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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (36608)	5/6/2009 9:49:58 AM
From: LoneClone	Read Replies (1) \| Respond to of 195618

A Week In The Life Of The Coal Industry, In The UK And Around The World By Sally White minesite.com Coal got a boost in the UK last week. The government announced plans for a new generation of coal-fired power stations, with the proviso that they must capture and bury at least 25 per cent of greenhouse gases immediately, and 100 percent by 2025. Energy and Climate Change Secretary David Milliband told the House of Commons that, although coal was a “polluting fuel”, it was such a low cost and flexible source of power that it had to be a part of Britain’s energy mix. The government will direct the building of four energy "clusters", which will generate a total of 2.5GW of electricity, on the east coast of Britain. Each cluster will have at least one major new coal-fired power station able to collect carbon emissions and transport them out to sea, where they will be buried in redundant oil or gas fields. The new power stations, the first to be built in over 30 years, are not expected to come on stream until 2015. The government envisages oil and coal companies collaborating to reduce emissions from coal-powered electricity generation by up to 60 per cent by 2025. Demanding carbon capture and storage (CCS) from all new coal plants is expected to cost around £1billion for each plant, and increase energy bills. Government and energy companies are in talks over how these will be funded, but it is expected to come from a levy on all fossil fuel electricity generation in Britain. This could put two per cent, or roughly £8 per household a year, on a consumer's electricity bills by 2020. Other funding alternatives being considered are to pay the energy companies according to how much carbon they store underground. UK Coal’s share price responded by rising 10p, closing the week at 106.5p against the 12-month range of 56-164p. Another British coal miner, Hargreaves Services, saw its share price rise 13p to 463p. In February Hargreaves announced an 85 per cent rise in interim pre-tax profits to £12.2 million and said it was considering a move to the main market from Aim. Meanwhile, the US coal miners have started to report first quarter figures. While these may look good, the recent 25 per cent fall in US prices to below production costs, combined with continuing weak demand and a supply glut are clouding sector prospects for much of this year. Producers are not signing supply contracts for 2010 because they are hoping for a price recovery by year-end. A Reuters Estimates US survey showed the market expects all major coal producers to report lower profits in 2009 as compared to last year. “While 2009 demand numbers are not pretty, supply cuts are the key to an eventual pricing rebound”, wrote Jeremy Sussman of Nataxis Bleichroeder in an industry report. US electricity demand is down two per cent, and coal demand down 2.9 per cent, he noted. Cuts so far this year had been “meaningful enough for us to project a supply shortfall again before the end of 2010,” he said. Benefitting from a larger number of long-term contracts than other producers, Peabody Energy led off the results season, reporting sales up 15 per cent at US$1.46 billion and an 80 per cent rising in income at US$140.6 million. With a cash balance of US$527 million the group says it is looking to make acquisitions among weaker coal producers. However, it is cutting production and inventories. Coal prices in China rose last week and stocks dropped. Elsewhere, in Australia, Coal & Allied Industries chairman Chris Renwick said it had agreed last month to cut contract prices to Japanese utilities to between US$70 and US$72 a tonne against the US$125 charged last year. However, he forecast that demand for thermal coal would “pick up in the H2.”