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Bukit Asam Reviewing 2020 Target as Q1 Production Slides

Indonesia's PT Bukit Asam produced 5.5 million tonnes of coal in the January-March quarter, down 3.5% from a year earlier while sales volumes rose 3% to 6.8 million tonnes with 65% to domestic buyers. The company aims to produce 30.3 million tonnes of coal this year and sell 29.9 million tonnes, but the targets may be downgraded due to disruptions linked to the spread of the novel coronavirus. Bukit Asam chief executive Arviyan Arifin said "We are reviewing the possibility to revise our targets to be more realistic."

The company's capital expenditure target this year may also be revised.

The average selling price of Bukit Asam's coal fell nearly 4%.

Source : Strategic Research Institute
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Cerrejon Ramping Up Coal Production

Owned equally by BHP, Anglo American and Glencore, Colombian coal miner Cerrejon has started ramping up operations following a temporary reduction as part of efforts to slow the spread of the novel coronavirus. Cerrejon vice president Juan Consuegra said "We are aware of the positive impact Cerrejon has on the regional economy and to the country, that is why we have proposed the gradual re-starting of our operations under strict security and control measures.”

Cerrejon, which exported 26.3 million tonnes of coal in 2019, in March reduced its operations and established a contingency team to ensure compliance with environmental rules, care for equipment and infrastructure, and make sure export obligations were met. While operations were reduced 80% of Cerrejon staff had access to vacation time. Later on, people who were not part of the contingency team and could also not work from home received paid leave,.

Source : Strategic Research Institute
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Sumitomo Elects to Proceed to Hillalong Joint Venture

Bowen Coking Coal Ltd has provided an update on the Farm-In Agreement on the Hillalong Coking Coal Project, with SCAP Hillalong Pty Ltd, a wholly owned subsidiary of the Japanese Conglomerate Sumitomo Corporation as announced on 18 November 2019. On the 29 April 2020, the Company received a further payment of AUD 1.2 million from Sumitomo, representing the outstanding balance of the Phase 1 Farm-in amount of AUD 2.5 million.

Under the Agreement, Sumitomo had 20 working days after the final payment (referred to above) to exercise their right to take up the 10% interest in the BCB managed Joint Venture. Pleasingly, the Company can confirm that it received correspondence from Sumitmo, after the close business on Friday, 1 May 2020, whereby Sumitomo have already formally exercised their right to take up that 10% interest, and therefore BCB and Sumitomo will now proceed to enter into a formal Joint Venture Agreement.

Source : Strategic Research Institute
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Hwange Colliery Company Reports Recovery in 2019

Listed coal miner Hwange Colliery Company Limited, , which was placed under administration in 2018, swung from a loss position of ZWL 487 million to post profit after tax of ZWL 1.5 billion during the year ended December 2019, buoyed mainly by sales mix change and increased product pricing. Company’s administrator Bekithemba Moyo said “Financial performance improved in 2019 against comparable period in 2018 despite decreased production and sales volumes. This was largely due to a change in the sales mix, which saw high value coking coal production and sales going up by 20% as well as improved product pricing. Production and sales were adversely affected by the shortage of diesel coupled with unavailability of wagons.”

Revenue surged by 105% from ZWL 429 million in 2018 to ZWL 881 million in 2019 on an inflation adjusted basis largely due to a combination of an increase in high value coking coal sales as well as frequent adjustments to product prices in line with changes to the Interbank rates which were introduced in February 2019.

There was a production gap of 64% in total coal mined of 1.013 million tonnes, compared to sales potential of 2.819 million tonnes as the market remains with a high appetite for the product as evidenced by the 2019 order book.

Zinyemba said main underground run of mine coal production was 37% better than the previous year, but 35,5% below the target. During the year 268 603 tonnes of RoM coal was produced against a budget of 409 500 tonnes attributable to the resuscitation of the Sandvik LHD, improving operational funding support and the credit facility that was availed by OEM (Komatsu SA), which has been working well.

A total of 554 619 tonnes of coal was delivered to Hwange Power Station during the course of the year.

During the period a total of 628 727 tonnes raw coal was processed at both Chaba and No 2 plants against a target of 1 440 000 tonnes which is 44% attainment of the target.

Source : Strategic Research Institute
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Mandatory Washing of Thermal Coal for Power Plants May be Removed

Business Standard reported that Indian government is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministry of Environment, Forest and Climate Change, in a discussion note, suggested that coal washing should be done away with, as it does not bring down the ash content in coal. The environment ministry now in its latest note has said, “In the overall scheme of coal, mine, washery and power plant, the extent of ash content in mined coal remains the same.”

The note has been prepared in consultation with the ministry of coal, power and Niti Ayog. Agreeing that coal washing does not help reduce emissions, the power ministry said that coal rejects from washery find their way into the market for use by industries and create pollution. Coal ministry said washing of coal is unable to meet its intended objective as it merely localises the pollution around coal mines which otherwise would have been distributed over larger areas.

In 2014, as part of its climate change commitments, the government had made coal washing mandatory for supply to all thermal units beyond 500 kms from the coal mine. This was done in line with India’s stand in climate change negotiations - not to reduce coal consumption and rather focus on emission control. MoEFCC, in its guidelines issued the same year, said, “Power stations located between 500-750, 750-1000 km would be supplied coal with ash content not exceeding 34 per cent on quarterly average basis from January 01, 2016." It, therefore, directed the coal companies to supply washed/blended or beneficiated coal.

According to industry calculations, coal washing improves the quality of coal by reducing the ash content to 33 per cent from an earlier 40-45 on an average for Indian coal.

Source : Strategic Research Institute
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MC Mining Resumes Coal Production at Uitkomst Colliery

MC Mining Limited has provides a market update with regards to the impact on the Company of the global COVID-19 pandemic. Level 4 of the Lockdown authorises some business activity, subject to extreme precautions and under specific conditions. The underground Uitkomst Colliery is permitted to ramp up to 50% of labour capacity and must adhere to detailed health and safety protocols and introduce workplace plans to enable disease surveillance at site and prevent the spread of infection.

The Uitkomst Colliery has implemented standard operating procedures that comply with the required measures and limited activities at the mine recommenced on 4 May 2020. Uitkomst is a mechanised underground operation and it will be possible to ramp-up to 50% capacity within 7 to 10 days. During this period the colliery will assess the effects that the Lockdown has had on critical suppliers while the coal off- take market remains challenging due to the restrictions imposed on businesses. Uitkomst is in constant communication with its customers to ensure their requirements are met and the colliery is only expected to return to full operating capacity following further reductions in the national coronavirus alert assessments and once coal off-takes have normalised.

The Lockdown also impacted activities at the Makhado, Vele and Greater Soutpansberg Projects as well as the Company’s corporate office and led to the implementation of business continuity measures as well as stringent health and safety procedures. This also resulted in the Company having to implement a ‘no work, no pay’ policy for non- essential staff and a portion of wages were paid by the Government’s Temporary Employee/Employer Relief Scheme, reducing the adverse financial impacts that the Lockdown is having on staff. The Company has also adopted a work-from-home strategy and where possible, staff will continue to work remotely.

The South African Government issued a directive on 23 March 2020 requiring a 21-day national lockdown, effective 26 March 2020 to 16 April 2020. The Directive was as a result of a level 5 national coronavirus alert assessment and resulted in the high-grade Uitkomst metallurgical and thermal coal mine being placed on care and maintenance. The Lockdown was subsequently extended and on 23 April 2020 the Government announced a phased, risk-based approach to lifting restrictions and the alert level reduced to level 4 from 1 May 2020.

Source : Strategic Research Institute
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Coal India Focussing on Overburden Removal as Coal Demand Slumps

Coal India has shifted its focus to overburden removal, the process of removing the top soil and rock to expose coal seams in its open cast mines, as the power sector, a major consumer of the dry fuel, has witnessed almost 30 per cent drop in fuel consumption amid the lockdown. The enhancement in overburden removal will enable Coal India Ltd to accelerate coal production whenever the demand picks up and coal can be supplied to its customers at short notice. An official said “The company has shifted its focus to the enhancement of the overburden removal. Over 95 per cent of CIL’s coal production comes from its 171 open cast mines. There has been a sudden fall in demand for coal as the power sector, a major consumer of coal, witnessed almost 30 per cent fall in consumption since industries and commercial establishments are closed down due to the lockdown.”

The PSU removed 114.43 million cubic metres of overburden in its open cast mines in April, as compared to 104.22 million cubic metres during the same period last year, registering an increase of 9.7 per cent.

Source : Strategic Research Institute
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Cambodia Invites Firms for 4 Coal Mining Concessions

Cambodia’s Ministry of Mines and Energy is set to review applications soon for rights to four coal mining concession areas totalling 794 square kilometre, it opened late in March in the Kingdom’s north. It said “Interested national and international companies can apply for a mining licence at the General Department of Mineral Resources. It will make a public announcement naming the winning company once the process is completed.”

General Department of Mineral Resources director-general Yos Monirath told The Post “We noted the presence of coal deposits in the area, and we call on interested companies to apply for a mining licence. We reopened the coal mining concession area for private companies to invest in research because the area is zoned for mining extraction to supply coal-fired power plants that the government has decided to construct nearby,” said Monirath.

Ministry previously granted a licence to a private company for one of the areas, a 200sq km site in the Trapaing Tiem area in Oddar Meanchey province’s Trapaing Prasat districts. The company did not discover mineral resources and the ministry decided not to renew its licence.
Source : Strategic Research Institute
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CIL SECL Gevra Road to Pendra Road Railway Line Gets Funding

Coal India subsidiary South Eastern Coalfields Limited has received a credit support of INR 3,976 crore from a consortium of banks, led by State Bank of India, to facilitate evacuation of coal by rail. A loan agreement has been signed between Chhattisgarh East West Rail Ltd, a joint venture SECL and banks, to provide credit to develop a 135km of double line from Gevra Road to Pendra Road in Chhattisgarh to evacuate coal from the mines at Gevra, Dipka and Kusuminda. The project has a debt to equity ratio of 80:20 wherein the promoters are required to contribute about INR 994 crore and the balance amount of INR 3,976 crore is arranged from banks as rupee term loan.

Land acquisition and forest clearance have already been obtained for the main line of the project, which is now expected to be completed by March 2023. When completed, it will help SECL evacuate about 65mt coal every year from its mines.

SECL has a 64 per cent holding in CEWRL, while Ircon, a rail ministry undertaking, holds a 26 per cent stake. The rest 10 per cent of the stake is held by the State Industrial Development Corporation, government of Chhattisgarh.

Source : Strategic Research Institute
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Bukit Asam Reviewing 2020 Target as Q1 Production Slides

Indonesia's PT Bukit Asam produced 5.5 million tonnes of coal in the January-March quarter, down 3.5% from a year earlier while sales volumes rose 3% to 6.8 million tonnes with 65% to domestic buyers. The company aims to produce 30.3 million tonnes of coal this year and sell 29.9 million tonnes, but the targets may be downgraded due to disruptions linked to the spread of the novel coronavirus. Bukit Asam chief executive Arviyan Arifin said "We are reviewing the possibility to revise our targets to be more realistic."

The company's capital expenditure target this year may also be revised.

The average selling price of Bukit Asam's coal fell nearly 4%.

Source : Strategic Research Institute
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Cerrejon Ramping Up Coal Production

Owned equally by BHP, Anglo American and Glencore, Colombian coal miner Cerrejon has started ramping up operations following a temporary reduction as part of efforts to slow the spread of the novel coronavirus. Cerrejon vice president Juan Consuegra said "We are aware of the positive impact Cerrejon has on the regional economy and to the country, that is why we have proposed the gradual re-starting of our operations under strict security and control measures.”

Cerrejon, which exported 26.3 million tonnes of coal in 2019, in March reduced its operations and established a contingency team to ensure compliance with environmental rules, care for equipment and infrastructure, and make sure export obligations were met. While operations were reduced 80% of Cerrejon staff had access to vacation time. Later on, people who were not part of the contingency team and could also not work from home received paid leave.

Source : Strategic Research Institute
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Blast at Grosvenor Coking Coal Mine of Anglo American Injures Five

An explosion halted production on Wednesday at Grosvenor coal mine of Anglo American near Moranbah in Australia's Queensland State, injuring five people. An ignition of gas is believed to have caused the underground explosion. Anglo American said "The mine is in the process of being evacuated and operations stopped. Those injured at its Grosvenor metallurgical coal mine in the central Bowen Basin had been taken to hospital. All remaining on site personnel have been accounted for. The mines inspectorate has been contacted and Anglo American is working to ensure the injured people have the best available medical care.”

The Australian Broadcasting Corp said the patients are in critical condition after suffering burns to their upper bodies and airways following the blast.

A representative of the Queensland Mines Inspectorate confirmed its inspectors were on site and had begun an investigation into the incident.

Grosvenor produced 4.7 million tonnes of metallurgical coal in 2019.

Source : Strategic Research Institute
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SCCL Coal Output in April Shrinks by 54%

Coal production was the worst hit by the Covid-19 in Singareni Collieries Company Limited as only 2.725 million tonnes coal was produced against the target of 5.074 million tonnes in April. All the mining workers living under Red Zone had remained under home quarantine for 20 days, thus slowing down coal production. After the implementation of lockdown to contain the spread of coronavirus, the SCCL announced lay off from April 1, thus stopping coal production in about 25 mines. Coal production is being continued in Ad riyal Long Wall project, GDK-11, Shanthikhani, VK-7 and in about 18 open cast mines only.

The company has fixed a target production of 70.35 million tonnes of coal in 2020-21 financial year. But it seems the SCCL cannot complete its target.

Source : Strategic Research Institute
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Mr Bosov Found Dead in Usovo Home near Moscow

Local media reported that Russian billionaire Mr Dmitry Bosov, whose core asset was a major coal company, was found dead Wednesday in an apparent suicide near his home in the Moscow region. He was found with a gunshot wound to the head near his home in the town of Usovo and a Glock 19 Gen 4 pistol was found near his body. He was 52 years old. Mr Bosov’s net worth was estimated to be USD 1.1 billion at the time of his death, according to Forbes magazine. His core assets were VostokCoal and the Sibanthracite Group, which unites several coal produces in Siberia. Bosov was a major shareholder and board of directors chairman of the Alltek group, which controls the coal producers Siberian Anthracite, VostokUgol, and other firms. He and a partner also co-founded a company called Blackspace in 2015. Other details re not immediately known.

The RBK news agency quoted acquaintances of Bosov's as saying his affairs had been in turmoil since the beginning of the year, when he began moving assets around and dismissing employees. Early last month, Bosov dismissed his partner in the VostokUgol coal company, Aleksandr Isayev, for purported abuse of his position and embezzlement. Isayev has filed a defamation suit.

On May 1, it was reported that a former employee of the Genius Fund Group, an investment firm controlled by Bosov that is active in the legal marijuana business in the United States, had filed a civil suit against Bosov in Los Angeles seeking more than USD 1 million for alleged breach of contract. The complainant, Francis Racioppi, is a U.S. Army Special Forces veteran.

Source : Strategic Research Institute
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CIL CCL Coal Offtake in April Dips 55%

Coal India subsidiary Central Coalfields Limited has registered the drop in offtake to customers with the offtake falling by 55 per cent in April, making CCL one of the worst hit Coal India subsidiaries during lockdown due to the coronavirus outbreak. The company’s offtake for April stood at 2.89 million tonnes as compared to 6.42 million tonnes reported last year in the same corresponding period.

The average drop in total offtake of Coal India including all its subsidiaries was reported to be around 25.5 per cent, which is almost half the drop in offtake registered by CCL. The overall coal production by Coal India registered a drop of around 11 per cent, whereas the production of CCL declined by 29.2 per cent.

Source : Strategic Research Institute
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CIL WCL Relaxes Coal E-Auction Term

In a bid to extend help and support to its consumers during the present crisis of COVID-19, Coal India Ltd subsidiary Western Coalfields Ltd has offered flexible route of spot e-auction of Coal till May 20. This will not only help in providing immediate financial relief to the consumers but will also give them opportunity to plan their post-lockdown coal requirement. WCL has offered special spot e-auction of coal for a validity period of 3 months. With this flexible offer, consumers will have option to book the quantity in advance and can make payment and lift coal as per their requirement during next 3 months.

Earlier, the floor price of coal for auction was fixed adding 30 p-er cent over notified price for some specific mines and 40 per cent in case of other mines. Now, all auctions are being done at notified price which is giving substantial financial relief to consumers. The successful bidder and the coal company shall have the option of mutually deciding the Monthly lifting schedule. The Successful bidder would be required to make the payment for Monthly Schedule quantity by the last day of the preceding month.

Participants will have the option of submission of EMD in the form of Bank Guarantee also.

Source : Strategic Research Institute
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China Mobile & Huawei Implement 5G in Yangquan Coal Mine

China's largest hard coal producer Yangquan Coal Industry (Group) Co Ltd in Shanxi Province has finished building a 5G network in one of its mines, heralding the coming of 5G era of the country's cold industry and paving way for intelligent mining based on 5G technologies. The 5G network in Yangquan's subsidiary Xinyuan is first commercial 5G service under a coal mine shaft. It is built in partnership with China Mobile and Huawei. With the integrated 5G coverage, the data upload rate is above 800Mbps and the transmission latency is less than 20 milliseconds in the mine, enabling a variety of applications such as high-definition audio and video communications and remote intelligent control of equipment to free workers from the dangerous working environment,

With the 5G network in operation, the mine is expected to reduce its labor force in one underground working team from more than 170 to about 90 while maintaining the coal output

Yangquan Coal Industry Group is not alone in embracing the new technology. China's traditional coal mine companies are increasingly merging onto the 5G expressway. Yankuang Group, a mining conglomerate in eastern China's Shandong Province, has set up a joint lab with China Unicom and Chinese telecom equipment maker ZTE to develop 5G and intelligent mining in areas including intelligent transportation and drone patrol. Kailuan Group in northern China's Hebei Province has clinched a deal with China Telecom on 5G technology application development, while Shanxi Coking Coal Group has signed with the Shanxi branch of China Unicom on leasing 5G facilities.

Source : Strategic Research Institute
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Polish Coal Producer PGG Trade Unions Agree for Reduced Pay

Reuters reported that trade unions at Poland's biggest coal producer state-run PGG have agreed to the company reducing hours and pay by 20% in May, which would make PGG eligible for government help. The group's management and trade unions have been in talks for weeks, as unions rejected the company's initial proposal to cut salaries and working hours by 20% for three months. They eventually agreed for lower pay in May only and the deal also assumes that by June 20 management will present the unions with a plan of how it sees the group operating in the remaining part of this year.

Poland generates most of its electricity from coal but demand for power has slumped due to the new coronavirus epidemic and more of it is being generated from cleaner sources. PGG is also struggling with the rapid spread of coronavirus cases among its miners.

Source : Strategic Research Institute
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UMWA Supports CFMEU Investigation of Queensland Mine Ignition

United Mine Workers of America International President Cecil E Roberts said “The reports of an ignition along the longwall face at the Grosvenor mine in Queensland, Australia are very troubling. The hearts and prayers of the entire UMWA family are with the miners who were injured in the blast and their families. We sincerely wish them a full recovery. This incident is under investigation by Australian authorities and the Mining and Energy Division of the CFMEU, the Australian miners’ union. I have full confidence that the expertise the CFMEU brings to this investigation will reveal the real cause of this ignition and that they will take action to ensure something like this does not happen again. Coal miners put their lives on the line every day so that people all over the world can have energy and the raw materials needed to make steel. Many thousands who toil in places where there are no safety laws or where those laws are not enforced lose their lives every year. That is a true tragedy that few even know about.”

“But in places like the United States, Canada, Australia and Europe, unions work to ensure that our members are as safe and healthy as possible on the job. And when incidents like this occur, we leave no stone unturned to find out what happened so that we can keep it from happening again. Every law, every regulation dealing with mine safety is written in the blood of dead and injured coal miners. We must ensure that their blood was not spilled in vain.”

Source : Strategic Research Institute
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NTEC Spring Creek Coal Mine Operating on Temporary Permit

Navajo Transitional Energy Company, which is owned by the Navajo Nation, became the third-largest coal company in the US with the acquisition of Spring Creek and two mines in Wyoming from the bankrupt Cloud Peak Energy. But a complicated ownership structure that might allow NTEC to claim sovereign immunity and disregard environmental laws has created problems working with state governments.

On NTEC’s first day of ownership, Spring Creek had to cease operations because of a permitting impasse. Since then, NTEC has been operating the mine under a temporary permit that was designed to last 75 days. Though the state and NTEC agreed on a limited waiver of sovereign immunity in March, the mines are still technically permitted to Cloud Peak, said Rebecca Harbage, public policy director at the Montana Department of Environmental Quality.

Source : Strategic Research Institute
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