THIS MONTH IN COAL: U.S. Passes Massive Energy Bill

Five years in the making, U.S. President George W. Bush finally signed the Energy Policy Act of 2005 into law during August. The bill has an estimated cost of $12.3 billion over 10 years. Approximately $6.1 billion were authorized for coal-related projects. An additional $2.9 billion were directed at coal projects in the tax portion of the bill.

The Energy Bill runs the gamut. It covers energy efficiency, all fuel sources (renewables, oil and gas, nuclear, coal, etc.). The bill also addresses vehicles and associated fuels, including hydrogen for fuel cells and ethanol. It also addresses issues with a separate R&D provision for most of resources, Energy Department management, and personnel and training. The bill also covers electricity generation, transmission and distribution. It offers tax incentives to get many of these technologies rolling.

The Energy Bill represents some big opportunities for the coal industry. Advanced clean coal technologies will get a big boost, from an increase in R&D funds, to demonstration through the Clean Coal Power Initiative, to commercialization through both authorization included in the Clean Air Program and tax incentives provided in the tax portion of the bill. Coal leasing amendments will maximize recovery of coal on federal lands, protect lease tenure, and eliminate redundant bonding requirements. From an environmental standpoint, a climate change title essentially codifies the voluntary, technology-based approach pursued by the coal industry.

India's Tata Steel to Import Coal

Tata Steel, intent on raising its capacity from 4 million metric ton (mt) a year now to 15 million mt by 2010, has a daunting challenge to meet: securing uninterruptible supply of a key raw material-coal. For producing 15 million mt of steel, Tata Steel will need about 11 million mt of coal, with at least 7 million mt of coal sourced from outside the country. During July, the company signed an agreement to buy a 5% interest in the Carborough Downs Coal Project located in Queensland, Australia. The agreement gives Tata Steel rights to buy 20% of the production from the project.

Italiana Coke Gets Green Light

Italiana Coke recently announced its plans to upgrade its European facilities with a euro35 million investment. "Through these investments and the implementation of the actions defined by the plan for the next three years," said Antonio Barone, the company's president and managing director, "Italiana Coke aims to reach a highly competitive level in terms of organization and technology, as well as to improve its performance regarding compliance with stricter environmental protection regulations." The investment plan covers uninterrupted production activities, environmental issues, health and safety issues, plant and equipment revamping and upgrading, and production process automation and monitoring.

Russians Build New Coal Terminal

After years of stagnation due to an absence of financing, the project to build a new cargo port in Ust-Luga, 150 km west of St. Petersburg, has come back to life, according to The New Europe. The first coal terminal with a 4 million metric ton (mt) annual capacity is scheduled to start operations later this year. With assistance from the federal reserves, the company completed the transport infrastructure, including a railway link to connect the port with the St. Petersburg-Tallinn rail route, and power generating facilities that will guarantee a stable business for the harbor.

China's Coke Industry May Face Surplus Situation

With the impact of both the macro-control move and the new policies on iron and steel industry of the Chinese government, according to Xinhua Online, China's coke industry is at a crossroads facing both challenges and opportunities. At the First China Coke International Market Seminar, Hua Zugui, chairman and CEO, China Coal and Coke Holding Ltd., said after experiencing prosperity for three years, China's coke industry now has to confront severe realities including surplus coke capacities, tight coking coal supply and declining profits. In 2005, China's total coke demand is expected to be 220 million mt, while the current coke output capacity is about 260 million mt with a surplus rate of 18%. As 110 million mt are produced by coke plants affiliated to integrated steel mills and have no problem of surplus, the other 150 million mt capacity of independent coke enterprise will have only 110 million mt of demand, thus raising the surplus rate to 36%.

Adobe Ventures in Negotiations to Acquire Coal Assets

Adobe Ventures Inc. recently announced that it is in advanced discussions for the acquisition of three coal properties and a port-loading facility in South America. Of the three properties, two are located in the Caesar region of Colombia, one of which is a producing mine. The other property is located in the Tachira region of Venezuela and is also a producing mine. The company cautions that no agreements are currently in place but further details will be provided when it completes successful negotiations or abandons discussions for these assets.

Copyright Mining Media Sep 2005
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