MAC: Mines and Communities

Coal: globally, pressures mount

Published by MAC on 2016-08-03
Source: Reuters, Guardian, Coal Wire, Mining.com, TASS (2016-07-27)

We have said it before, but it seems that - despite a small price rally - the game really is up for coal (see: "Coal is dead in the ground!")

Banks continue to roll back on coal funding, with Deutsche Bank becoming the latest of the major global lenders to turn its back on the black stuffl. Crédit Agricole and Société Générale are under public pressure for supporting a power plant in Indonesia.

China continues to clamp down on coal-related pollution, with tougher punishments for pollutinf firms; apparently it also intends to extend the ban on new coal plant construction nationwide, at least until 2018.

The deletrious impacts of coal have also mobilised civil society groups in India, Burma and Thailand.

A United States  federal judge has ruled against a permit for mining in Alaska while the repercussions of large-scale coal company bankruptcies continue to work their way through the system. A recent report has highlighted how expensive lobbying helped five of these US companies.

At the global level, the World Coal Association is - like many of its members - running at a loss. Campaigners have also been asking why the Colombian Mining Association has chosen to join the London-based organisation.

Germany has been criticised for providing subsidies to electric companies to maintain a constant supply of coal. in both Sweden and Germany there's been criticism of government backing for the sale of Vattenfall's coal assets to a Czech firm - rather than closing the plants down. The Netherands is looking to test controversial carbon capture and storage (CCS) technology off the coast of Rotterdam. And Poland's state controlled coal miners will finance a fund to promote the Polish coal industry abroad, despite the environmental damage it continues to do at home. 

Investment

Deutsche Bank ditches coal investments

Cecilia Jamasmie

http://www.mining.com/deutsche-bank-ditches-coal-investments/

8 July 2016

German banking giant Deutsche Bank became the latest of the major global lenders to turn its back to coal, amid a weak market and increasing pressure from environmentalists.

The decision became public last week, when all of the six members of its mining and metals investment banking team, including managing director and well-known coal banker Dan Chu, joined Jefferies Group.

The team, which was one of the most active mergers and acquisitions advisers in the mining sector last year, are now part of Jefferies’s global metals and mining group, Bloomberg reported.

It is understood that the German bank has no immediate plans to replace the six bankers, who helped it climb last year to first place among global lenders with a market share of metals and mining revenue in the Americas. Before the team joined in 2011, Deutsche Bank held the sixth place, The New York Times reported.

The bank had already said in March it would no longer finance so-called mountaintop removal projects, a method that involves mining coal from the surface, often leaving large gashes at the peaks. But it still stopped short of committing to a broad retreat like other large banks, such as Goldman Sachs, had.


Deutsche Bank Pulls Back from Deals in Coal Mining Sector

By Michael Corkery and Clifford Krauss

http://www.nytimes.com/2016/07/08/business/dealbook/deutsche-bank-pulls-back-from-deals-in-coal-mining-sector.html?_r=1

7 July 2016

Pressured by environmentalists and worried about big losses from a troubled industry, many large banks and other lenders have made a hasty retreat from coal mining in recent years.

But even in these dark times, there was one bank that many coal miners could still count on for financing and advice: Deutsche Bank.

Not any longer.

The German banking giant is pulling back from the embattled coal sector, another sign of the increasing risks for banks that finance industries that contribute to climate change.

Last week, six senior members of Deutsche Bank’s metals and mining investment banking team, which was responsible for overseeing deals in the coal industry, said they were decamping for Jefferies, a smaller, scrappy New York investment bank that has a knack for scooping up investment bankers who increasingly feel out of place at larger, more heavily scrutinized global banks.

A Deutsche Bank spokeswoman declined to comment on the bankers’ exodus. But industry analysts said the move was partly related to Deutsche Bank’s decision to back away from working on certain coal projects.

Deutsche Bank has no immediate plans to replace the six bankers, who helped the German bank secure the largest market share of metals and mining revenue in the Americas among banks last year. That ranking was up from sixth place in 2011, when many of them joined Deutsche from the Swiss banking rival UBS.

Dan Chu, a prominent coal banker at Deutsche Bank, will be global head of metals and mining investment banking at Jefferies.

“The large banks are under significant pressure from environmental groups to limit their activity in fossil fuels and mining across the board,” said Ted O’Brien, chief executive of Doyle Trading Consultants, which focuses on the coal sector. “This move might reflect an investment banking team that was no longer that important to a large bank and that will now be able to practice their niche under somewhat less scrutiny.”

Once a precious and sought-after resource, coal has fallen on hard times. Earlier this year, environmental groups like the Rainforest Action Network faulted Deutsche Bank for not going far enough in shunning coal.

Other large banks, including JPMorgan Chase and Bank of America, revised their policies to reflect a broader pullback from coal mining. Deutsche Bank had said that it would no longer finance so-called mountaintop removal projects, which involve extracting coal from the surface of mountains, often leaving large gashes in the landscape. But its public policy stopped short of the commitment to a broad retreat that many of the other large banks had made.

Banks are leaving coal for economic reasons, too. Just a few years ago, coal was surging, swept up in a global commodity craze, as mining companies sought to satisfy a seemingly insatiable demand from China.

As recently as 2011, the top 10 investment banks in the sector took in more than $1.6 billion in investment banking revenue from metals and mining deals globally, including coal deals. By 2015, that total had fallen to just $820 million, according to Dealogic.

The American coal industry, in particular, is now suffering a plague of bankruptcies. Power utilities are increasingly turning to cheap natural gas and renewable energy sources such as solar and wind to replace coal. Demand for coal from China has also cooled as its economy slows and the Chinese government tries to shift to cleaner energy sources.

In the first three months of the year, American coal production plummeted to the lowest levels in 35 years, in large part because the winter was so warm. And the spring brought no respite. May’s production of 50 million tons represented a 28 percent decline from May 2015, according to the Energy Department.

In recent days, Murray Energy, a coal giant based in Ohio, sent notices to its employees that said it could be forced to lay off 80 percent of its work force, or roughly 4,400 employees, across six states because of the widespread depression in the industry.

On Thursday, Alpha Natural Resources — which acquired the former Massey Energy in 2011 — received a judge’s approval to exit bankruptcy. As part of a deal in the bankruptcy with the Sierra Club and other environmental groups in West Virginia, Alpha agreed to give 53 million tons of its coal to a nonprofit group for the purpose of its never being mined or burned — a sign of just how little value this commodity holds at the moment.

As the coal industry undergoes what many analysts and investors expect to be a permanent downsizing, environmental groups have faulted Deutsche Bank for helping to sustain some life in the sector.

In recent years, Deutsche has assisted one of mining’s few durable operators, Blackhawk Mining, based in Lexington, Ky., which has been snapping up some of the best mines of bankrupt or nearly bankrupt companies such as Patriot Coal and Arch Coal.

Blackhawk declined to comment.

In more recent months, Deutsche Bank, which prides itself on being one of the top financiers of renewable energy projects in Europe, has taken a tougher stance against coal.

At the annual general meeting in May, Deutsche Bank executives said the bank would not expand its activities in the coal sector, adding to an earlier pledge to “phase out” debt and equity underwriting to companies that engage in mountaintop removal.

“Deutsche Bank supports a well-balanced overall energy mix that takes account of economic conditions as well as environmental and health and safety considerations,” a Deutsche Bank spokesman said in a statement.

Such considerations can go against the very grain of investment bankers, who are conditioned to work on as many deals as possible, not to cap activity.


Coal: Will the Paris Agreement go up in smoke thanks to Crédit Agricole and Société Générale?

Friends of the Earth France press release

27 July 2016

Paris - Crédit Agricole and Société Générale are set to decide this summer whether to finance the extension of the Tanjung Jati B coal power plant in Indonesia, seven months after COP21. [1] Friends of the Earth France, BankTrack and Greenpeace are calling on the banks not to make this mistake, and to instead withdraw from the project as BNP Paribas has already done. With an action in front of the Eiffel Tower today, Friends of the Earth France has sent a reminder to the banks that with this specific project their COP21 commitments for the climate are at stake. [2]

Activists from Friends of the Earth France have carried out a banner drop from the first floor of the Eiffel Tower today to denounce the involvement of Crédit Agricole and Société Générale in the 2000 MW extension project (TJB2) of the Tanjung Jati B coal power plant on the island of Java in Indonesia.

The two French banks are currently analysing this project and could finance it despite its incompatibility with the international objective of limiting global warming to well below 2°C, and ideally no more than 1.5°C, adopted in Paris by the international community only a few months ago. [3] BNP Paribas has already withdrawn from the project, putting pressure on its two peers, whose final decision could have serious consequences for the climate but also for their reputation.

Lucie Pinson, Private Finance campaigner for Friends of the Earth France, said:

“Where are their COP21 commitments? Already up in smoke? Instead of using the money entrusted to them locally, as Crédit Agricole claims to do in its recent ads, the bank will now have to explain to its clients that it is continuing to finance new coal, even after committing to do everything possible to ensure the aims of the Paris Agreement are met or even exceeded. [4] The same goes for Société Générale, which has committed to align its financing with the 2°C scenario. [5] Any decision to finance TJB2 would be a shameful hypocrisy.”

This project is part of a bigger – and highly carbon intensive – national energy development plan to develop 13 gigawatts of new coal capacity for Indonesia by 2019, mostly on the densely populated and heavily polluted island of Java. But the banks know as well as NGOs the reports showing that the construction of new coal plants – or even the replacement of old ones – is not possible within the available carbon budget, even using the best available technology, and that a commitment to close the existing coal fleet is now necessary to stay below the 2°C threshold. [6]

Yann Louvel, Climate and Energy Campaign Coordinator at BankTrack, commented:

“Tanjung Jati B 2 is a key test for the climate and for the banks which made commitments themselves at COP21. As World Bank President Jim Yong Kim reminded us recently, if Indonesia and the other South-East Asia countries build coal plants as planned, we are finished and this will spell disaster for us and our planet. It is therefore vital that these projects never see the light of day, and that's why NGOs are tracking investors so closely in this region of the world.”

Bondan Andriyanu, from Greenpeace Indonesia, and who recently met with the two banks in May 2016, concluded:

“Financing TJB2 is to choose pollution, many deaths, and deforestation. As with many other Asian countries, we are already suffocating because of coal. Already 6,500 people die prematurely from coal every year and TJB2 could add 1,000 more. Not only will populations without access to electricity not benefit from TJB2, nor from other coal plants projects, but the expansion of coal mining concessions to meet the planned doubling of coal consumption will worsen deforestation in our country. Alternatives exist in Indonesia, and the country’s enormous renewables potential could be developed more cost-effectively than coal. Crédit Agricole and Société Générale committed to take into account all these factors. We are now expecting them to follow the example of BNP Paribas and to withdraw from the project”.

With today's action at the Eiffel Tower, the symbol of COP21, Friends of the Earth France has sent a reminder to the banks that their reputation is at stake and that the sincerity of their climate commitment and to the energy transition will be judged on the decision they take in the TJB2 case.

Friends of the Earth Japan is also today sending a letter to Nexi, one of the other financial institutions involved, demanding its withdrawal.

Notes for editors:

1. Project financing is expected to close this summer, after receipt of all the preliminary studies required by funders. The other banks involved in the $4 billion project are BTMU, Mizuho Bank, SMBC and Sumitomo Trust.

2. For more details about the action and for photos, contact Lucie Pinson on +33 679 543 715

3. See the briefing published in May by Friends of the Earth France and Greenpeace: "Indonesia: the climate test for Crédit Agricole and Société Générale" (in French only).

4. After some commitments regarding its support for coal mines and coal plants in May and September 2015, Crédit Agricole signed the Paris Pledge for Action.

5. See the summary of Société Générale's commitments before COP21.

6. The report "The Coal Gap: planned coal-fired power plants inconsistent with 2˚C and threaten achievement of INDCs", published in December 2015 by Climate Action Tracker, shows that even without new construction, emissions generated by electricity production from coal in 2030 would still be 150% above the necessary level to limit global warming to within the 2°C threshold.

Another report published earlier this year by Greenpeace, Sierra Club and CoalSwarm has shown that despite the fact that more and more coal plants are being closed, the speed of the closures is not fast enough to compensate for the opening of new plants:

The most recent report from Ecofys shows that even the use of the best available technologies for coal plants does not make coal compatible with the objectives adopted at COP21.
For further inquiries and interview requests, contact:

Lucie Pinson, Private finance campaigner, Friends of the Earth France
Tel: +33 6 79 54 37 15
Email: lucie.pinson[at]amisdelaterre.org


 Asia

China top polluter Hebei province promises to clean up act

Reuters

6 July 2016
 
Northern China's Hebei, home to seven of the country's 10 smoggiest cities, has pledged to double up its efforts to tackle hazardous pollution following an environment ministry report accusing the province of failing to rein in law-breaking industries.

Hebei, which surrounds the capital Beijing and is responsible for about a quarter of China's total steel output, is one of the front lines in a "war on pollution" designed to head off growing public disquiet about the environmental impact of three decades of untrammelled industrial growth.

In May, the Ministry of Environmental Protection (MEP) said steelmakers and coal-fired power generators in Hebei were violating state guidelines by continuing to expand, while some local firms were also involved in "fraudulent practices" aimed at circumventing pollution rules.

The ministry identified a total of 47 problems during a two month inspection tour of the province beginning at the end of last year, and said the environment in some districts of Hebei had continued to deteriorate.

In a detailed response published on its official website (www.hebei.gov.cn), the Hebei government said late on Tuesday that it would work to "put environmental protection in a more prominent position" and set up an implementation team to rectify the problems highlighted in the MEP report.

It promised to dismiss and punish local government officials responsible for illegal steel production and step up efforts to replace the consumption of coal with cleaner natural gas.

The province promised in 2014 to cut coal consumption by 40 million tonnes and shed as much as 60 million tonnes of steelmaking capacity by 2017.

It also aims to cut concentrations of small airborne particles known as PM2.5 to an average of around 67 micrograms per cubic meter over the period, down from 77 micrograms in 2015.

According to official 2015 data, seven of China's 10 smoggiest cities were located in Hebei, the same as 2014 despite an economic downturn and a campaign to cut industrial capacity.


Chinese polluters to face more business, financing restrictions

Reporting by David Stanway

Reuters

28 July 2016

Chinese firms guilty of exceeding emissions limits or building plants without environmental permits will face tougher punishments including credit bans and land use restrictions, the country's environmental ministry said late on Wednesday.

China has been cracking down on polluting enterprises, raising fines and threatening criminal action against persistent offenders, but regulators have long struggled to impose rules on powerful industrial enterprises and local governments anxious to protect revenue and jobs.

The country has sought to beef up its traditionally underpowered environment ministry and spread the burden of enforcement to other agencies, including dedicated courts, police authorities and financial regulators.

The Ministry of Environmental Protection said in a notice published on its website that it has signed a cooperation agreement with 30 government departments, including the central bank, to broaden the range of punishments for offenders as well as improve information sharing.

The 31 government departments will draw up a blacklist of offenders in order to create a "unified punishment mechanism", the ministry's official publication, China Environmental News, said.

Businesses or individuals that have seriously violated environmental rules would not be able to apply for new land, safety or business permits, and would not be able to get their products certified by customs.

Preferential tax policies could be canceled, and firms would also face restrictions when issuing bonds or making use of other financing tools. Some could also be restricted or banned from entering the market.

Earlier this month, the China Securities Regulatory Commission said that it would only allow companies that have a clean bill of environmental health for three full years to issue shares on local stock exchanges.

"Environmental enforcement needs to be enhanced, but if they can be assisted by other stakeholders and other powerful departments, especially investors, banks and stock market regulators, it can provide a big help," said Ma Jun, director of the Institute for Public and Environmental Affairs, which campaigns against pollution.

(Reporting by David Stanway; Editing by Michael Perry)


China Reportedly Poised to Ban New Coal Plants Through 2018

Thomas Overton

http://www.powermag.com/china-reportedly-poised-to-ban-new-coal-plants-through-2018/

12 July 2016

China is preparing to expand nationwide a ban on new coal plant construction announced in April in an attempt to further rein in overcapacity and boost utilization of renewable energy, according to a report in Australian Financial Review.

This spring, China’s National Development and Reform Commission and National Energy Administration suspended or slowed plans for more than 100 GW of coal-fired capacity across the country, affecting around 200 plants. The country’s electricity demand has slowed considerably as its economic growth has flattened. Chinese coal imports have plummeted over the same period, falling 30% in 2015.

Chinese-language news site Economic Information Daily, part of the official Xinhua news agency, reports that the forthcoming 13th Five-Year Plan, which will be released this year, will extend the ban on new coal plant construction nationwide at least through 2018.

China has been working in recent years to reduce reliance on coal and boost generation from nuclear and renewables. The nation has suffered from serious air pollution problems, most of which have been blamed on emissions from older coal plants.

At the same time, generation from wind has lagged badly. Despite leading the world in installed wind capacity, its total generation from wind in 2015 was behind the U.S., which has around half China’s capacity. Wind power in China is often curtailed because of transmission constraints and local authorities that favor generation from coal.

China has also committed to aggressive reductions in the carbon intensity of its economy as part of the Paris climate agreement. Because its targets are pegged to its gross domestic product, an economic slowdown means the nation must move more quickly to reduce the share of coal generation in the power mix.

The ban on coal plants may also give a boost to natural gas, which is pegged to reach 10% of the mix by 2020 in China’s climate targets.


Mining-affected Adivasis in Chhattisgarh have forced a coal firm and the state to hear them out

Concerns over employment, compensation and the environment led to an eight-day-long blockade, which was called off after the state acceded to most demands.

Abhinav Gupta

Scroll.in

20 July 2016

As night fell in the desolate landscape of Tamnar in Chhattisgarh’s Raigarh district last week, a group of people hunkered down. Rain plodded down in large, unforgiving drops, adding to the misery of miners and their supporters. The agitators prepared to sleep in shifts, and a small fire was lit. The silence was eerie compared to the bustle of the day.

This scene was repeated every night for a week.

A blockade starts

Braving incessant rains and a distant state, women from over half a dozen tribal villages in this area led an eight-day-long blockade of the Gare Palma IV/2 and IV/3 coal mines in Raigarh district, which ended on Monday with the state, and the interim custodian of the mines, South Eastern Coalfields Limited, acceding to most of their demands.

The primary demands of the people behind the blockade were employment and compensation as per India’s rehabilitation policy, and strict and full implementation of the Forest Rights Act and the Panchayats (Extension to Scheduled Areas) Act.

It was a significant victory. But warned by previous experience, the villagers indicate they will restart the agitation if the promises made to them are not kept.

The land in Tamnar is pockmarked by open cast and underground mines in every direction as far as the eye can see. Hardly any village in the area is unaffected by mining.

During the blockade, transportation of coal from the two Gare Palma mines located in the Fifth schedule area of Tamnar tehsil came to a complete standstill – thousands of coal-laden trucks were stranded for days. This resulted in losses amounting to several crores of rupees for South Eastern Coalfields.

The blockaded mines produce 6.9 million tonnes of coal a year. They have changed hands a number of times in the past few years. They were earlier allocated to Jindal Power Limited, but were deallocated in 2014 by the Supreme Court as part of a judgement that deallocated 204 coal blocks all over the country.

Jindal Power Limited then won the two blocks in a fresh auction in February, 2015. However, since the final closing bid price did not reflect the fair value of the mines, the government did not approve the declaration of the preferred bidder (Jindal Power Limited) as the successful bidder. The private firm has challenged this in court.

In this ongoing battle, South Eastern Coalfields Limited, an arm of Coal India Limited, was made interim custodian of the two mines.

People’s demands

The Forest Rights Act recognises that individuals have rights over the land that they have been historically dependent upon, and that the forest dwellers have rights over the use and management of those forests and the resources therein. The Panchayats (Extension to Scheduled Areas) Act extended panchayat rule to tribal areas, devolving powers to village-level gram sabhas, which play an important role in participatory democracy.

The agitating villagers allege that both these Acts have been severely violated in Tamnar. They say that forest land has been encroached upon for the construction of the mines even though forest rights have not been settled, and free and prior informed consent of the Gram Sabhas had not been taken.

In addition, they are concerned about environmental pollution, land degradation and a dramatic fall in the water table, saying that mining companies have continuously flouted environmental norms.

Rinchin, a land rights activist working in the region, said that air pollution levels according to the state-run Chhattisgarh Environment Conservation Board were high, but an independent test done by the villagers and an environmental group have found it to be alarmingly high. “The PM2.5 levels found in village Libra are almost 500 ppm [parts per million], which is 10 times the acceptable limit,” said Rinchin. “The ground water levels in nearby villages have also dropped sharply since the mines opened.”

A report by the Public Health Engineering Department documents that ground water levels in over 100 villages in Tamnar had fallen by upto 100 feet since the mines opened. In close to 40 villages, the water table has dropped by upto 150 feet. The report also indicates that the area has become water scarce, a fact that hasn’t escaped the notice of the local elected representatives.

Jindal Power blamed

The anger against Jindal Power Limited is especially palpable.

The villagers claim that Jindal acquired Adivasi land through illegal means and have demanded an investigation into the complete acquisition process. “The illegal way in which Jindal took our land needs to be investigated by a high level committee,” said Kanhai Patel of Kossampalli village.

Shivpal Bhagat, the sarpanch of Kosampalli, said that Jindal Power was largely to blame for the condition of the environment in the area. “The indiscriminate way in which Jindal mined this land flouting every environmental rule has left our condition vulnerable,” said Bhagat. “Any new owner also won’t be able to rectify it. They need to be held accountable”.

The locals also accuse Jindal Power of being behind the several false cases filed against protesting villagers.

Both Shivpal and Kanhai, and several other villagers, have been booked under the Indian Penal Code under sections related to rioting and wrongful restraint.

Rinchin echoed the thoughts of villagers when she said that they weren’t really afraid of cases being filed against them. “Jindal has filed so many false cases against them, a few more are not going to scare them away,” she said. “The villagers are demanding the quashing of all these false cases.”

How it started

The agitation started with people from around half a dozen villages blocking the Tamnar main road amid incessant rain on July 11.

The people of Saarasmaal, Libra, Kosampalli, Dongamoha, Kodkel and other neighbouring villages were the first to besiege the mines. Seeing the strength of the agitation, and recognising that they shared a common plight, villages not directly affected by these two mines also started pouring in. At the forefront of this second wave were those from villages affected by mines operated by Hindalco. They were later joined by villagers from Sakta, Milupara, Saraitola, Gare and Palma.

Asked about the possibility of new mines in the area, all villagers were unanimous in saying: “We will not let any new mines open up here, or let existing mines expand. We demand a complete moratorium on the same.”

Getting to the negotiating table

The villagers are aware that the confusing document and ownership trail will make resolving legal infractions difficult for them to navigate. “Now the custodian is SECL and then the owner will be someone else,” said Bhagwati Bhagat, also of Kossampalli village. “Who will pay for our losses? How will changing ownership ensure our rights?”

The possibility that the two mines might change hands again with the new owners overturning any promises made by South Eastern Coalfields forced the affected villagers to ask for a tripartite agreement between the mining company, the villages and the district administration to ensure that any promises made are binding on the new mine owners too.

But though officials of the mining company agreed to come to the negotiating table quite early on, the district administration was initially hesitant.

Niranjan Patel, the South Eastern Coalfields mines manager at Raigarh said on Saturday: “We have suffered losses to the tune of Rs 4 crore to Rs 5 crore. Our output has fallen from 18,000 tonnes to zero. We want to resolve this issue as soon as possible, but the district administration needs to get involved. At present, the matter is still stuck at the lower rungs of administration”.

Repeated calls to the Raigarh district collector, Alarmelmangai D, and to Tamnar tehsil’s sub divisional magistrate, Vineet Nandanwar, by this author failed to elicit a response.

A significant, but cautious victory

However, early on Monday, bowing to sustained pressure, on the orders of the district collector three people – Vineet Nandanwar, officer on special duty ML Soni, and mining manager Niranjan Patel – were ready to sign an agreement with the committee constituted by the agitating villagers.

The agreement accepted most of the villager’s demands.

The administration has promised to investigate the accusations of illegal land purchase by Jindal Power, including the cases of sale of tribal land to non-tribal people. It has also promised to look into allegations that the Forest Rights Act had been flouted. It has said that it will update the village committee with progress on the investigations every 15 days.

The state administration also assured the agitators that it would direct the Chhattisgarh Environment Conservation Board to investigate instances of environmental degradation and infringement of environmental clearance conditions by the mine’s operators, as has also been ordered by the National Green Tribunal in an ongoing case filed by these very villages.

Additionally, South Eastern Coalfields has accepted the demand that it provide employment to project-affected families and that it will not pursue any cases filed thus far against protestors.

Though a significant victory, a long history of broken promises has made the agitators apprehensive about the state’s willingness to follow up on its promises. But they say they are ready to get back on the ground with greater force if they find the mining company or the state administration going back on its promises.


Ash slurry pipeline leaks in Talcher

New Indian Express

11 July 2016

ANGUL: PANIC spread in Talcher on Sunday morning when ash slurry leaked out of the pipeline of Talcher Thermal Power Station (TTPS), a unit of NTPC, at Central Colony on Balanda road. Sources said the leakage startedat 6 am and continued till 8 am. It was stopped by TTPS officials who rushed to the spot after a road blockade was staged by locals. However, the cause of leakage is yet to be ascertained. The ash slurry has inundated large parts of the area and damaged a road side hotel. The locals alleged that the pipeline was damaged and failed to resist pressure.

Ten years ago, the officials had set up the 10-km pipeline from its 460 MW power plant to Jagannath Mine to dump its ash slurry into void coal mine. But no maintenance work has been undertaken, they alleged. Public Relations Officer (PRO) of TTPS Samarendra Mallick said as the pressure on the pipeline goes up during rainy season, it might have led to the leakage. The pipeline will be repaired soon. A meeting with local people who staged the road blockade over their demands will be held on Monday or Tuesday, he added.

Environmentalist Bauribandhu Bej expressed concern over repeated leakages in TTPS pipelines demanding high level inquiry into the incident by the State Government.


MATA calls for investigation into Shan State coal mine

By Chan Mya Htwe

Myanmar Times

18 July 2016

A civil society alliance has asked the Shan State government to investigate a coal mine in Namsan township, after farmers claimed their land was confiscated by force without explanation.

Myanmar Alliance for Transparency and Accountability has asked the state government whether the mine has been approved by the Ministry of Natural Resources and Environmental Conservation and, if so, who holds the permit.

Farmers say that 100 acres (40 hectares) of land was taken by the military last year, according to MATA spokesperson U Moe Lwin.

“The land was fenced off after the army seized it and expelled 12 farmers last year. The farmers asked for their land back. Instead, somebody dug a coal mine,” he said.

Workers say the mine operates with backhoes and trucks to produce nearly 100 tonnes of coal a day, he said.

He believes the mine may be operated by Kanbawza Group, a major conglomerate with national interests. If this is the case, its operations are illegal, he said. “The natural resources ministry has confirmed that it has not issued KBZ a permit to mine in that location.”

Kanbawza’s chief auditor U Nay Myo Aung told The Myanmar Times that the group is not mining coal in Namsan. He said the company operates a licensed coal-powered cement factory nearby, and sources the fuel from three local mines, including one near Mee Thaway Gone village in the Won Pone village tract.

He said coal is sold to Kanbawza Group by one Major Chit Ko. When questioned, Major Chit Ko confirmed he was using machinery to mine coal and said he was acting under army orders.

U Nyi Nyi Aung, Shan State minister for the Ministry of Natural Resources and Environmental Conservation, said he had sent a letter to the Department of Mines in Taunggyi, after receiving MATA’s request to investigate the issue. He said he has asked the Taunggyi department to send photographs of the area, but has not yet received a response.


Thailand: Women Human Rights Defenders and Villagers Oppose Coal Mining and Demand Climate Justice

http://apwld.org/statement-women-human-rights-defenders-and-villagers-oppose-coal-mining-and-demand-climate-justice/ 

17 June 2016

Solidarity Statement

This statement originates from the solidarity activity held at Ban Haeng, Lampang on June 9, 2016 organized by Asia Pacific Forum on Women, Law and Development (APWLD), Protection International (PI) and Asia Indigenous Peoples Pact (AIPP) which was attended by more than 100 villagers, the community-based Rak Ban Heng organisation and human rights defenders from nine (9) countries[1].

WE, the undersigned members of Asia Pacific civil society, representing different constituencies, movements and organisations, express our solidarity with the Ban Haeng community opposing the coal mine in Tambon Ban Haeng, Ngao District, Lampang and condemn the threats and harassment committed against the villagers and community organisers in the area.

Since 2010, the community members of Ban Haeng have been vocal in their opposition to the proposed coal mining project in their area. In the absence of due process and genuine community consultation, the people living and farming the area have organized into the Rak Ban Heng Conservation Group. The group aims to ensure the conservation of the forests, natural resources, the environment, community and traditional culture and values. The community is steadfast in opposing the lignite mining because of the destructive nature of the project which is expected to have a huge impact on the health and livelihood of the community.

Despite community resistance, a mining concession was granted to Green Yellow Co. Ltd. in August 2015 by the Ministry of Industry. On October 22, 2015, 386 villagers filed a complaint at the Chiang Mai Administrative Court, requesting the court to revoke the concession permit and to issue a temporary injunction against mining operations in the village. As the exploratory concession expires in August 2016, the tensions between the corporation and the State on the one hand and the community on the other continue to rise.

Various forms of intimidation, including close physical surveillance by unidentified men, harassment from military officers, threats of death and enforced disappearance have been made to Women Human Rights Defenders (WHRDs). Among the WHRDs who have experienced harassment is Waewrin Buangern who has pending criminal complaints against her but to date has not received sufficient assistance from the Thai Justice Fund[2] to pay for bail and legal fees.

This pattern of harassing environmental and women human rights defenders is not unique to Ban Haeng. In 2014, Southeast Asia was considered among the riskiest places to be a human rights activist, with 21 recorded killings in Thailand alone.[3] Last week, on World Environmental Day, three United Nations Special Rapporteurs highlighted the alarming trend of targeting environmental human rights defenders “as if they were enemies of the State”[4]. They urged states to meet their obligations to protect environmental rights, defenders and members of marginalized and vulnerable communities.[5]

The struggle in Ban Haeng contributes to global campaigns for climate justice, energy democracy and Development Justice. The solidarity activity held in Ban Haeng amplifies the call for a feminist fossil fuel free future – a future that empowers women; a future that paves the way for redistribution of power from the elite to the many; and a future that is free from dirty energies and dirty, exploitative economies.

Lignite is the dirtiest of all fossil fuels. It creates dirty, dangerous environments locally and emits high levels of carbon emissions. If we are to restrict global warming to 1.5 degrees above preindustrial levels (the target set in the Paris Agreement), 80% of fossil fuel reserves must stay underground[6]. As a result, no new fossil fuel power plants should be allowed while decentralised, locally-owned, clean and renewable energy projects should be promoted.

The event in Ban Haeng is part of the Women’s Global Call for Climate Justice[7] where women from every region in the world are demanding climate justice now!

In solidarity with the women leaders and the villagers of Ban Haeng, we support the call of the villagers and community-based organizations to live in peace in the land they have lived in for generations and to craft their own development agenda. The people of Ban Haeng should not be deprived of their right to their lands in order to accommodate a project which has negative impacts on their livelihood and the environment.

We join the people of Ban Haeng in their efforts to protect the community’s livelihoods, local environment, and community rights to participation in public affairs. We stand with the villagers in denouncing a development agenda that is beneficial only to the elite and causes irreversible damage on the environment. We call on the Thai Government and local authorities to revoke the concession permit granted to Green Yellow Co. Ltd., to withdraw all charges against community leaders and to work with the community to achieve Development Justice.

[1] Bangladesh, Burma, India, Indonesia, Laos, Nepal, Philippines, Taiwan and Thailand.

[2] The Justice Fund is a public fund used to provide legal aid and bail funds to low income defendants. It is a critical tool in advancing access to justice in Thailand but must be available to all defendants. http://thailand.prd.go.th/ewt_news.php?nid=1707&filename=index

[3] Damian Carington, Berta Cáceres one of hundreds of land protesters murdered in last decade, The Guardian, Mar. 4, 2016, available at http://www.theguardian.com/environment/2016/mar/04/berta-caceres-environmental-activists-murdered-global

[4] United Nations Human Rights, “A deadly undertaking” – UN experts urge all Governments to protect environmental rights defenders, Jun. 2, 2016 available at http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=20052&LangID=E#sthash.ScrBiOOh.dpuf

[5] Ibid.

[6] http://www.yesmagazine.org/issues/life-after-oil/why-we-need-to-keep-80-percent-of-fossil-fuels-in-the-ground-20160215

[7] See The Call available at http://womenclimatejustice.org/the-call-english-2/


USA

Federal judge rules against Wishbone Hill mine prospect

Alex DeMarban

http://www.adn.com/business-economy/energy/2016/07/08/federal-judge-rules-against-wishbone-hill-mine-prospect/

8 July 2016

A federal judge has dealt a blow to an Alaska mining operator hoping to extract coal from the Wishbone Hill prospect near Palmer, ordering a federal agency to revisit a 2014 decision that allowed Usibelli to hold onto its 25-year-old permit though development had not occurred in a timely manner.

State officials said the next step is an administrative process by the Office of Surface Mining and Reclamation and Enforcement that could determine the validity of the permit. Conservation groups involved in the lawsuit said the next logical step will be a cessation order stopping the project because the company has no valid permit.

"The Office of Surface Mining will have to issue a cessation unless the state finds new evidence that mining happened within the proper time frame," said Katie Strong, staff attorney at Trustees for Alaska, which represented conservation groups in the case. "But the state and Usibelli said no mining started until June 2010, so there aren't circumstances here that will cause the permits to still be valid."

The project, located about 8 miles from Palmer and 5 miles from Sutton, was initially permitted in 1991. Two other mining companies held the original permits before they were transferred to Usibelli in 1997.

Usibelli, longtime operator of a coal mine near Healy, built a road to the Wishbone Hill mine site in 2010.

U.S. District Court Judge Sharon Gleason ruled Thursday that federal law is clear. Mining operations should have begun within three years after the permit was issued, unless the permit was extended, she said The permit has not been extended since 1996.

State officials said they are reviewing the decision and considering the next options.

Cori Mills, an assistant attorney general, said Gleason did not invalidate the permit, but decided how federal law should be interpreted and sent the case back to U.S. Office of Surface Mining for a determination.

"The decision was not, in itself, a ruling on the validity of the Wishbone Hill permits," Mills said in an emailed statement. "Instead the Court has remanded the matter to the federal agency for further proceedings where that question and others may be resolved. We are continuing to review the decision and appropriate next steps."

The Chickaloon tribal government and Castle Mountain Coalition, a conservation group for the Matanuska River watershed, were the lead plaintiffs in the case, brought in March 2015 against the federal agency.

The groups were joined by other plaintiffs — Cook Inletkeeper, Alaska Center for the Environment, Alaska Community Action on Toxics and the Sierra Club. The state and Usibelli joined the federal agency as intervening defendants.

Usibelli is considering its legal options, said Lorali Simon, vice president of external affairs for Usibelli.

"The state and federal government have both told us we have a valid permit, so to be in this position now, where we have operated under what we assumed to be a valid permit since 1997, it certainly is a blow to us," Simon said.

Residents in a Palmer neighborhood who had feared mining activity would pollute their air with coal dust, lower property values and increase noise and traffic are pleased with the decision, said Kirby Spangler, president of Castle Mountain Coalition.

Spangler, who lives about a mile from the proposed mining area, said the decision will help stop a project already suffering from the worldwide drop in coal demand.

"We were claiming victory before but this is a few more nails in the coffin for Wishbone Hill," he said.

The state, which has had jurisdiction over its coal program since 1983, adopted statutes no less stringent than federal law, said Russell Kirkham, head of the state's coal program.

The state had regularly renewed the permits, and considered a renewal to be an "implicit extension," he said.

"The judge said we were incorrect on that, so we're still trying to figure out our next steps," he said.

Strong, the attorney at Trustees for Alaska, said Congress created the three-year termination provision to prevent coal operators from holding leases without developing them, and to make sure standards to protect the environment and communities were up to date.

Though the judge's ruling is only binding in Alaska, it could have nationwide implications, she said.

"As coal mining prices drop around the world, we're seeing more mines get permits and not develop because the projects aren't supported by the market," Strong said. "So this means those mining companies can't get their permits to sit on them for years or decades."


Coal ash bill rewritten to avoid veto

Compromise bill gives McCrory administration control of coal ash regulation

Well owners near ash basins would be connected to permanent drinking water supplies

By Craig Jarvis

http://www.charlotteobserver.com/news/politics-government/article86406107.html

28 June 2016

State legislators are moving a late-in-session coal ash bill rewritten to address the concerns Gov. Pat McCrory had when he vetoed a previous version earlier this month.

The proposal is a surrender by the General Assembly on its insistence of having an independent commission monitoring the McCrory administration’s regulation of coal ash cleanup in basins across the state. It would do away with the Coal Ash Management Commission, which the state Supreme Court ruled was an overreach by the legislature into the executive branch because the governor didn’t control it.

The bill would allow Duke Energy more time to clean up its sites if it upgrades its basin dams and provides permanent drinking water connections for neighbors of coal-fired power plants. State environmental regulators would assess the progress the utility makes within 18 months.

The bill is expected to come up in the Senate Rules Committee on Tuesday afternoon. The legislature is moving quickly toward the end of session, now that a budget compromise has been struck, expected later this week or next. It would do away with the Coal Ash Management Commission

Although the legislature has enough votes to override the veto, legislative leaders decided to work with the governor to avoid a prolonged court battle, and to get clean water to hundreds of well-owners who live near Duke Energy plants. They have been living on bottled water that Duke has voluntarily provided for more than a year, although the company notes there is no definitive link between elevated levels of vanadium and hexavalent chromium, which occur naturally and in coal ash.

Environmental groups were quick to criticize the compromise.

“The North Carolina Senate has once again failed to protect the people they claim to represent,: said Dan Crawford of the N.C. League of Conservation Voters. “Instead, the anti-clean water N.C. Senate has brokered yet another sweetheart deal for Duke Energy. Right now, families in North Carolina can’t drink their own well water. But decision-makers in Raleigh would allow a monopoly with over $23 billion in revenue to go two whole years without providing those families clean water. When we say these politicians put polluters over people, the N.C. Senate’s coal ash bill is exactly what we’re talking about.”


These five coal miners spent $95 million on lobbying before going bankrupt

Cecilia Jamasmie

http://www.mining.com/five-coal-miners-shed-95-million-lobbying-going-bankrupt/

28 June 2016

Five US coal miners that recently went bankrupt spent $95 million lobbying with lawmakers and over half a billion dollars on salaries for their top executives in the decade before facing financial collapse, a report released Tuesday shows.

"Coal miners “excessive” spending shows the leases helped lobbyists and executives, not the public, claims report."

According to environmental group Western Values Project, the companies — Walter Energy, Patriot Coal, Alpha Natural Resources, Arch Coal and Peabody Energy (the world's largest privately owned coal producer) — incurred in “excessive spending and reckless business investments.”

The group adds that not even tax subsidies and other incentives provided by the US government were able to save them from going down because of their spending decisions.

The document, released ahead of a Tuesday public meeting in Pittsburgh on the future of the federal coal-leasing program, claims such scheme — which leases land for coal production at a discount — has only benefitted lobbyists and executives, not the public.

The group wants the Obama administration to review the program and increase costs to better match the value of coal extracted from private land.

These five coal miners shed $95 million on lobbying before going bankrupt

Currently, coal mined from private property is more expensive than the one extracted from public lands. A White House’s analysis released earlier this month shows producers only paid the US government an average of $1.70 per ton (or 4.9% of coal market value) from 2008 to 2012. Thermal coal is presently trading around $40 per tonne.

Coal miners in the US have been hard hit by power plants substituting the fossil fuel with natural gas. The country’s coal production fell to 900 million short tons in 2015, according to data released in March by the US Energy Information Administration, a 10% decline on the previous year.

And for this year, the EIA is predicting that natural gas will overtake 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, the EIA said.


Russia

Russia increasingly reorients coal exports eastwards — energy minister

TASS - http://tass.ru/en/economy/885048

28 June 2016

Coal is the fifth basic export product of Russia, the minister says

ST.PETERSBURG - Russia is more and more reorienting its coal exports to the east, Energy Minister Alexander Novak said at the International Congress of coal enrichment.

Novak said that creation of new centers of coal production, mainly in the east, with the complexes for coal processing is among the priority areas for development of coal processing in Russia.

"Coal is the fifth basic export product of Russia after oil, oil products, gas and iron. It annually provides about $10 billion of foreign exchange earnings to the country. As I have already said, coal export volume Russia ranks third in the world, the Russian coal is consumed in 64 countries," the minister said.

The share of coal in the global energy balance will be reduced to about 25% in the long term perspective from the current 29%, Novak said, adding that coal production in Russia will grow to 390 mln tonnes in 2016.

"Coal continues to play a crucial role in the global economy. In the structure of the global consumption of fuel and energy resources, the share of coal is 29%. It is second only to oil, which accounts for 33%. In the future, the share of coal in the global energy balance will shrink to about 25%," Novak said.


Europe

Sweden sells its German coal mines

Sale to Czech investors angers environmentalists who wanted the mines shut down

Andrew Topf

http://www.mining.com/sweden-sells-german-coal-mines/

3 July 2016

The Swedish government has endorsed a plan by a state-owned enterprise to sell its four German coal mines and assets to Czech investors.

Under the plan announced on Saturday, Vattenfall AB's lignite operations located in the Lausitz region of eastern Germany will be sold to Czech energy company EPH and its financial partner PPF. The mines had to be written down and selling them was better than operating them at a loss, according to Enterprise and Innovation Minister Mikael Damberg:

"The deal is of strategic importance for the company and that it is financially best option,” said Damberg. “The value of selling is higher than to keep and continue operating the business.”

According to Associated Press, Vattenfall operates around 17 large coal-fired plants located in Germany, Denmark and the Netherlands, with an aggregate capacity of about 12 GW. The buyer, EPH, is a leading Central European energy group, including over 50 companies in the Czech Republic, Slovakia, Germany, Italy, the UK, Poland and Hungary. It operates the biggest pipeline in the EU, is the biggest gas distributor in Slovakia and is the second largest Czech electricity producer.

"The value of selling is higher than to keep and continue operating the business"

Vattenfall's coal plants seem at cross-purposes with Germany's plan to shift to 60 percent renewable energy by 2050, the so-called "Energiewende". However Germany has been forced to expand its coal operations in recent years due to its aggressive moves away from nuclear power. After the 2011 Fukushima disaster in Japan, the country gave itself a little over 10 years to close down all its nuclear plants, but with clean energy providing just a quarter of its power demand, the country's policymakers had to rely on coal to fulfill the energy demand formerly filled by nuclear.

Expansions of lignite plants across Germany, Poland and the Czech republic have sparked angry protests from local residents due to the potential for increased pollution and the razing of medieval villages. However others support the lignite, or brown coal industry, for the jobs it creates, an estimated 25,000 positions in Lausitz alone.

Saturday's decision by the Swedish government to allow the plants to continue operating caused consternation among Germany's powerful environmental lobby. AP quotes Jan Kowalzig, a climate change adviser at Oxfam Germany, as saying the government “is spurning the landmark treaty on climate change adopted last year in Paris,” and that the sale is “a failed attempt to clean up Vattenfall’s dirty environmental record.”

“It fosters the continued digging up and burning of dirty coal in the region,” he said in a statement.


Sweden backs sale of German coal mines to Czech group

Sweden's Social Democratic government says it is supporting the sale of state-owned Vattenfall AB's four coal mines, considered a major source of greenhouse gases, and its mining assets in Germany to Czech investors.

An M. Olsen

Associated Press

2 July 2016

COPENHAGEN, Denmark (AP) — Sweden's Social Democratic government said Saturday it is endorsing the sale of state-owned Vattenfall AB's four coal mines and mining assets in Germany to Czech investors, sparking harsh reactions from environmentalists.

"The deal is of strategic importance for the company and that it is financially best option," Enterprise and Innovation Minister Mikael Damberg said. "The value of selling is higher than to keep and continue operating the business."

He didn't disclose details about the price.

Climate minister Isabella Lovin of Sweden's Environment Party told a joint news conference the government "had thoroughly investigated the deal but didn't find any formal reasons to reject it."

In April, Czech energy company Energeticky a prumyslovy holding, or EPH, signed an agreement to acquire the Swedish state-owned utility's loss-making assets in Germany. EPH made the bid together with PPF Investments, a private equity group.

The Swedish company seeks to shift its energy strategy. Vattenfall had made large write-downs on its operations in Germany.

Environmentalists have called on Sweden's government to stop the sale and dismantle the coal assets to prevent climate-warming CO2 emissions.

Jan Kowalzig, a climate change adviser at Oxfam Germany, said the Swedish government "is spurning the landmark treaty on climate change adopted last year in Paris," calling the sale "a failed attempt to clean up Vattenfall's dirty environmental record."

"It fosters the continued digging up and burning of dirty coal in the region," he said in a statement.

Greenpeace spokeswoman Annika Jacobson said it "implies a direct subversion of the Paris Agreement."

Four environmental activists were briefly detained last month after climbing on top of the entrance of the Swedish government headquarters disguised as construction workers to protest the sale. In May, an environmental activist was arrested for squirting a red liquid from the spectators' gallery during a debate on the issue in Parliament.

Last year, 195 countries reached a deal on curbing global warming. The so-called Paris agreement aims to keep the global temperature rise below 2 degrees Celsius (3.6 degrees Fahrenheit) compared with preindustrial times. It enters into force once 55 countries representing at least 55 percent of global emissions have joined it.

"Europe needs to phase out coal as soon as possible to stand a chance of meeting the Paris Agreement," said Johan Rockstrom, a professor of Global Sustainability at Stockholm University. "This decision is disgraceful and unacceptable."


UN criticises UK and Germany for betraying Paris climate deal

Climate change envoy singles out both countries for subsidising the fossil fuel industry and says the UK has lost its position as a climate leader

Adam Vaughan

https://www.theguardian.com/environment/2016/jul/18/un-criticises-uk-and-german-for-betraying-the-spirit-of-the-paris-climate-deal

18 July 2016

Ban Ki-moon’s climate change envoy has accused the UK and Germany of backtracking on the spirit of the Paris climate deal by financing the fossil fuel industry through subsidies.

Mary Robinson, the former president of Ireland and UN special envoy on climate change and El Niño, said she had to speak out after Germany promised compensation for coal power and the UK provided tax breaks for oil and gas.

Governments in Paris last year not only pledged to phase out fossil fuels in the long term but to make flows of finance consistent with the reduction of greenhouse gas emissions.

“They’ve [the British government] introduced new tax breaks for oil and gas in 2015 that will cost the UK taxpayer billions between 2015 and 2020, and at the same time they’ve cut support for renewables and for energy efficiency,” she told the Guardian.

“It’s regrettable. That’s not in the spirit [of Paris]. In many ways, the UK was a real leader [on climate change] and hopefully the UK will become again a real leader. But it’s not at the moment.”

The criticism comes as Theresa May’s government has come under fire at home and abroad for its leadership on climate change after it abolished the Department of Energy and Climate Change. Senior figures such as the outgoing UN climate change chief have urged the UK not to abandon its climate commitments as it leaves the EU. “Let us remember that the Brexit vote was not about climate change,” said Christiana Figueres.

Natalie Bennett, the leader of the Green party, said: “This damning indictment of the UK’s energy policy comes just days after our new prime minister scrapped the Department of Energy and Climate Change and appointed an environment secretary who has consistently voted against measures to tackle climate change.

“I urge Theresa May to listen carefully to Robinson’s remarks and start reversing the damaging policies put in place by her predecessor – like giving tax breaks to fossil fuel companies while cutting subsidies for renewables.”

Robinson said that while Germany had made some positive steps such as aiding developing countries on climate change, it was sending mixed messages.

“Germany says its on track to end coal subsidies by 2018 but the German government is also introducing new mechanisms that provide payment to power companies for their ability to provide a constant supply of electricity, even if they are polluting forms, such as diesel and coal,” she said. She called on Germany to make a real commitment to get out of coal.

But she said her criticism was far from limited to the two countries. “We want all countries to end [fossil fuel] subsidies,” she said.

Robinson’s intervention comes as a group of international statesmen and women including her, Kofi Annan and Desmond Tutu, known as the Elders, released a statement saying they had “major concerns” about action by leaders since the Paris agreement last December.

Presidents and prime ministers across the world are making investment decisions that run contrary the Paris deal, they warned. “Some countries are even increasing subsidies to fossil fuel production. This is simply not good enough. While all countries need to act, the industrialised and wealthy countries must lead by example.”

A G7 pledge in May to phase out “inefficient” fossil fuel subsidies by 2025 was “too vague” a commitment and the summit in Japan failed to take action to end subsidies, the group said.

They also said that governments needed to adopt carbon pricing. Ernesto Zedillo, one of the group and a former president of Mexico, said: “Governments and businesses may pay lip service to the transition to carbon neutrality but they need an economic imperative to ditch old models and move to environmentally sustainable investments: pricing carbon provides such an incentive.”

Furthermore, the Elders said they were concerned that the world’s top 10 biggest greenhouse gas emitters had not yet ratified the Paris deal. The US and China have both pledged to ratify the deal this year, which only comes into force once at least 55 countries representing at least 55% of global emissions have ratified.

The likely US Republican presidential nominee, Donald Trump, has said he would try to unpick the deal, but Robinson said if it was ratified by the US this year “unwinding it would be very prolonged and difficult. I sincerely hope we won’t be facing that problem.”

However Hillary Clinton would be good on climate because she had been pushed by Bernie Sanders to adopt an ambitious climate change platform, she said.

Robinson said she been to Ethiopia recently and seen firsthand the way manmade climate change was exacerbating natural climate phenomenons such as El Niño, which brings drought to some parts of the world, and flooding to others. “I saw so many malnourished children, and it’s not tolerable.”

A government spokesperson said: “We will need oil and gas for some decades to come, as part of a broader energy mix which also includes nuclear and renewables. We are phasing out the dirtiest form of electricity generation, coal, and encouraging investment in low carbon supply instead, so we can deliver secure and affordable energy across the country.”


Rotterdam offers burial at sea for greenhouse gases

By Barbara Lewis and Robert-Jan Bartunek

Reuters
 
19 July 2016

ROTTERDAM, Netherlands/GHENT, Belgium - A scheme to collect millions of tonnes of greenhouse gases and bury them under the North Sea off the coast of Rotterdam is Europe's best hope of showing it can make carbon capture and storage (CCS) technology work.

Rotterdam, Europe's largest port, is the home to the sole survivor of a dozen European Union pilot plans to test CCS technology that has been thwarted by years of false starts.

Fossil fuel and mining firms need to make CCS work if they are to avoid being left with "stranded assets", or energy resources whose value has to be written off because they fail to meet regulatory rules.

Scientists say the technology is essential if the world is to meet targets to curb global warming because fossil fuels cannot be phased out quickly enough.

However, industry has so far been reluctant to pay upfront costs to get the technology running.

But that mood is changing as industry concedes that CCS is cheaper than abandoning assets and as political pressure grows following December's Paris Agreement on climate change.

Political backing is particularly strong in the Netherlands following a court ruling that it must act faster to cut greenhouse gases.

"We are extremely positive it will materialize," Allard Castelein, chief executive of the Port of Rotterdam Authority, told Reuters, adding he expected a final investment decision on the 500 million euro ($555 million) project this year.

"If there's one port anywhere where this should be achieved, it should be Rotterdam."

The Ideal Location

Rotterdam has an existing network of pipes that can be used for carbon shipments. Its location makes it easily accessible to Belgian and German as well as local Dutch industry, differentiating it from the abandoned EU schemes.

Future expansion could mean shipping carbon dioxide from international industry through pipes or on tankers into the giant harbor near disused offshore gas fields that could store hundreds of millions of tonnes.

Named ROAD after the Dutch acronym for CCS demonstration, the pilot project would capture around 1 million tons of carbon emissions per year from a local coal-fired power station over a three-year pilot phase. It would compress them, then pump them into a depleted gas field.

The Rotterdam power station is owned by Uniper, the unit into which Germany's E.ON has spun off its coal and gas-fired power stations.

It and French power company Engie have jointly invested 100 million euros into the project. Other funds come from the Dutch government and the European Commission.

Hans Schoenmakers, a director at Uniper and at ROAD, said that backing from the Dutch government and European Commission gave him confidence.

"There is a general belief there is no way around it," he said. "We have to meet targets for CO2 reduction."

However, the definitive go-ahead might take until early next year, he said.

That would allow time for an expected Dutch government decision on a phase-out of coal-fired generation, which analysts say would exempt the Maasvlakte plant integral to the ROAD CCS experiment. Uniper spent 1.6 billion euros on its new Maasvlakte unit opened in May.

Following Canada's Lead

Globally, oil-rich Canada has led the push for CCS with Saskatchewan Power's (SaskPower) [SSPOW.UL] Boundary Dam project, which in 2014 became the first large-scale CCS project at a coal-fired plant.

The project draws economic justification from being close to oilfields. That means captured emissions can be injected to help recover more oil, although it triggers opposition from environmental campaigners who say it only serves to prolong fossil fuel use.

In Europe, industry complains it has little incentive to invest in CCS when burning coal, the most carbon-intensive fossil fuel, remains cheap because pollution permits on the EU Emissions Trading System (ETS) are stuck at around 5 euros per ton in an oversupplied market.

As the pressure to act builds, however, it is seeking ways to generate revenue from schemes to lower emissions.

The world's largest steelmaker ArcelorMittal has begun work to create bioethanol from steelmaking emissions at its plant in Ghent, Belgium, by using bacteria to trigger a chemical reaction.

The bioethanol can be used as fuel and hence generate cash, while reducing the carbon intensity of steel-making and displacing fossil fuel.

Carl De Mare, head of ArcelorMittal's emerging technology development, said the 100 million euro project would produce around 50,000 tonnes of zero emissions bioethanol by mid-2018.

But once the biofuel is burned, it releases the carbon dioxide from which it was made, meaning projects to re-use carbon still need to be matched with CCS to eradicate the emissions permanently.

Stuart Haszeldine, a CCS professor at Edinburgh University, says it is essential to establish CCS through trial schemes, such as the one in Rotterdam that begin small but can grow to achieve economies of scale and connect to other projects.

"If this does not happen, then, logically, all the carbon extracting companies should gradually become defunct," he said.

(Editing by Keith Weir)


Poland's disappearing lakes fuel battle over coal mining

By Claudia Ciobanu

Thomson Reuters Foundation 

10 July 2016

WILCZYN, Poland - In early summer, the Wielkopolska region in western Poland looks like a scene from "The Hobbit" with intense green fields and lakes surrounded by dense forest and pretty cottages.

But there is growing disquiet in this rural idyll with more and more summer houses up for sale and farmers battling arid land and crop losses amid escalating protests about the impact of lignite coal mining in the area.

Residents ranging from fishermen and farmers to mayors and small business owners say water in the region's lake system is disappearing, drying out farmland and jeopardizing the region's economic base in agriculture and, more recently, tourism.

Drought and climate change, however, are feared to not be the only culprits, with mining of lignite, or brown coal, sapping underground waters and pitting residents against major energy company ZE PAK's proposal for another new mine.

Grzegorz Skowroński, the mayor of Wilczyn, a municipality about 200 km (125 miles) west of Warsaw, said Lake Wilczyńskie's water level has fallen five metres (16.4 ft) since 2011 and is dropping up to four centimeters a week now.

"The state of the lake today is catastrophic and nearby lakes are affected too as they are all inter-connected," Skowroński told the Thomson Reuters Foundation.

Wetlands Disappearing, Canals Drying Up

Wilczyńskie and four other nearby lakes are part of Pojezierze Gnieźnieńskie, a nature reserve protected under the European Union's Natura 2000 network designed to offer a haven to valuable and threatened species such as the area's oak trees.

Historically one of the driest regions in Poland, rainfall has been particularly low in recent years and the fall in Lake Wilczyńskie waters and other nearby lakes is clearly visible.

A pier in Lake Ostrowskie now sits almost entirely on dry land while canals previously linking adjoining lakes contain no water. Wetland plants sit in dried clumps away from the water.

"The lignite mines are definitely to blame. The lake dropped by five metres since they started to massively drain the soil to dig for coal at the Jóźwin mine," Skowroński said.

Jóźwin is one of three open-pit lignite mines in the region operated by KWB Konin, an arm of ZE PAK (Zespół Elektrowni Pątnów-Adamów-Konin SA), the second largest lignite electricity producer in Poland which was formerly state controlled.

ZE PAK, controlled by billionaire Zygmut Solorz-Zak since 2012, operates four power plants in Wielkopolska which are fueled by lignite, the second most important source of energy in Poland after hard coal, and argues a new mine is needed to supply fuel for these plants.

Despite pressure on the coal industry to abide by the European Union's energy and climate policies, the Polish Treasury confirmed it is studying an offer from Solorz-Zak to return the Warsaw-listed power group to state-control.

Water Drops Not Us: Company

KWB Konin said the water drops are not the company's fault while acknowledging that the mines siphon groundwater from surrounding land before excavation can start in the open pits.

Grzegorz Frąckowiak, KWB Konin director of investments, said regional authorities are preparing to finance a plan to replenish waters to Lake Wilczynskie, proving the company is not responsible or it would have to pay for this.

"Open pits have existed and continue to exist in this region and look how many lakes there are," Frąckowiak told the Thomson Reuters Foundation.

Pointing to a map showing the company's other mines, he said the company had worked the region for 70 years and "those lakes continue to be here".

"There is no question that in our activity we drain water and then throw it out .. but if you sit on the edge of any of our mines and look around, you see green lands and farming taking place right next to the pit."

Requests for an interview with ZE PAK did not receive a reply.

We Need Water Back: Communities

Experts say the removal of groundwater for mining creates a so-called 'cone of depression' and the biggest water level drops occur in areas closest to the mines.

"We have to dig wells 100 metres deep now if we want to have drinking water," says Ewaryst Matczak, the mayor of Strzelno, another locality in the vicinity of the Jóźwin mine.

"The problem is that after mining, it is cheaper for the company to just dump the water into the river Warta from where it goes into the Baltic Sea instead of cleaning it up and pouring it [back] into our lakes," said Matczak.

"We need them to keep the water here."

Poznan University Amad Michkiewicz biologist, Julian Chmiel, said the location and structure of the region's lakes and wetlands showed they are connected to groundwater aquifers affected by the mines' underground drainage.

"[There is] no doubt such strong and directional lowering of levels of groundwater aquifers and superficial waters is caused by mining activities," he said, adding many native plants have disappeared from the region and the old oak trees are dying.

Farmers Losing Livelihood

Local farmers and environmental NGOs have warned of water losses for more than 10 years but made a first, formal complaint to the European Commission in 2008.

In 2010, a 'non compliance' statement was issued against Poland for allowing a new KWB Konin mine, Tomisławice, in the eastern part of Wielkopolska.

According to the Commission, mining at Tomisławice has had an adverse impact on the area with farmers reporting crops affected.

"Less water means my income has been reduced to half since the mine is here. We are becoming poor," said farmer Józef Imbiorski, who lives a few kilometers from Tomisławice.

He said neighbors called him "the green frog" as he was the first, lone voice to complain about the mine. Now, he said, more farmers supported him as their land is also affected.

Maciej Muzykiewicz, whose 280-hectare farm lies just 800 metres from the Jóźwin mine, said he has also lost almost half his income as water levels have dropped and can now only plant seed once a year compared to twice previously.

"Surface waters are gone now .. so we have to rely on rain for farming, but that's not enough because it has been so dry with the climate changing," said Muzykiewicz.

KWB's Frąckowiak said the mines "certainly have an impact on farming land and its productivity" but stressed that the company abides by the requirements of Polish law.

"We pay fair reparations to the farmers to make up for the damage," he said.

Muzykiewicz, however, said claiming damages is complicated and only accessible to farmers like him with larger holdings and able to hire experts to show the link between mining and losses.

From Farms to Industry

In January this year, the Polish Ministry of Agriculture rejected a request by KWB Konin to turn farming land into industrial land in three areas, including Wilczyn where the company wants to open a new open pit mine.

But following an appeal by the company, the ministry has said it will re-assess its decision within weeks.

The Wilczyn Mayor, Grzegorz Skowroński, said he believed a new pit would "kill off" Lake Wilczynskie.

Pawel Kaczorowsky, a specialist with the Miradzskie forest service, an area also part of the Pojezierze Gnieznienskie Natura 2000 site, said a new mine just seven kms from the forest would have "devastating consequences".

"We are trying to take mitigation measures but the problem is huge. Trees die or are weakened and susceptible to woodworm attacks and the forest is more prone to fire," he said.

The vice director of Geological Concessions in the Ministry of the Environment, Rafal Misztal, told the Thomson Reuters Foundation that even if the Ministry of Agriculture decided in favor of ZE PAK, the law would not allow a new license to be issued if the local government vetoed the plan.

(Reporting by Claudia Ciobanu, Editing by Paola Totaro and Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights and climate change. Visit news.trust.org)


Poland to spend on boosting its image, defending coal industry

Reuters

13 July 2016

Poland's state-controlled firms will pay $25 million per year to finance a foundation aimed at bolstering its reputation abroad, Treasury Minister Dawid Jackiewicz said on Wednesday.

He said one of the foundation's tasks will be to defend Poland's coal industry from European Union plans to curb carbon emissions.

Since winning the first outright parliamentary majority since Poland's 1989 transition from communism, the Law and Justice (PiS) party has overhauled the rules governing the constitutional court, prompting the EU executive to launch an unprecedented inquiry in January into whether the party has weakened the rule of law -- a notion PiS mostly rejects.

"Poland is gaining today a strong weapon in the fight for its good name," Jackiewicz told a news conference with Prime Minister Beata Szydlo, announcing the Polish National Foundation.

He said it would have an annual budget of over 100 million zlotys ($25 million), roughly the same as the upper chamber of parliament, the Senate.

"We are a country with great ambitions, we want to conquer the world, conquer markets. We are prepared and now it's time to make the next step and launch the National Foundation," Szydlo said.

PiS, backed by about 40 percent of Poles according to opinion polls, has sought to increase or solidify state control over economic sectors including banking, energy and chemicals.

Even before the party replaced a centrist government last year, a 2013 study from the Organisation for Economic Co-operation and Development showed Poland had one of the highest levels of state control among its members.

On Monday, PiS leader Jaroslaw Kaczynski said the government should recuit "very serious" firms outside Poland act to its defend Poland's reputation. ($1 = 3.9736 zlotys) (Reporting by Jakub Iglewski, Marcin Goettig, and Marcin Goclowski; Writing by Marcin Goettig; Editing by Ruth Pitchford)


 Global

Like many of its members, the World Coal Association is running at a loss

by Bob Burton

http://endcoal.org/2016/07/like-many-of-its-members-the-world-coal-association-is-running-at-a-loss/

6 July 2016

Like many of its member companies the World Coal Association (WCA), the global coal industry’s London-based lobby group, ran at a loss in the last financial year.

In the year to the end of September 2015 the non-profit company, which had income of US$1.7 million for the year ran up a loss of US$108,000.

In its latest financial statements, which were publicly released late last week, the lobby group expressed optimism that by September this year it will manage to chalk up a surplus due to “tighter controls over budgeting and cashflow.”

Perhaps, perhaps not.

The WCA’s membership roll continues to be dominated by a handful of major companies – Peabody, Glencore, Anglo American, Rio Tinto, mid-level US producer Bowie Resource Partners, the struggling Australian company Whitehaven Coal, the Chinese coal companies Shenhua and the China National Coal Group and a smattering of others including equipment and other suppliers.

The member companies all have their own financial challenges piled on top of the bleak prospects of the coal industry.

The WCA once pinned its hopes on selling the potential of Carbon Capture and Storage (CCS) as the magic bullet which would assuage public concern about climbing emissions of greenhouse gases from coal power plants. However, by late 2014 CCS was largely seen as likely to contribute too little, too late and at a phenomenal cost.

As the political isolation of the industry grew throughout 2014, panic gripped the industry.

In December 2014 the WCA appointed Benjamin Sporton – who had worked as the organisation’s Deputy CEO since 2012 – to replace its Chief Executive Milton Catelin. (Catelin now works for the PR firm International Public Affairs.)

The WCA’s financial statements reveal the services of Catelin and Sporton haven’t come cheap.

In its annual statements for the year to September 30 2014, the WCA revealed the total cost of employing Catelin, including contributions to his pension plan, came in at just over US$551,000 (at current exchange rates).

In the latest financial year – which covered the tail-end of Catelin’s tenure and a nine-month period when Sporton was at the helm – the WCA paid out over US$831,000 in remuneration for the duo, accounting for almost three-quarters of the organisation’s costs for its five staff.

The WCA pitches the story the climate can only be saved … by burning more coal

Shortly after Sporton took over as Chief Executive the lobby group unveiled its latest technological sales pitch on how burning more coal would supposedly solve the problem caused by burning coal.

Having relegated CCS to the backburner the WCA unveiled ‘High Efficiency Low Emission’ coal plants as the industry’s latest magic bullet.

According to the consultancy Ecofys the notion that building slightly more efficient coal plants is consistent with achieving a target of limiting global warming to a 2 degree temperature increase doesn’t survive scrutiny.

In a separate analysis Climate Action Tracker estimated that even if none of the 2440 coal plants proposed at the time were built, power sector emissions would exceed the 2 ̊C pathway by 150 per cent.

None-the-less the WCA headed to the Paris climate change conference last November and December determined to try their luck.

Despite the WCA’s new PR pitch, the lobby group made little headway. Where previous negotiations had been premised on aiming to keep the temperature increase to under 2 degrees the Paris Agreement conceded many countries viewed a target of 1.5 degree temperature increase as what is required.

In its 450 Scenario – which nominally equates to achieving the 2 degrees temperature cap – the International Energy Agency estimates coal use would have to fall by a little over 30 per cent by 2040. Achieving the lower 1.5 degrees target would require an end to new coal plants and a rapid phase out of the existing fleet, no matter how efficient they are.

As the implications of the Paris Agreement for the coal industry sinks in among policy makers and financial institutions – complemented by the rise of solar and wind as the default generation option in many countries – the coal industry’s standing has weakened further.

The lobby group’s ten-member Executive Committee and leadership team reflects the story of the ongoing financial crisis gripping the industry.

One of the Executive Committee members is Glenn Kellow from Peabody Energy, a coal company currently immersed in bankruptcy proceedings and finding its financial position worsening by the month.

Another member is Seamus French from Anglo American, a diversified mining and minerals company in the process of selling off coal assets. The odds are that in the very near future Anglo American will no longer see the value in spending scarce cash and even scarcer time of a senior executive on the problems confronting the WCA.

Another member of the committee is Chris Salisbury from Rio Tinto, another diversified mining company which has also been busy offloading unwanted coal mines.

Back in December 2015 the head of Rio Tinto’s coal and copper division, Jean-Sébastien Jacques, trotted out a common coal industry line that – despite all its challenges – “coal demand is not going to disappear.”

Bloomberg columnist David Fickling neatly punctured the Jacques hype. “So why all the happy noises? Well, a used car dealer doesn’t list the flaws of all the models in the showroom, and mining executives are little different. Jacques has a couple of coal mines he might like to sell. His actions speak louder than his words,” Fickling wrote.

Since then Rio Tinto has continued to offload mines, the latest for just A$1 to a little known company call Terracom. For its part Terracom insists Rio Tinto and the other joint-venture owners have agreed to pay it A$80m to cover the cost of mine rehabilitation.

Even Jacques, who is now the company’s Chief Executive, has conceded he sees a bleak outlook for coal, telling the Financial Times it is one of the commodities for which “there is a long way to go” before oversupply in the global market eases. “Our view is that prices will remain under pressure,” he said.

With coal prices are low, markets declining and debt-laden companies looking to trim costs and offload dud assets, expensive dues for industry lobby groups look increasingly like an unaffordable luxury.

The WCA’s financial statements reveal that since October 2014 five full corporate members have left while it has recruited only two replacements. (The new recruits are Aurizon, the Australian rail freight company with a heavy reliance on coal and Banpu, a Thai coal mining and power generation company.)

With the coal industry’s financial crisis showing little prospect of abating, it may well be that the WCA’s next sets of financial statements feature as much red ink as the accounts of their recently-departed members.


Why does the Colombian coal industry need help from a London lobby group?

by Bob Burton and Richard Solly

http://endcoal.org/2016/06/why-does-the-colombian-coal-industry-need-help-from-a-london-lobby-group/

29 June 2016

A few months ago the Colombian Mining Association (CMA) joined the London-based World Coal Association (WCA), the coal industry’s global lobbying group.

While the WCA rather cryptically proclaimed it would be assisting the CMA “on issues ranging from sustainable mining practice to climate change” the move reflects growing panic among Colombian coal exporters as domestic and international opposition to coal mining and burning grows, global markets shrink and the price of thermal coal plummets.

During the decades-long civil war the Colombian coal industry grew to where it now ranks as the fourth largest exporter of power station coal in the world behind Indonesia, Australia and Russia.

The growth of the Colombian coal industry came at a terrible cost, including the dispossession of communities and widespread human rights abuses against members of the mining workforce and residents. Coal not only polluted the air and water but the country’s politics as well with credible reports of at least one coal company providing support for militias involved in human rights abuses.

The growth of the coal industry also bred a deferential view that the central government should cater for the every whim of an industry touted as central to an export-centric economic strategy.

But affected communities have not taken it lying down.

When in January 2013 Drummond, a US-headquartered coal company, dumped more than 1700 tonnes of coal into the ocean from a barge at risk of sinking in Santa Marta bay – a major tourism destination – lawyer Alejandro Arias photographed the operation. His photos of the coal dumping were widely used on the front pages of major Colombian newspapers and sparked public outrage.

When Drummond ignored a January 1, 2014 deadline – set seven years earlier – requiring the use of a direct ship-loading conveyor system to minimise pollution, Arias publicised the breach through both social and mainstream media. With elections looming, the Government insisted Drummond shut down its export operation until the new loading system was completed.

A series of successful legal actions have also sent shock waves through the coal industry.

After a campaign by local communities, Colombia banned mining in the sub-alpine tundra known locally as the ‘paramos’. The paramos are ecologically rich and play an important role in protecting water quality for millions of people living in downstream cities. In one decision, in February 2016 Colombia’s highest environmental authority directed Hunza Coal to shut one of its three pits in the paramo and to present a restoration plan within 45 days.

In a separate case, Colombia’s constitutional court cancelled 347 mining licences in the region, including for coal projects, overturning a lower court decision allowing companies to continue their operations until the leases expired.

Despite the decisions, Greenpeace Colombia found government agencies have failed [Spanish] to enforce the court ruling.

The constitutional court has also ruled in favour of a local government challenge against a 2001 law which blocked provincial and local authorities from restricting mining. The law also specified only the national government had the right to approve mining permits. The ruling, which has been criticised by the CMA, opens the prospect that local and provincial governments could block coal and other mining operations on environmental or other grounds.

Other legal actions, while ultimately overturned, have put the industry on notice that the old days -when they could do almost whatever they wanted – were over.

In January 2015 the residents of Bosconia won a night-time ban on coal trains rumbling through their town, disrupting residents sleep and polluting the air with coal dust. The Constitutional Court subsequently extended the ban to cover three other communities along Fenoco’s railway line to Puerto Nuevo coal port.

While the ban – which hit the coal exports of Drummond, Glencore’s subsidiary Prodeco and Goldman Sachs’ then company CNR – was subsequently overturned in November 2015 when the coal companies persuaded the court some noise mitigation measures were sufficient to override residents’ objections.

Cheap to produce but a long way to travel

Colombian coal has long been regarded as cheap because of low labour costs, which flowed in no small measure from the notoriously oppressive conditions for unions in the coal-producing regions. However, it relied on ready access to the booming demand for coal in Europe, which took over half the country’s exports. Until recent times the remainder went predominantly to the Americas.

With coal exports having doubled since the turn of the century, the industry dreamt the boom-time demand would keep underwriting further expansions.

Back in August 2011, the joint venture partners in the Cerrejon Coal Company – Glencore, BHP Billiton and Anglo American – were so optimistic they agreed to spend US$1.3 billion building new port, transport and mining capacity to produce another 8 million tonnes-a-year for the export market.

While the expansion has been commissioned the new capacity has barely been used, in part due to the souring global market for thermal coal and in part due to a lack of water.

To expand exports the Cerrejon Coal Company needed to expand the mine, which has intensified conflict with communities near the massive Cerrejon coal mine. Those living near the mine have persistently raised their voices about forced removals of residents, pollution and the huge environmental impacts of the projects.

The company’s determination to press ahead with the Cerrejon mine expansion continues to fuel conflict, with a riot control unit of Colombia’s police attacking a February 2016 protest against the eviction of remaining residents of the village of Roche.

The company’s plan to divert the Arroyo Bruno stream, a vital water supply for residents and of environmental significance, is one of the latest flashpoints between the consortium and local communities. An open letter to the company and its joint-venture partners has also raised concerns about the health impacts of the mine.

The accelerating retirement of old coal plants in Europe – a prime market for Colombian coal – has hit the exporters hard.

With old plants being shuttered to comply with the European Union’s 2001 Large Combustion Plant Directive and its recent successor, the Industrial Emissions Directive, European demand for Colombian coal has been under sustained pressure. On top of the closure of old plants has been stagnating power demand in major markets, the imposition of a price on carbon dioxide emissions and the dramatic rise of renewables.

The UK, which in the last quarter of 2015 sourced over half its thermal coal imports from Colombia, is emblematic of the transformation. With coal plant closures accelerating and those remaining running less frequently, the most recent data indicates UK imports of Colombian coal fell by a third in a year, a trend which will continue as more plants close.

In Europe, falling demand has also been supplemented by pressure on buyers to end buying ‘blood coal’ from companies such as Glencore’s Colombian subsidiary Prodeco until the concerns of the victims of human rights violations have been addressed.

In April 2016 the Danish utility Dong Energy informed a coalition of environmental and social justice groups it would not sign any new contracts with Prodeco “until we are comfortable that Prodeco is meeting our standards of responsible sourcing.”

As the viability of exports from Colombia has declined, companies have decided to bail out of the Colombian industry altogether.

In August 2015 Goldman Sachs offloaded its loss-making Colombia Natural Resources mines to the US coal company Murray Energy. It was estimated Goldman Sachs – hit by labour disputes, environmental controversies and falling prices – lost up to US$200 million over five years on its Colombian coal foray. (Murray Energy, hit by the rapid decline in demand in the US coal market, views diversifying into Colombian coal as a way of expanding into the international market.)

Anglo American is also heading for the exits. One of its many coal interests it is looking to off-load its one-third interest in the Cerrejon mine. Glencore has flagged it would consider increasing its stake in the joint venture “at the right price” while BHP Billiton has been more circumspect stating it would “consider opportunities that come up.” (In its most recent investor presentation (pdf) BHP Billiton states its thermal coal portfolio – which includes Cerrejon – produces coal ranked as being in the lowest 10 per cent in terms of production cost.) [See p. 10]

As demand for Colombian coal in traditional markets has plummeted, exporters have desperately started looking further afield to other possible markets in Japan and South Korea.

While the opening of a new shipping lane with the Panama Canal may cut the transport time, growing resistance to Colombian coal exports from both within and outside the country – combined with falling demand in the seaborne coal market – could well mean that Colombia’s coal production capacity may have peaked.

This is why the peak Colombian coal lobby group has turned to the World Coal Association for PR and lobbying assistance in Europe.

 

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