistently put profit over people, and now their profits have plummeted. Our world has no place for companies like Peabody.”

As oil prices plummet and renewable energy attracts record levels of investment, Peabody is the latest major United States-based coal corporation to file for bankruptcy. Peabody is the 50th coal company to declare bankruptcy since 2012, following announcements from Alpha Natural Resources and Arch Coal in the last few months.

In their 2014 SEC filings, Peabody cited that the fossil fuel divestment movement “could significantly affect demand for our products or our securities.” During the Paris climate talks in December, and Divest-Invest announced that more than 500 institutions representing over $3.4 trillion had committed to some level of fossil fuel divestment.

“Peabody Energy has lost 95 cents on the dollar over the course of the last year. It’s more clear than ever that divestment is the morally and financially smart thing to do,” said’s Senior Global Analyst, Brett Fleishman. “The country’s largest pension systems urgently need to take a deep look at the fossil fuel companies on their books. This bankruptcy, in a series of others, will ripple through communities, leaving a wake of economic and environmental destruction. There is literally no reason every institutional investor shouldn’t divest from coal.”

In 2015, Peabody was found to have broken the law by providing false and misleading statements about the financial risks of climate change.

A coalition called on Peabody Energy’s President and CEO to take meaningful steps to protect the American public, the climate, public lands, and workers, calling on the company to withdraw pending coal lease applications, relinquish coal leases, and reclaim its mining operations.

“Institutions around the world are divesting from coal companies like Peabody because they see the writing on the wall: the fossil fuel age is coming to an end,” said May Boeve, Executive Director. “As we repower our economy with 100% renewable energy we must repower our communities, as well. That includes a just transition for Peabody’s employees and prioritizing workers in the fossil fuel industry. Peabody shouldn’t take these communities down with them.”

The groups also called on Peabody to ensure the needs of workers and retirees are fully met, and that communities—including the St. Louis community—are aided as they transition from coal.

“This is a company that willfully and deliberately sought to delay, dismantle or destruct climate action. Perhaps if they had spent more time and money diversifying their business rather than on lobbying against climate action and sowing the seeds of doubt about the science, they might not have joined the long (and ever growing) list of bankrupt global coal companies,” said Bill McKibben, co-founder of

This May, groups are coming together under an unprecedented mobilization to Break Free from fossil fuels, targeting major fossil fuel projects around the world. Through this platform, the global fossil fuel resistance movement will join actions taking place across 6 continents which aim to stop dirty fossil fuels and speed up the just transition to 100% renewable energy.

“We are on the brink of a historic, global shift in our energy system,” said Marienau. “It’s high time that our governments invest in a just transition for the security of communities and workers rather than bail out destructive corporations like Peabody whose inherent business model depends on planetary destruction.”

First coal exclusions from the Government Pension Fund Global

Norges Bank Press release -

14 April 2016

Norges Bank has excluded 52 companies from the Government Pension Fund Global after an assessment of companies and the new product-based coal criterion in the guidelines.

Norges Bank has decided to exclude 52 companies from the Government Pension Fund Global after an assessment of the new product-based coal criterion. The exclusions follow a first round of analysis by Norges Bank Investment Management. Further exclusions will follow in 2016.

Norges Bank’s Executive Board made the exclusion decision based on recommendations from Norges Bank Investment Management. The Executive Board has found that the recommendations satisfies the exclusion criteria and that the companies can be excluded from the fund (see § 3, subsection f, of the Guidelines for observation and exclusion from the Government Pension Fund Global).

Read the grounds for decision on product based coal exclusion (PDF)



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Coal Is Officially a Zombie Industry

Yet another major mining company filed for bankruptcy. How long can coal keep lurching?

By Daniel Gross

14 April 2016

And then there was one.

On Wednesday, Peabody Energy, the largest coal-mining company in the U.S., filed for Chapter 11 bankruptcy protection. Its stock is at about $2, and its market value is a piddly $38 million.

That left only a single stock in the Dow Jones U.S. Coal Index that is not in bankruptcy: Consol Energy, worth about $3 billion. The coal index is now off 93 percent in the past five years. One by one, many of the nation’s publicly held mining companies have filed for bankruptcy: Patriot Coal filed for Chapter 11 last May, Walter Energy sought protection last July, and Alpha Natural Resources succumbed in August. In January, Arch Coal, the second-largest U.S. miner, filed for Chapter 11. And so their stocks have stopped trading.

We’re witnessing something that we rarely see in America: the sudden and sharp collapse of a functioning industry. Simply put, coal production is in free fall. Through the first 14 weeks of 2016, U.S. coal production is off 32 percent from the year before, according to the U.S. Energy Information Administration. (And last year’s annual total was 20 percent off the 2011 total. Large, mature markets don’t typically fall that much in a year. Because manufacturing and mining require scale—investments, overhead, long-term employment contracts—a 30 percent decline in sales, output, or production can be calamitous. (Imagine what would happen to your family’s finances if your salary dropped 30 percent in a year while expenses stayed the same.) According to SNL Energy, 44 percent of coal produced in the U.S. is done so by a company that has filed for bankruptcy in the past four years.

The culprits are obvious. And what’s happening is a little cruel. The power system, which for so long relied uncritically on coal, has turned decisively against it. As recently as 2007, coal accounted for 48 percent of U.S. electricity production. In January, it was only 32.6 percent.

We’re witnessing something that we rarely see in America: the sudden and sharp collapse of a functioning industry.

Several forces are conspiring against coal.

First and foremost, there’s natural gas. One fossil fuel is being undone by another. Fracking has liberated vast new supplies of natural gas in the U.S. But the fuel can’t be exported abroad easily. The result: a supply of a really cheap, cleaner-burning fuel whose main purpose is to generate electricity. Many utilities and power-plant owners have switched to natural gas for economic and environmental reasons. In 2007, natural gas accounted for 21 percent of electricity produced in the U.S.; in January 2016 it accounted for 31 percent.

Regulation and policy are playing a significant role, too. The EPA has imposed new standards for emissions on power generation that discourage companies from building new coal-powered plants and from continuing to operate the ones they already have. Most states have enacted renewable portfolio standards, which dictate that a certain amount of power come from renewable sources. Virtually every utility in the U.S. has developed an integrated resource plan that describes how it will adapt to an era in which emissions might be capped. While they vary, the playbook is the same: burn a lot less coal, burn a lot more natural gas, add renewables like wind and solar in huge gulps, and focus on efficiency and storage.

I call it coal nullification. As the Sierra Club’s Beyond Coal campaign documents—often with glee—electricity plants that burn coal are being shut down at a rapid clip. The industry’s main domestic customers are simply disappearing. And this is not a cyclical phenomenon: Once coal is out of the power system, there will be immense pressure to keep it out. The U.S. continues to build electricity generation capacity to deal with plant retirements and rising demand in certain areas. But it just isn’t building any that burn coal.

There’s a procyclicality to coal’s misery. What is popular and has momentum gets more popular and gains more momentum as a result. The use of natural gas has encouraged more production of gas, which has led to a glut and low prices—which encourages more usage. State requirements and federal subsidies that promote the construction of wind and solar power at scale have helped make the industry more efficient, which helps bring down the cost of wind and solar and makes these alternatives more appealing. And in America, when industries gain size, they gain lobbying clout that helps them advocate for politics that further improve their lot. For example, the federal tax credit for wind and solar investment, which was supposed to expire at the end of last year, was instead extended for several more years. And as more states achieve the goals of having 20 or 25 percent of their power come from renewable sources, they set more ambitious goals: 50 percent in California, 100 percent in Hawaii.

On Thursday, Iowa-based MidAmerican Energy, which last year generated 47 percent of the electricity sold to its customers from wind power, announced it will invest another $3.6 billion in wind in the state. “When the 2,000-megawatt Wind XI project is completed, our annual renewable energy generation is expected to reach a level that’s equivalent to approximately 85% of our Iowa retail customers' annual use,” the company said. Five years from now, there may literally be no need for coal-fired electricity in the state.

The procyclicality works the other way. What is unpopular and loses momentum becomes more unpopular and loses momentum as a result. There’s still a lot of coal produced in the U.S.—even a 30 percent decline this year would result in more than 600 million tons of production. But the last time production was so low was in the 1970s. Employment in the coal industry has shrunk. And so, too, has the industry’s political influence. Yes, politicians at the state level in West Virginia, Kentucky, and Wyoming will lobby for the industry in Washington. But you’d be hard-pressed to come up with a worse set of pleaders for your cause with the Obama administration than senators like Kentucky’s Mitch McConnell and Wyoming’s John Barrasso.

Things will likely get worse for the coal industry in Washington because its problems are about to become the public’s problems. Coal is dirty, dangerous, and Dickensian. (Last week, the CEO of a mining company was convicted for violating safety laws over an episode in which 29 miners died; he was sentenced to only one year in prison.) When companies file for bankruptcy, the fact that they can’t meet their obligations to creditors like banks or bondholders isn’t that much of an issue. They can absorb the loss and wind up with ownership of the company. But bankrupt coal firms will have a hard time meeting their obligations to the environment, to employees, and to retirees. Which means they will either need a bailout or they will suffer further obloquy when they walk away from commitments. Both of those outcomes will make the industry less popular than it already is. And they will only further blacken coal’s dim future.

New Report: Nearly $1 Trillion Wasted Globally On Extraneous Coal Projects, Amount Could End World Energy Poverty

Second Global Coal Plant Tracker Report Shows Risk Of Excessive Investment Remains After Reported China Coal Permit Suspension

Sierra Club, Greenpeace, and CoalSwarm press release

30 March 2016

Washington D.C. - Today, the Sierra Club, Greenpeace, and CoalSwarm released Boom and Bust 2016: Tracking The Global Coal Plant Pipeline, the second annual report examining the precarious global coal plant pipeline. New investigations detailed in the report revealed that while the coal industry continues to push for the construction of more coal-fired power plants, in reality, coal plants are increasingly sitting idle in all of the world’s four largest markets, and global coal consumption is declining drastically. This is particularly evident in China where the government recently took the first step to curb runaway coal plant investment, after the country’s coal use plunged by nearly 6.4 percent in two years.

The report’s unprecedentedly detailed mapping of new coal-fired power plants indicates the reported suspension of new permits and new construction starting in half of China’s provinces could affect 60 percent of the 460 new coal-fired units that have been permitted or are in the permitting process.

With coal use on the decline worldwide, the estimated $981 billion needed to construct the proposed coal plant pipeline represents a massive investment in potentially stranded assets — resulting in an even further downward spiral for the global coal industry. In fact, this number is more than one-and-a-half times the amount that the International Energy Agency (IEA) estimates is needed to end energy poverty for the 1.2 billion people currently living without reliable energy access. On top of this staggering revelation, the report found that the additional new proposed coal capacity would result in over 130,000 more premature deaths worldwide each year from air pollution and finds that existing coal-fired power plants are responsible for a total of nearly one million premature deaths annually from coal-fired power generation.

“The era of Big Coal is clearly coming to an end, and it’s long past time to move beyond dangerous, outdated, and polluting energy sources toward an economy powered by clean, renewable sources of energy like solar and wind,” said Nicole Ghio, senior campaigner for the Sierra Club’s International Climate and Energy campaign. “Coal use keeps falling off a cliff and plants are sitting idle, yet more money is being wasted on misguided attempts at locking in this dirty, dangerous fuel. The hundreds of billions being thrown at coal could instead go toward the booming clean energy sector, helping more than a billion people get access to the clean, reliable electricity that fossil fuels have failed to deliver.”

“Although this research has revealed hundreds of billions being squandered on unneeded coal plants, there’s more at stake here than money,” said Ted Nace, director of CoalSwarm. “In terms of climate safety, the clock is ticking on the transition to clean energy. There is no time to waste.”

“As coal-fired power plants are rapidly becoming uncompetitive, and concerns about their massive health impacts grow, the coal industry is making a last-ditch push,” said Lauri Myllyvirta, senior global campaigner on Coal and Air Pollution at Greenpeace. “China alone is housing the largest power market investment bubble the world has ever seen. Even after announcing suspension of new permits in 13 provinces, the country could still bring over 500 new coal-fired power plant units online while power generation from coal is falling precipitously on clean energy growth and slower power demand.”

For more information contact:
Cindy Carr, Sierra Club, Washington, DC, +1 (202) 495-3034 or cindy.carr[at]
Ted Nace, CoalSwarm, California, +1 (510) 331-8743 or ted[at]
Lauri Myllyvirta, Greenpeace, Beijing, +86 157 1002 1563 or lauri.myllyvirta[at]

Coal: a fraud still being supported by Crédit Agricole and Société Général

Friends of the Earth France press release

30 March 2016

Paris, France - On the occasion of the publication of the 'Boom and Bust 2016' report from Greenpeace, Sierra Club and CoalSwarm [1], which assesses coal power projects around the world, Friends of the Earth France and Greenpeace called on Crédit Agricole and Société Générale to renounce the Tanjung Jati B power plant expansion project in Indonesia [2].

The world has not acknowledged the Paris Agreement and the international target to limit the rise of the global temperature well below the threshold of 2°C, and to move towards a target of 1.5°C above pre-industrial levels. Indeed, even as any new plant built today goes against this goal, regardless of the technology used, the new ‘Boom and Bust 2016’ report from Greenpeace, Sierra Club and CoalSwarm shows that in fact thousands of coal projects are still being planned, in spite of their economic, health and even energy-providing shortcomings.

Lucie Pinson, Private finance / Coface campaigner at Friends of the Earth France, commented:

“There is overcapacity and every new coal power plant only increases the risk of ‘stranded assets’. We know how to bring cleaner, lower cost energy to those still lacking such in many countries, and the environmental and health damage from coal is catastrophic, with thousands of premature deaths resulting from each new, additional piece of infrastructure. Yet thousands of coal plant projects still exist and could be built with funding from French banks which have pledged to stop financing power plants mostly in rich countries.” [3]

In Indonesia, Crédit Agricole and Société Générale are part of a group of banks interested in financing the construction of two additional 1,000 MW units at the Tanjung Jati B (TJB2) coal plant [4]. This project is part of the development plan of 100 new coal plants in Indonesia (5), a program likely to guarantee less energy to people who need it while guaranteeing returns for the mining industry hit by declining demand on international markets. Located on the island of Java, one of the most populated areas of Indonesia, and away from islands where power cuts are rampant, the project could double the number of premature deaths caused by the four existing units.

Lucie Pinson said:

"While BNP Paribas has withdrawn from the project (6), Crédit Agricole and Société Générale could be set to finance the future extension of a plant that already costs the lives of 1,020 people every year. We have clearly now reached the limit of the climate commitments adopted at the recent COP21. If banks have to phase out their general support to the coal sector, they should no longer directly support new coal projects, as Natixis and ING are already committed to doing. These kind of new projects only undermine efforts elsewhere, especially when clean alternatives exist.”

With an open letter, Friends of the Earth France, BankTrack and Greenpeace have called on Crédit Agricole and Société Générale to immediately withdraw from the proposed Tanjung Jati B project.

For more information contact:
Lucie Pinson, Private Finance / Coface campaigner, Friends of the Earth France, Tel: +33 679543715, Email: lucie.pinson[at]

Notes for editors:

1. ‘Boom and Bust 2016’ report, Greenpeace, CoalSwarm and Sierra Club

2. See the letter sent to the two banks here.

3. Crédit Agricole is committed to not finance power projects in high-income countries according to the classification of the World Bank, and Société Générale is committed to no longer finance in OECD high income countries, according to the same classification, respectively 6.1% and 4.1% of the coal market.

4. See the full climate, health and social impacts here and here (in French).

5. Indonesia envisions the construction of 35GW by 2019, of which 20GW, or 60%, would come from coal.

6. See:

Europe’s last coal mines struggle for lifelines

Producers in the Czech Republic, Poland and Romania try to stay afloat as losses mount.

By Sara Stefanini

14 April 16

Some of Europe’s last remaining coal producers, in the Czech Republic, Romania and Poland, are grasping for government support to keep from going under and taking thousands of jobs with them.

Talks in Prague and Bucharest this week coincide with the news that the world’s largest private coal company, Peabody Energy, filed for bankruptcy protection in the U.S.

The Missouri-based company said it did so in an effort to reduce its overall debt level, lower fixed charges, improve its operating cash flow and “position the company for long-term success.” But the news was widely seen as a sign that the end of coal mining is fast-approaching, at least in the developed world and especially following December’s Paris climate agreement.

“Peabody Energy, to the detriment of its investors and employees, is now bankrupt today because its leadership has been unable to adjust to new energy markets in which coal is being displaced by new energy sources,” said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, which aims to accelerate the shift away from fossil fuels.

The steady drop in international coal prices since late 2011, new competition from cheaper and lower-emitting natural gas in the past year, and an intensifying government focus on cutting carbon dioxide emissions — with policies such as carbon prices — have all helped push coal miners to the brink of survival.

Clouds over Central Europe

But for European companies that have been operating centuries-old deep mines at a loss over the past several years, even the task of closing mines and laying off or retraining employees is too expensive to handle alone. EU rules largely restrict governments from giving state aid to coal mines except to shut them down.

In the Czech Republic, shareholders in the country’s largest hard coal miner, New World Resources, were locked in negotiations with the government and agreed on Thursday to extend one of the company’s credit facilities from April 13 to April 22. NWR wants support for managing layoffs, retraining workers and other social costs, which it says would help keep it out of bankruptcy.

In Poland, where coal produces almost 90 percent of electricity, the government hopes to create a new coal company, Polska Grupa Górnicza, to take over the productive assets of Europe’s largest coal miner, the ailing Kompania Węglowa. Last year it posted a loss of 1 billion złoty (€233 million). JSW, a hard coal miner, had a 3.1 billion złoty loss in 2015. The Polish government is in negotiations with the European Commission over a 2.3 billion złoty rescue plan for the sector.

In Romania, coal workers staged a 320-kilometer “desperation march” to Bucharest this week to pressure the government to rescue coal mine and power plant operator Complexul Energetic Oltenia.

“Most of Central Europe’s mines are more high-cost than in the rest of the world, and prices are very, very low, so basically, they’re leaning on governments to support them and I think it’s getting more difficult for governments to do that,” said David Price, senior director of the global steam coal service at the consultancy IHS Energy.

The reason these mines are so expensive is that they date back to the early 1900s, and some even centuries earlier. The easy-to-reach coal has long been mined, leaving the deepest and most expensive-to-reach reserves. NWR’s hard coal mines, for instance, start about 1 kilometer below ground. That makes it impossible to compete with coal from cheaper open pit mines in places like the U.S. and Australia.

As Peabody sought bankruptcy protection, the Czech government weighed three options for NWR, and specifically its subsidiary in the southern part of the country, OKD: state rescue, state takeover, or insolvency.

“The government’s priority continues to be protecting the miners and their families and not assisting the company’s owners,” said Frankisek Kotrba, spokesman for the Czech ministry of industry and trade.

The accounting firm Deloitte estimated that a bankruptcy could cost the state 33 billion koruna (€1.22 billion), but the ministry believes the numbers to be “exaggerated,” Kotrba said. “However, Minister Jan Mladek in no way underestimates the possible social consequences, and is therefore seriously concerned with the situation around OKD.”

Coal fuels nearly 60 percent of the Czech Republic’s electricity and a large share of its heating. NWR, which owns mines in the Czech Republic and development projects in Poland, warned in December that it was running on negative cash flow despite reducing its operational and overhead costs by 42 percent over the past three years.

Survival would require closing its Paskov and Lazy mines. But the cost of that, including employee restructuring, is pegged at €85 million to €100 million. The company employees around 13,000 people.

“Challenging market conditions persist for our industry worldwide — with slower global industrial output pushing coking-coal prices lower,” NWR said in December. “The dynamics of the regional thermal coal market are also difficult, with local oversupply and aggressive pricing by certain competitors.”

In Romania, meanwhile, the focus is on the future of Complexul Energetic Oltenia, which operates 17 mines, produces 95 percent of Romania’s lignite and can generate up to 30 percent of the country’s electricity.

The company had announced plans to lay off 2,000 of its 15,000 employees from July. Media reports suggested the company owned a significant sum of money to the state in 2015, while the company said it did not have outstanding debt. The Romanian government, which holds a 77 percent stake in the company, put the blame on “chaotic management.”

“I would like those who lead [the company] to understand the responsibility they have and that they will not be offered magic solutions,” Corina Popescu, secretary of state at the ministry of energy, said in a statement following a working group meeting on the state of Romania’s coal sector. State aid to close uncompetitive mines could allow some mining to continue beyond 2018, according to the working group. It will publish its first report next week.

The working group said the biggest problem Romanian coal mines have faced over the past 20 years is “an acute lack of investments,” the government said. The sector has not seen any new investments since 2007. Labor accounted for 70 percent of the cost of producing coal in 2015, and the sector still relies on decades-old technology.

In Poland, mining unions are outraged after a rescue proposal suggested ending almost all of their extra benefits.

“We have to cut all costs because the price of coal has fallen by half,” Energy Minister Krzysztof Tchórzewski told a Polish electricity conference this week.

Europe’s dying coal industry

Coal miners have taken a battering from falling prices and policies aimed at replacing coal-fired power generation with cleaner sources like renewables. That has led to a string of mine closures across Europe in recent years.

The U.K. shuttered its last deep coal mine in December, marking the end of an industry that dated back as far as Roman times. Spain employs only 2,900 coal miners, down from 50,000 three decades ago, according to the government. Germany’s hard coal mines will lose valuable subsidies by 2018, as part of the government’s ambitious Energiewende transition towards renewable energy.

Coal-fired power is on a similar downturn, especially in Western Europe. Belgium switched off its last coal plant this month, Portugal aims to do so by 2020, and the U.K. and Austria by 2025.

“The way things are going, Europe is going to lose its coal industry,” said Price. “With all honesty, I don’t see why anybody would invest in a coal-fired power station in Europe at the moment, because European policy is pretty well excluding coal. Where are they investing? In Asia.”

Anca Gurzu and Kalina Oroschakoff contributed reporting to this article.

This article has been updated with Thursday’s negotiations between the Czech government and NWR.

Coal scam: CBI court convicts Jharkhand Ispat, two directors

The CBI court found Jharkhand Ispat and its two directors guilty of criminal conspiracy and cheating

Priyanka Mittal

28 March 2016

New Delhi - Jharkhand Ispat Pvt. Ltd. (JIPL) and two of its directors became the first convicts in the coal blocks allocation case on Monday when a special court found them guilty of criminal conspiracy and cheating.

Special Central Bureau of Investigation (CBI) judge Bharat Parashar ordered that the directors, R.S Rungta and R.C Rungta, be immediately taken into custody. He will pronounce the sentence on 31 March.

They were convicted in a case related to the North Dhadu coal block in the eastern state of Jharkhand.

The verdict is the first on numerous cases involving suspected irregularities in the allocation of coal blocks that rocked the previous Congress-led United Progressive Alliance (UPA) government. The Comptroller and Auditor General of India (CAG) said in a 2012 report that the allocation of coal blocks had led to a notional loss of Rs.1.86 trillion for the exchequer.

Scandals surrounding the coal block allotments and the 2008 allocation of telecom spectrum and licences damaged the image of the UPA government and contributed to its defeat in the 2014 general election.

In 2014, the Supreme Court cancelled the allocation of more than 200 coal blocks, finding the process arbitrary and illegal.

Monday’s special court may pave the way for faster disposal of other coal allocation cases.

“In the coming months, all cases pertaining to the coal scam will reach a logical conclusion,” said G.V.L. Narasimha Rao, national spokesperson for the ruling Bharatiya Janata Party (BJP).

“Such convictions will affect Congress both in the long run and short term. The question is law has taken its own course,” said A.K. Verma, Kanpur-based political analyst and political science professor at Christ Church College.

During the course of investigations, JIPL was found to have “grossly misrepresented” to the ministry of steel and ministry of coal a number of aspects to inflate its claim to the North Dhadu coal block, the prosecution said.

Lawyers for JIPL and the Rungtas argued that the prosecution’s case of criminal conspiracy and cheating was not sustainable, given that the coal ministry hadn’t allocated the block to the company.

In a 132-paged verdict, however, the court observed that the accused had made “false claims” “fraudulently” with the intention of deceiving the government of India.

It was clear that the activities of the two directors at various points in time were directed towards the “common objective of securing allotment” of the coal block in favour of JIPL, the verdict said.

The court, however, set aside charges of forgery against the accused.

In its verdict, the court observed that it was crystal clear that the actions of the “accused in making all such false claims knowing them to be false were actuated with an intention to deceive MOC (ministry of coal) and thereby Government of India”.

Many corporate houses and political luminaries are accused in the multiple cases related to alleged wrongdoing in coal block allocations. Most cases are at the pre-trial stage and on some, trial proceedings have begun.

Nineteen other cases investigated by CBI are pending before the court, which was set up to deal exclusively with coal block allocation matters. Two other cases probed by Enforcement Directorate are also pending before the court.

China stops building new coal-fired power plants

by Zachary Davies Boren

24 March 2016

China is cracking down on its severe and growing coal power overcapacity crisis, according to reports in the Chinese press.

The National Energy Administration (NEA) has ordered 13 provincial governments to stop issuing approvals for new coal-fired power plants until the end of 2017.

It has also told 15 provinces to stop building new coal power plants that have already been approved.

A quickfire Greenpeace analysis says this could affect up to 250 coal-fired power plant units with a collective capacity of 170GW.

Despite the new rules, more than 570 coal-fired units with 300GW of capacity could yet come online.


China’s coal overcapacity crisis is well documented, with Energydesk revealing that 210 coal-fired power plants with a total capacity of 168GW were given approval in 2015 alone.

It’s gotten so bad – with overcapacity reportedly reaching 20% – that China also announced earlier this year the closure of a thousand coal mines and a moratorium on new ones until 2019.

China’s red-hot coal power sector is fast cooling with losses on the horizon, warns Greenpeace study

Coal-fired power plants may start losing money from next year amid excess capacity, electricity pricing reforms and stricter environmental laws

25 April 2016

China’s coal-fired power plants – many of them state-owned – may start losing money from next year because of overcapacity, ­elec­tricity pricing reforms and tighter environmental constraints, ­according to a Greenpeace study.

The warning comes as the country’s top economic planner said on Monday that the government would curb power output from burning coal over the next three years to reduce excess ­capacity and fight air pollution.

How cleaner coal can play a part in China’s green ambitions

The National Development and Reform Commission also said it would set up a risk-assessment system to measure power production efficiency.

Yuan Jiahai, a professor at North China Electric Power University who led the Greenpeace study, said the past year’s investment boom in coal-fired power plants had been based on expectations of lucrative returns due to low coal prices and overpriced on-grid tariffs.

In major coal-power-producing provinces such as Hebei, Jiangsu and Guangdong, investors could recover their investments in less than three years, according to Yuan’s research. This explained why many provinces were approving new coal-fired power plants despite Beijing’s pledge to pursue a low-carbon path.

As the central government had delegated the power to approve such plants to local government agencies, a total of 210 coal-fired power plants that would cost billions of US dollars were approved in 2015 alone, according to the Greenpeace study.

China’s coal-fired power producers set to play the ‘rebalancing’ game

But a set of policy changes in the 13th five-year plan is expected to eat into profits, as the plants are now required to retrofit their generators with ultra-low emissions technology before 2020 and to join a nationwide carbon trading scheme from next year. This would raise the plants’ cost of generating electricity.

“The unreasonably high profit margins could quickly disappear in the next five years, and with more new power-generating units being built, more will lay idle,” said Yuan, who studied the efficiency of 60-megawatt power plants in six major electricity-producing provinces – Shanxi, Inner Mongolia, Xinjiang, Hebei, Jiangsu and Guangdong.

Electricity pricing reform – which aims to reduce government intervention and is already being implemented in small, incremental steps such as lowering on-grid tariffs – would also deal a blow to coal-fired power plants, though the reform could eventually be watered down due to vested interests, Yuan said.

China Electricity Council official Zhang Weidong said the present pricing system – in which the economic planner sets the on-grid tariff – contributed to the industry’s worsening overcapacity as firms were given false signals for economic returns.

China’s coal-fired power producers face tougher times after record profits this year

China Guodian Corporation chairman Qiao Baoping last month said the power sector had an overcapacity of 20 per cent.

The Greenpeace study also warned that shrinking electricity demand would further reduce power plants’ operating hours. Some plants in Guangdong could start incurring losses as early as next year, it said.

Yuan said China should set more stringent ecological boundaries to curb such power plants’ growth.

For instance, new projects should be banned in water-scarce provinces, he said.

Too early to hail dip in China's CO2, despite coal fall-study

Alister Doyle


28 March 2016

Oslo - Reports of a historic dip in China's carbon dioxide emissions in the past two years are premature because of uncertainty over data showing the pace of a decline in coal use by the world's biggest consumer, a study showed on Monday.

The International Energy Agency (IEA) has been among those saying that energy-related carbon dioxide emissions by China, the biggest emitter, fell in 2015 and 2014 in what it hailed as a shift to cleaner energy after years of fast growth.

"Headlines about falling emissions may be misinterpreting the numbers," the Center for International Climate and Environmental Research, Oslo, (CICERO) said in a statement of a report published in the journal Nature Climate Change.

China has promised to peak its carbon dioxide emissions by around 2030 as part of a 195-nation plan agreed in Paris in December to combat climate change, blamed for stoking more downpours, heatwaves and rising sea levels.

But CICERO pointed to uncertainties in China's coal data, and frequent revisions.

It said Beijing has reported that coal consumption, measured by weight, fell 3.7 percent last year as economic growth slowed. But China is also using higher quality coal, which releases more energy and carbon dioxide per ton when burnt.

By that yardstick, China's coal energy consumption fell by just 1.5 percent last year, it said.

Overall, CICERO estimated China's carbon dioxide emissions from energy use, including oil and gas, dipped by just 0.1 percent in 2015 after a gain of 0.5 percent in 2014.

"Given uncertainties in the statistics, it is not possible to conclude whether Chinese carbon dioxide emissions went up or down in 2015," said Glen Peters, an author at CICERO. China's climate envoy Xie Zhenhua said on March 7 that carbon emissions were still rising.

By contrast, the IEA reported a decrease of 1.5 percent in China's energy-related carbon emissions for 2015 on March 16, underpinning its wider conclusion that a rise of global emissions stalled for a second year even as the economy grew.

The IEA stuck by the conclusions.

Even taking CICERO's advice on coal data, "the finding of a decoupling at global level between emissions and economic growth would not change to any significant extent", IEA spokesman Greg Frost said.

Even so, the difference between CICERO's estimate of a 0.1 percent dip in Chinese emissions last year and the IEA's 1.5 percent fall amounts to 125 million tonnes of carbon dioxide, CICERO said, roughly the annual emissions of Belgium.

"China's emissions growth has clearly slowed a lot, regardless of whether it has actually reversed," lead author Jan Ivar Korsbakken said.

(Reporting by Alister Doyle; editing by Susan Thomas)


Natural gas about to overtake coal for power generation in the US

Cecilia Jamasmie

21 March 2016

Natural gas is on track to overtake coal as the most popular fuel for electricity generation in the U.S., where nose-diving prices and tougher regulations have pushed a number of producers to seek bankruptcy protection.

According to data released by the U.S. Energy Information Administration (EIA) last week, natural gas is set to provide 33% of generation in 2016, while coal — which once fired half of the country’s power needs — will likely fall to 32%.

"2016 would be the first year that coal loses out to natural gas."

That would be the first time that coal loses out to natural gas on an annual basis, although it has happened every month since April 2015.

Before 2008, coal was less expensive to burn than natural gas and so the fossil fuel accounted for half of all U.S. electricity generation between 2000 and that year. But since then, coal use has declined sharply and a growing number of banks —including Morgan Stanley and Wells Fargo — are now pledging to cut financing to the industry.

Renewables have increased their share of the electricity market, too. EIA estimates show non-hydroelectric generation, including wind and solar power, will be responsible for 8% for this year’s domestic electricity supply.

Hydroelectric power will have a 6% share, while nuclear power will remain fairly level year-over-year at 19%.


Lost in Lusatia: Lignite goes from asset to liability

Megan Darby

24 March 2016

The fate of 8,000 workers in Vattenfall’s lignite – brown coal – business will not be decided in Lusatia, their eastern German base.

It won’t even be decided in Berlin, the federal capital. It’s London where the financiers will trade the five opencast mines and four power stations.

“We are the carpet, not the salesman,” says Rudiger Siebers, chairman of the company’s general works council and IG BCE union representative.

A mining region since the mid-nineteenth century, Lusatia is proud of its industrial heritage. Yet there is a sense that resistance to change is giving way to resignation, as its greatest natural asset becomes a liability.

Siebers is showing journalists Welzow Sud, a vast open pit with a power plant on the horizon. Vattenfall has built a viewing platform, the better to see how it tears open the landscape to reach a thin layer of soft, crumbly coal. A machine the length of 15 London buses is excavating in the distance; no people are visible.

Nor do you see the 136 villages bulldozed to make way for mining, points out co-guide and anti-lignite campaigner Thomas Burchard.

One of the cheapest and dirtiest forms of generation, lignite has clung to a 25% share of the German power mix. Even as renewables ramped up fast, the government prioritised a phase-out of nuclear. Surplus electricity – some 10% – is exported.

It is one reason why the country’s greenhouse gas emissions rose slightly last year: 0.7% according to official estimates. And it is a sector the government cannot afford to ignore as it looks to slash CO2 95% by 2050.

As recently as 2014, Vattenfall was planning to expand production – a move that would mean razing more homes. Along with groundwater contamination, that is Burchard’s main concern: “It’s hard to explain why somebody’s house should be torn down so somebody else can make a profit selling electricity abroad.”

Now, the Swedish state-owned utility is under political pressure to clean up its portfolio. It wants to sell off the polluting business. But the tide is turning and buyers are scarce.

Valued at around €2 billion in October 2014, several reports now estimate its worth in negative figures, with bidders demanding cash for decommissioning. The main interest has come from Czech firms, but CEZ ruled itself out, leaving Czech Coal and EPH to submit binding offers.

It vindicates Greenpeace Sweden, which sought to acquire the assets in order to shut them down. Once social and environmental costs were factored in, the NGO said the net liabilities amounted to €2 billion. It was excluded from the bidding, however. Vattenfall is not commenting on the process.

What has changed? The German government has no policy to end coal burning – yet. But after 195 countries agreed a pact in Paris last December to tackle climate change, it looks inevitable.

Clean energy policies are already beginning to bite. Power prices, depressed by a state-backed surge in renewable generation, have fallen around 40% since Vattenfall announced the sale. Utilities are making losses on lignite in an oversupplied market.

More direct intervention could be needed to finish the job, but this is sensitive territory. A previous plan to impose a levy on old coal plants was dropped after an industry backlash.

Timetable taboo

Officials at the environment ministry studiously avoid naming any end dates, in a press briefing. They do not wish to prejudge the 2050 climate strategy due to be presented to cabinet in June.

Ministers for environment, foreign affairs, economics and energy are equally silent on the matter, at an international conference in Berlin to promote their renewables policy.

In a Guardian article, top economics official Rainer Baake acknowledges the challenge of keeping coal, oil and gas in the ground. But while stressing the importance of avoiding investment in new mines, he ducks the issue of what to do with existing capacity.

Others have made suggestions. Agora Energiewende, a think tank specialising in Germany’s energy transition, recommends eliminating coal from the power market by 2040. It is a conservative timeline, which would see Germany breach its 2020 emissions target, but – analysts say – hit subsequent milestones.

Barbara Praetorius, deputy director at the organisation, says it is “politically unrealistic” to shut down plants faster.

The radicals at Barclays Bank, on the other hand, say German coal will be worthless within 15 years if the Paris deal takes effect. Analyst Mark Lewis explains in a research note the international goal to hold warming “well below 2C” leaves very little room for lignite after 2030.

For locals in a panel discussion in Grossraeschen, a village near Welzow Sud, that is an alarming prospect.

Simone Wendler, chief reporter at Lausitzer Rundschau newspaper, describes how the region has floundered economically since East and West Germany reunited in 1990. The number of jobs in mining fell from around 100,000 to 8,000. Despite efforts at regeneration, many people moved away, retired early or became unemployed.

Under business as usual, the Welzow Sud has enough lignite to run until 2040. If expanded, it would be 2050. The only other major industry is represented by chemicals firm BASF.

“I would like to see Lusatia being an industrial region even in a post-coal era, but I have some doubts,” says Wendler. “The region is really trying to come up with new ideas… [but] there are very few reasons to come here for other companies. It is not a place where a company listed on the German stock exchange wants to have its headquarters.”

Maik Bethge, head of the chamber of commerce for Cottbus, the nearest city, attempts to be more upbeat. “Lusatia does see itself as an energy region, both in the past and also for the future,” he says. “We will face difficulties, there is no doubt about it, but we are also prioritising innovation.”

Lusatia is not without natural charms. Wind farms rise above spindly forests of pine and silver birch. Villages have duck ponds and colourful plastic eggs hung on bushes for Easter.

Grossraeschen is trying to rebrand as a tourist destination, turning a former coal pit into an artificial lake. A 4* hotel stands ready to accept hordes of holidaymakers. Lakeside apartments were planned.

Unfortunately, the water has not arrived. It is several years behind schedule filling up from a nearby river. A marina for yachts stands high and dry.

A developed country, Germany is expected – and purports – to lead on decarbonising its economy. Under the Paris climate deal, emissions worldwide must be reduced to near zero in the second half of the century. Mining communities in Australia, China and India are ultimately headed for their own transformation.

As Lusatia grapples with its new reality, the world is watching.

Megan Darby’s travel and accommodation in Germany was paid for by Clean Energy Wire

Two Czech firms bid for Vattenfall's German coal and power business

Jason Hovet and Arno Schuetze


16 March 2016

Two Czech firms have submitted bids for Vattenfall's loss-making lignite coal mines and associated power plants in Germany, but to reach a deal the Swedish state-owned group might have to pay into covering future decommissioning costs.

The sale, launched at the end of 2014, includes roughly 8,100 megawatts (MW) of lignite-fired power plants, which generate about 10 percent of Germany's total electricity, as well as the mines, employing about 8,000 people.

Lignite miner Vrsanska Uhelna, part of Czech Coal, and privately-held energy group EPH together with private equity group PPF Investments, have both submitted binding offers, the firms said on Wednesday. German energy group Steag and Australian investment fund Macquarie did not make a formal bid but to stay in the negotiations suggested setting up a foundation that would take over the lignite assets and liabilities, a source familiar with the proposal said.

Vrsanska Uhelna did not provide any details on its bid, but EPH said its offer reflected the real value of the assets and liabilities attached to them.

German power prices have fallen by around 40 percent since Vattenfall first launched the sale.

"In the forthcoming years, unless the power prices will materially recover, the company will not be in a position to distribute any dividends and rather will generate a negative cash flow," Daniel Kretínsky, chairman of EPH, said of Vattenfall's lignite business.

Two people familiar with the matter said the business was expected to lose up to 300 million euros a year before interest, tax, depreciation and amortization over the next five years. While Vattenfall has hedged about 80 percent of lignite-derived electricity sales this year at prices above the market, very little was hedged for 2017/2018, one of the sources said, adding the hedge was worth more than a billion euros in total.

Separately, Vattenfall’s lignite operations face decommissioning costs of a nominal 4 billion euros by 2080, or 1.5 billion on a 2015 discounted basis, which has been accounted for in the offers, the people said.

EPH's assessment of the assets' enterprise value - not accounting for the hedge - is negative, a person familiar with the bid said, adding that EPH had still offered a positive purchase price after taking into account the hedge. Other sources familiar with the matter had said that bidders had been looking to seek a transfer from Vattenfall of 1.2-1.4 billion euros to cover the future liabilities. Another Czech firm, power utility CEZ, said on Wednesday it had decided not to bid due to falling power prices and uncertainty over the future for coal-fired plants in Germany.

Vattenfall has declined to comment on the bidding process, but has previously said it expects to make a proposal regarding the lignite sale to its owner, the Swedish government, during the first half of 2016.

Ingvar Matsson, an analyst at Swedbank Markets, however, said he didn't expect Vattenfall to clinch a deal during the first half of 2016, but it was still possible later this year. "It could be still possible to see the deal by the end of this year if Vattenfall agrees with a buyer on transferring provisions set aside for plant and mine decommissioning," he told Reuters.

Vattenfall has set aside about 14.5 billion Swedish crowns (1.57 billion euros) for future expenses of mining, gas and wind operations and other environmental measures in 2014, the latest numbers available show. Most of these relate to lignite decommissioning, Mattson said.

(Writing by Nerijus Adomaitis; Editing by Keith Weir, Greg Mahlich)

How Montanans stopped the largest new coal mine in North America

Nick Engelfried

24 March 2016

Montana communities won a victory against one of the world’s biggest coal companies earlier this month, when Arch Coal abandoned the Otter Creek mine – the largest proposed new coal strip mine in North America. The story of how the project imploded is one of people power triumphing over a company once thought to be nearly invincible.

To many observers, the Otter Creek project once seemed unstoppable. It certainly appeared that way in 2011, the year I moved to Missoula, Montana for graduate school. Then-Democratic Gov. Brian Schweitzer enthusiastically supported the mine, and coal more generally. Forrest Mars, Jr., the billionaire heir to the Mars candy fortune, had just joined Arch and BNSF Railways in backing a proposed railroad spur meant to service Otter Creek. Arch and politicians like Schweitzer predicted a boom in coal demand from economies in Asia.

But what they weren’t counting on was a vocal and active region-wide opposition. The coming together of ordinary people — first in southeast Montana, then an ever-growing number of communities throughout the Northwest —to oppose the Otter Creek mine says much about how land defenders and climate activists are learning to fight back against the planet’s biggest energy companies. The roots of this recent victory go back more than 30 years.

Origins of the Otter Creek mine

Eastern Montana is known for its arid climate, but the Tongue River Valley just north of the Wyoming border supports a lush landscape of willows, pines, sagebrush and grassy pastures. The river and underground aquifers make the valley ideal for agriculture. On the east side of the river, where the Otter Creek tracts are located, a mix of state and private land supports farms and cattle ranches. To the west is the Northern Cheyenne Reservation.

Decades before Arch proposed the Otter Creek mine, Southeast Montana was already ground zero in a fight over the nation’s energy future. In 1971, as the United States looked for alternatives to foreign oil, the Bureau of Land Management published a study calling for massively increased coal production in northern Plains states. It proposed building 21 new coal-fired power plants in Montana and opening vast new mines to feed them. Implicit was the assumption that energy developers would run into little resistance in the sparsely populated Plains.

Corporate representatives tried to persuade ranching families to sell their land for mines, then threatened them with eminent domain. However, many landowners didn’t back down. “I told that son-of-a-bitch with a briefcase that I knew he represented one of the biggest coal companies and he was backed by one of the richest industries in the world, but no matter how much money they came up with, they would always be $4.60 short of the price of my ranch,” said landowner Boyd Charter, according to Northern Plains Resource Council, an organization that formed in 1972 to oppose the mining. By the end of the decade only one major new coal plant had broken ground in Montana, and plans to turn the state into a large-scale coal sacrifice zone were in tatters.

Then, in the 1980s, the coal industry proposed a new Tongue River Railroad to link northern Wyoming coal fields to existing Montana rail lines. The plan floundered for decades amid local opposition, but in 2011 the Tongue River Company was bought up by Arch Coal, BNSF Railways and Forrest Mars, Jr. Mars, who owns a private ranch in area, formerly opposed the railroad but apparently bought in with the understanding that the preferred route would be shortened to not cross his property. Instead of hauling Wyoming coal, this new version of the Tongue River Railroad would service Arch’s Otter Creek mine. The coal industry would try again to turn Montana into a coal extraction colony.

Their plan was helped along the previous year, in March 2010, when the Montana State Land Board, chaired by Gov. Schweitzer, voted on whether to lease state lands at Otter Creek to Arch. Ranchers concerned about damage to aquifers, high school students worried about climate change and other concerned citizens at the meeting urged the board to vote no. Just before the vote, activists from Northern Rockies Rising Tide disrupted proceedings by chaining themselves to Land Board members’ desks. The protest drew attention to what was at stake. But Land Board members reconvened and voted 3-2 in favor of the lease.

Now all Arch needed to break ground was a mining permit from the state, and a permit to build the Tongue River Railroad from the U.S. Surface Transportation Board. The battle lines were drawn.

From Tongue River to the coast

What happened at Otter Creek would affect communities throughout the Pacific Northwest. Coal train traffic through the area was already up, hauling coal from existing Wyoming and Montana mines to British Columbia ports. If Otter Creek and a series of proposed new coal export terminals in the United States were built, the number of these trains would skyrocket.

“I noticed more and more coal trains rumbling past my home,” said Lowell Chandler, who was a senior at the University of Montana and lived next to the railroad in Missoula when I met him in 2011. “They were polluting my air with toxic diesel emissions and coal dust. Then I found out about the massive coal export proposals in my state and the Northwest region.”

In places like Missoula, disproportionately lower-income neighborhoods are directly across the street from the railroad. An industrial yard used to refuel trains and connect and reconnect train cars is a major source of pollution. Residents told of sounds like bombs going off in the middle of the night as rail cars were joined together, of coal dust on their windowsills, and of choking on diesel fumes from idling locomotives.

I joined Chandler and other UM students in starting a group called Blue Skies Campaign in 2011, to work in coordination with rail line neighborhood residents and push back against the coal trains. Blue Skies’ first action was a protest outside a Wells Fargo, at the time a major coal industry funder. Later we partnered with Northern Plains Resource Council and other groups on a coal trains forum that drew over 200 people. We organized to attend city council meetings, coordinated rallies, and held street theater and protests. But we knew we had to do more.

In August 2012, Blue Skies coordinated the largest energy-related nonviolent civil disobedience in Montana up to that time. The Coal Export Action, a five-day sit-in at the State Capitol, was a protest against leasing of state lands to coal companies. Twenty-three people were arrested and hundreds more attended to show support. “Before putting my body on the line during a sit-in, I had never participated in nonviolent civil disobedience,” said Corey Bressler, a UM student arrested on the second day. “This swelling of people sent a powerful message to decision makers that Montanans and Americans want to shift away from fossil fuels toward a greener future.”

The next few years saw rail line communities turn to direct action repeatedly. Protests on the railroad tracks delayed coal trains, with a 2015 blockade preventing a train from entering downtown Missoula for almost an hour. In April 2014, 1,500 Montanans in more than a dozen communities rallied in a day of actions for clean energy. Other rallies and smaller protests occurred with increasing regularity. “There is personal power in a collaborative response to a shared threat,” said Cate Campbell, a retired railroad brakeman from Frenchtown, Montana who was arrested multiple times. “In taking direct action I found an inner feeling of purpose and commitment.”

Meanwhile, Montana had just experienced some of its worst-ever droughts and fire seasons, moving climate change to the forefront of the coal debate. In 2013 a new group, 350-Missoula (a grassroots affiliate of the climate group made stopping the Otter Creek mine its priority.

350-Missoula – a group of retirees, teachers, nurses, educators and others – worked with Blue Skies to organize rallies and civil disobedience. They also pushed elected officials to take a side in the Otter Creek fight. In 2014, Missoula’s City Council formally asked that environmental reviews for Otter Creek and the Tongue River Railroad include public hearings in Missoula. Local state legislators supported this request. In Whitefish (along Montana’s northern rail line) groups like Glacier Climate Action persuaded their city council to take similar action.

In the summer of 2015, the Surface Transportation Board opened a public comment period on the Tongue River Railroad. Activists in Missoula tabled at public events and street corners, gathering more than 4,000 written comments. Groups throughout the Northwest sent alerts to their members. Legislators and local governments, including the city of Missoula and Missoula County, submitted concerns about coal trains.

Communities closest to the mine site mobilized. Public hearings in Ashland and Lame Deer, on the Northern Cheyenne Reservation, were attended by 100 and 300 people respectively (the total populations of Lame Deer and Ashland are about 1,000 and 800). Most attendees were Northern Cheyenne members opposed to the railroad. The coal industry had tried to win over residents with promises of jobs, but these efforts seemed to have failed miserably. Toward the end of the comment period, the Northern Cheyenne Tribal Council unanimously passed a resolution opposing the Tongue River Railroad.

More than 100,000 comments were submitted by groups opposed to the railroad before the comment period ended. That fall, over a hundred people representing most of Montana’s major towns gathered at the State Capitol for a “Keep It In The Ground” climate rally. Meanwhile, regional and global pressures on Arch Coal compounded local opposition to the mine, changing the equation in an approval process that had once seemed inevitable.

The decline of King Coal

In 2010, Arch Coal competitor Peabody announced “coal’s best days are ahead.” However, it was clear even then that a combination of grassroots organizing, new regulations for polluting power plants, and falling prices for cleaner energy was causing U.S. coal use to drop. What came as a surprise was that coal consumption in Asia, especially China, failed to make up for declining U.S. demand.

Some racism was implied in the coal industry’s assumption that residents of China and India would willingly tolerate pollution levels unacceptable to North Americans. In fact, public concern about pollution created a crisis for the Chinese government. Last April, 10,000 people in China’s Guangdong Province turned out to protest a recently-built coal plant. The government has begun closing mines, reducing coal imports and ramping up renewables. China’s coal consumption declined 3 percent in 2014, and 4 percent in 2015. India’s coal use is still growing, but new power plants have run into such fierce opposition that many will likely never be built.

It turned out U.S. coal companies couldn’t even maintain export levels from a couple years ago. In 2015, Cloud Peak Energy announced it would stop exporting coal through British Columbia. In this environment, a series of announcements beginning late last year showed cracks forming in Arch’s Otter Creek plans.

In November, Arch announced it was asking the Surface Transportation Board to put the Tongue River Railroad permit review on hold. Companies rarely make requests like this when they are confident a review will go well for them. Statements from Arch claimed Otter Creek would still move forward, but an updated mining application Arch intended to file with the state in December never materialized. In January, Arch filed for bankruptcy.

Arch was just the latest (and biggest) U.S. coal company to go bankrupt in the last few years. The move was long anticipated, but now Montanans waited in suspense. Would this be the final blow to the Otter Creek mine, or would Arch find a way to salvage the project and turn the company’s troubles around?

On March 10, Arch announced it was suspending attempts to extract coal at Otter Creek. A statement released by Northern Plains Resource Council, from Otter Creek rancher Dawson Dunning, summed up the feelings of many locals: “Ranchers and irrigators in southeast Montana can sleep well knowing their water will be protected.”

A turning point?

“How many times have I read about projects that would increase carbon emissions, and felt helpless to stop them?” said Marta Meengs, a nurse who helped start 350-Missoula. “Otter Creek was different. People’s civil disobedience, tabling for public comments, and conversations with legislators actually showed results and helped stop what would have been one of the largest coal mines in North America.”

The defeat of the Otter Creek mine is one example of a larger, encouraging trend. Climate activists and land defenders are learning to take on the world’s biggest energy companies, fight huge fossil fuel projects, and win. Every industry loss strengthens the position of activists going into the next round, just as declining coal consumption in China contributed to the Otter Creek victory. And the fossil fuel industry is losing more and more often, from Shell and Arctic oil to TransCanada and the Keystone XL Pipeline to Arch Coal and Otter Creek.

The worldwide climate movement is driving down global carbon emissions in concrete, measurable ways. It’s a grassroots movement where people lead and government officials follow (when they show up at all). There’s still a long way to go before all remaining fossil fuels are left in the ground. But progress is undeniable, and we can expect more wins as the movement grows.

In the words of Lee Metzgar, a retired biologist and member of 350-Missoula who participated in the Otter Creek protests, “Our political system has demonstrated its inability to find adequate solutions to the climate crisis. It is time for everyone who wants to leave future generations a livable world to be in the streets.”

Arch Coal suspends mine permitting efforts for Otter Creek reserves

Harleigh Hobbs

11 March 2016

Arch Coal is suspending efforts to secure a mining permit for the Otter Creek coal reserves near Ashland in southeastern Montana, due to capital constraints, near-term weakness in coal markets and an extended and uncertain permitting outlook.

Arch secured lease rights to approximately 8300 acres of state-owned minerals in the Otter Creek area in 2010. Since that time, the company has engaged state regulators through the permitting process in order to obtain the approval to mine. That process has taken longer than anticipated, and further deterioration in coal markets has led to the decision to suspend the permitting effort.

Arch Coal indicated that the Powder River Basin remains an important coal supply region for domestic and international power generators. However, given current conditions, the company can no longer devote the time, capital and resources required to develop a coal mine on the Otter Creek reserve block.

According to the company, it will remain committed to navigating a challenging market environment, executing upon its prudent capital allocation strategy and preserving liquidity. This step will allow Arch to further intensify its focus on operating safe, responsible and low-cost mines.

Arch Coal suspends plans for Otter Creek mine in Montana

Matthew Brown

Associated Press

10 March 2016

Arch Coal suspended its application for a major mine in southeastern Montana on Thursday, two months after the mining giant filed for bankruptcy protection and amid broader struggles for the coal industry that have reversed its once-bright prospects in the state.

The St. Louis-based company cited a weak coal market, a shortage of capital and an uncertain permitting outlook in announcing it was suspending the proposed Otter Creek mine.

The move marks a major blow to longstanding efforts to expand mining in the Powder River Basin along the Montana-Wyoming border, the nation’s largest coal-producing region. Arch had invested at least $159 million to acquire coal leases in the area.

“Arch can no longer devote the time, capital and resources required to develop a coal mine on the Otter Creek reserve,” the company said in a press release.

The Otter Creek mine would have extracted up to 20 million tons of coal annually from state-owned and private leases south of Ashland near the Wyoming border. Fuel from the mine was to be sold domestically and in overseas markets.

Plans to build a $400 million railroad to the mine site were put on hold indefinitely last year.

The loss of the two projects sinks near-term hopes for a coal-fueled economic boom in southeastern Montana, a largely agriculture region that’s failed to attract mining on the scale of the massive strip mines just to the south in Wyoming.

A 2012 economic impact study of Otter Creek funded by the Montana Contractors Association said it would have generated hundreds of high-paying jobs and $91 million in annual tax revenues.

But the proposal - already more than three years behind schedule - faced strong opposition from nearby landowners, members of the Northern Cheyenne Tribe and conservation groups such as the Northern Plains Resource Council and Sierra Club.

They warned a mine would industrialize rural communities and threaten water supplies relied on for irrigation.

“The ranching economy and culture out there is really strong and we didn’t want that to change,” said Dawson Dunning, whose family operates a ranch along Otter Creek. “It would turn that land from agriculture to open pit mining.”

Thursday’s move by Arch is likely to reverberate through the 2016 election season.

Montana Gov. Steve Bullock defended his administration’s handling of the company’s application, after state environmental regulators last year raised concerns over Otter Creek’s potential to harm local water supplies.

Those worries prompted the Montana Department of Environmental Quality to tell Arch representatives in March 2015 they needed to submit more information before the application could advance.

Arch said in Thursday’s press release that the process “had taken longer than anticipated.” DEQ Director Tom Livers said it was up to Arch to take the next step.

Republican Greg Gianforte, who hopes to challenge Bullock this fall, accused the Democratic governor of refusing to issue a permit to Arch. But Bullock said the problems facing the coal industry stretch beyond Montana and reinforce the need for a “responsible approach” to developing the state’s energy resources.

The Montana Land Board sold the public mineral leases involved in the mine proposal to Arch Coal in 2010 for $86 million. The company paid $73 million for adjacent leases from Great Northern Properties, a Houston-based company that holds coal reserves throughout the western U.S.

The Otter Creek leases hold an estimated 1.5 billion tons of coal.

What will happen to those leases is uncertain. Arch spokeswoman Logan Bonacorsi did not immediately respond to questions from The Associated Press. The company boasts the second largest coal reserves in the U.S. but was driven into bankruptcy after amassing billions of dollars in debt.

Otter Creek’s critics said the company’s permitting delays offered a convenient excuse for a project that no longer made economic sense. Demand for coal has plummeted in the past several years amid competition from cheap natural gas and increased reliance on renewable energies to generate electricity.

“It’s the market. Period,” said Anne Hedges with the Montana Environmental Information Center.

Federal panel kills Tongue River Railroad

By Tom Lutey

27 April 2016

The $405 million Tongue River Railroad proposed for southeast Montana is the latest casualty of the crashing coal economy.

The federal Surface and Transportation Board published its unanimous decision Tuesday to kill the coal railroad given the recent bankruptcy of Arch Coal.

Arch was to develop the Otter Creek Mine south of Ashland, which the railroad was to serve. In March, Arch suspended its environmental permitting application to Montana's Department of Environmental Quality.

"At this time, there appears to be little prospect that Otter Creek Coal’s mine permit will be secured in the foreseeable future," the STB concluded. "Otter Creek Coal and its parent, Arch, have both filed for bankruptcy, and Otter Creek Coal has suspended its application for an MDEQ mining permit indefinitely."

The Otter Creek Mine had been in the works since 2010, when Arch Coal agreed to pay Montana $85.84 million for the development rights to 14 state-owned coal parcels in southeast Montana’s Otter Creek Valley. At the time, Arch Coal representatives told The Gazette that they would break ground at the mine in five years and be in full production by 2016.

Arch partnered in the Tongue River Railroad Co. with BNSF Railway and TRRC Financing, a limited liability company.

"The Tongue River Railroad Co. is disappointed with the decision today to dismiss our current application," said Matt Jones, BNSF spokesman for Montana and Wyoming. "In the event the development conditions improve in the future, renewing the project will require a new permit application and environmental review."

Last November, the railroad collaborators asked the federal government to suspend the permitting process for the would-be railroad until Otter Creek Mine’s permits were approved.

Neighbors who have battled Otter Creek Mine for decades weren't ruling out another mine proposal resurfacing at some point.

"I'm a little hesitant to say it's over, because for 30 years it hasn't been over," said Clint McRae, a rancher and member of Northern Plains Resource Council.

It was Northern Plains that asked the STB to reject the developers’ request that the Tongue River Railroad application be suspended, but kept alive. Tuesday’s published decision was a win for Northern Plains.

"It is certainly a step in the right direction," McRae said. "This decision amplifies what we've said all along, that this is a highly speculative venture that doesn't have any markets and shouldn't go forward."

The railroad was running into stiff opposition not only from environmentalists objecting to coal development, but also from the Northern Cheyenne tribe, which last fall cited concerns about damage to tribal culture and the environment when asking STB to reject the railroad.

The coal economy is in rough shape. Natural gas, priced lower than coal, is poised to take over coal's spot as the nation's top source for electricity generation this year, according to the federal Energy Information Administration.

Coal exports aren't doing well either. With world coal supply exceeding demand, sale prices haven't been high enough to make it worthwhile to haul Powder River Basin coal by rail to the Pacific Northwest for shipping.

Three of America's largest coal companies — Arch Coal, Peabody Coal and Alpha Natural Resources — with mines in Wyoming and Montana have filed for bankruptcy in recent months.

Public concern about climate change has also driven states like Washington and Oregon to pass laws edging utilities away from coal power.

The federal Clean Power Plan rolled out last year might also require states to phase in cuts to greenhouse gas emissions by 2035, including in Montana where emissions cuts of 47 percent are prescribed. The Clean Power Plan is on hold pending litigation.

A village disappearing

Romanian villagers fight for their homes against a coal giant and their own government.

by Alexandru Mustata

Bankwatch -

March 2016

People in Runcurel, a small village in the south west of Romania, have lived between coal mines for 40 years. But after decades of putting up with noise, dust and a landscape that leaves a lot to be desired, the villagers were informed that they are now in the way of national interest.

The lignite mine Jilț North is running out of coal and the mine’s operator, the state-company Oltenia Energy Complex (OEC) needs the land on which peoples’ houses are standing. As negotiations failed because locals demanded fair compensations, the government passed a decision this winter to expropriate them for 1 euro per square meter. The 400 something villagers are now facing an urgent uphill battle against a goliath threatening to evict them from their homes in the next weeks, without receiving enough to start life anew.

But the villagers’ troubles with the coal company OEC reach farther back in time.

The heavy industrialisation of Romania under communist rule needed a significant amount of energy to fuel the planned growth. Progressively, vast and rich natural resources were to be exploited, from gold and iron to uranium or petrol. To illuminate the country, gas from the heart of the earth, coal from its crust and water running on the surface were harvested in power plants day and night.

Huge monsters of steel cut down forests between age-old villages to dig out what was underneath them.

These were dramatic changes for a mostly rural country. Starting with the 1960s, over a dozen lignite mines and two power plants were built in Gorj alone, one of 41 counties. Huge monsters of steel cut down the forests between age-old villages to dig out what was underneath them. The villagers didn’t mind: after all their land anyway went to the People’s Republic, the hope for steady employment and the comforts of modern life seemed compensation enough.

Today, these comforts still haven’t reached Runcurel.

Driving down an unmarked winding road separating the Jilț North and Jilț South mines you see an old church and cemetery, and later several houses. What you won’t find are street lights, even though Oltenia Energy Complex (OEC) with its 11 mines and four power plants can sometimes deliver up to 30% of the power used in Romania. The homes aren’t better off either – indoor plumbing means at most a sink in the kitchen.

Still, people living here aren’t complaining too quickly. Even today, when Romania has one of the best energy mixes in Europe and is therefore less dependent on coal than ever, everybody seems to be in favour of mining.

I have met people who couldn’t sleep because of the non-stop noise from the power plants; people whose crops were ruined by the thick dust settling everywhere during dry summers; and even people who have lost family members to illness directly related to pollution from the extraction and burning of coal. They all sing the same song: “We don’t want mining to stop, we don’t want the complex to close down. All we want is to be treated fairly, to be allowed to survive.”

The fear of change is understandable: With roughly 15.000 employees today the company is the country’s third biggest employer, surpassed only by other state giants - the National Post and the Romanian Railways. Having dropped from 45.000 employees in 1994, however, the company is in further decline. Last year alone, OEC recorded a loss of EUR 200 million.

One night in September 2015, the on-duty police officer in Runcurel was woken up by a strange call from a train conductor. The man informed him that 40 waggons full of coal are unable to continue their trip from the Jilț mine to the Turceni Power Plant.

The rails were blocked by a car parked right on the tracks. It belonged to Ionuț Purdescu, the owner of the land that the railroad crosses. Ionuț’s unusual parking spot was his form of protest against the company that denies him adequate compensation for using his land.

After the Romanian Revolution of 1989, properties taken by the communist state were restored to their original owners or their descendants. In Runcurel, this included parcels of land already used by Oltenia Energy Complex. The locals tried to sell their properties to OEC, but the prices the company offered were several times below the market price.

Instead of selling, some residents negotiated a job for themselves or for family members in the company, allowing the company to use their land free of charge. Since the only other option for survival is substinence agriculture, this seemed like a reasonable choice. But such deals were only made occasionally and the employment was always for a limited time.

Ionuț Purdescu was less successful than others. Before regaining his property from the state, he had studied Electromechanical Engineering at Petroșani University and he has been employed at OEC for many years. With the coal company’s railway right across it, the land Ionuț inherited from his family is an unusable burden for which he has to pay taxes.

After many failed negotiations to sell his land, Ionuț decided to demonstrate more drastically his right to receive compensation from OEC. That night in September 2015 he decided to park his car on his own property - in a spot where the railway happened to be as well.

At 8 AM the next morning, after interventions by the local police captain who is also a family friend, Ionuț conceded to let the train pass. He and his father were arrested and brought to the County Police in Motru to be seen immediately by the prosecutor. OEC requested their detention until they paid thousands of euros in damages caused by the delay. Father and son, however, having the deed of ownership for their land with them, were free before noon.
Civil disobedience

Ionuț’s protest is not an exception. Many of his neighbours have received land titles after the fall of communism, only to discover that their new properties are in the mine’s perimeter. Regular news stories of locals stopping the coal transport belts are a sign of the land owners’ frustration over failed negotiations with OEC. Their form of protest has even been introduced into the criminal code, threatening protesters with imprisonment in addition to a fine.

Back in 2012, Vasile Brădescu, then only 75 years young, was getting tired of the never-ending court battles to receive the land the communists took from his father. Just as in the case of Ionuț Purdescu, he only had a useless document indicating his property. The land, however, was now part of the mine. In a similar act of protest, he fenced off the part of his property that is crossed by the road and the railway and did not allow anyone to pass. OEC requested an urgent court decision to remove his construction, claiming that his improvised chain-link fence is a threat to Romania’s energy security. The judge allowed the company to remove the fence after five days and fined Vasile for building without a permit.

Even today, at almost 79 years old, Vasile regularly goes to court trying to regain his property.

Jilț North used up all of its coal, but there is still some left at the edge of the mine. Unfortunately for OEC, it lies under forests, meadows, orchards, houses, a school, two shops, and two historical monuments.

Right before Christmas 2015, 134 families received a notification asking them to come to the Energy Complex with ownership documents and a bank account number. They were invited in order to “establish a just compensation” for their land.

OEC had failed for years to find an agreement with land owners. Instead it negotiated with the Romanian government, which declared in Decision 960/2015 the land west of the mine to be of “public utility and national interest”. The government cleared the way for OEC to expropriate hundreds of hectares of private land and further determined the compensation for land owners at an average of one euro per square meter - even in cases where people still live on that land.

Compensation for what is on the land – be it houses, forests, or agricultural plantations – is not granted. Families could be kicked out of their homes and receive pennies for everything they own.

The families were also informed that they would have to vacate the land within 30 days – regardless of the result of the meeting for “establishing a just compensation”. Many didn’t go, refusing to believe that they would be evicted.

“The law says that if they want to expropriate, they have to come with an expert to evaluate my property. Nobody came, so how did they decide on one euro per square meter?” said Vasile Fotău, owner of a plot of land in the immediate vicinity of the mine.

Breach of constitutional law

Romania’s constitution determines that for projects of public interest the state has to provide compensations that “shall be agreed upon with the owner […] for damages to the soil, plantations or buildings”. By failing to negotiate with land owners and arbitrarily deciding on a very low compensation, the government’s and OEC’s actions are in breach of the constitution.

Other legal shortcomings include the lack of public consultations, a breach of the environmental permit for the expansion and the lack of landscape and urban planning permits. The decision further ignored the 2020 National Energy Strategy’s sustainable development goals and grants state aid to a commercial company in breach of European regulations, as the funds for the compensations come from the state budget. The general picture becomes absurd: the tax money collected from the locals is used to abusively expropriate them.

There are two ways the decision could still be stopped: it is annulled in court or revoked by the government. Given the government’s substantial failings outlined above, the first one seems possible, but lawsuits in Romania take years and the decision would not be suspended while the trial is on-going. By the time the court would give its final sentence, the coal under the village will have already burned.

Bankwatch and Greenpeace Romania, therefore, joined the people of Runcurel in requesting the government to revoke Decision 960. On January 29, a petition was launched against the abusive expropriations. On 24 March 2016, the two organisations are suing the Romanian government for ignoring the state’s laws and constitution.

While investors across the world are running away from coal for both economic and environmental reasons, Romania wants to reverse the trend and finances new investments. In this case, it could mean the disappearance of a village.

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