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Anglo American Plans to Quit Thermal Coal

Anglo American recently announced that it will divest from its South African and Colombian thermal coal operations by mid 2023. Anglo American Chief Executive Mr Mark Cutifani in an annual update to investors said “The company plans to exit its Cerrejon thermal coal mine in Colombia within 1 1/2 to 2 years, while the South African thermal coal exit will happen within 2 1/2 years.”

He added “With the bulk of growth options in copper, PGMs, and now also crop nutrients, we are increasingly positioned to supply those metals and minerals that enable a cleaner, greener, more sustainable world. Production across all minerals will increase by 14% in 2021 and unit costs are expected to fall by 3%. Capital expenditure would be between USD 5.7 billion and USD 6.2 billion next year, reflecting deferred 2020 spending and new investments.”

Source - Strategic Research Institute
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Open Pit Coal Mining Plans Opposed in Alberta in Canada

People’s Voice reported that since 1976 Alberta’s Coal Development Policy has guided land use over many aspects of coal development, including open pit coal mining and coal exploration in some of Alberta’s most environmentally sensitive areas. This policy was developed with extensive public consultation, to create a fair balance between environmental protection, economic development, and the social needs of all Albertans. But on June 5, Jason Kenney’s United Conservative government rescinded the Coal Development Policy. Recent documents show that at least seven months before announcing the cancellation, the provincial Minister of Environment and the Minister of Economic Development, Tourism, and Trade held conversations with coal companies that supported development in these sensitive areas. The lack of public consultation in parks and lands use runs counter to the UCP election commitments to increase consultation in parks and land use decisions and to increase tourism in Alberta.

The area involved provides water for downstream communities, which also flows into Saskatchewan and Manitoba. It provides habitat for species at risk including bull and cutthroat trout, grizzly bear, bighorn sheep, and mountain goat. It is a high-value recreation area and supports local communities and economies, including ranching and agriculture. Kate Morrison from Canadian Parks and Wilderness Society gave a description of what this open-pit mining entails, in a webinar organized with the Council of Canadians. Trees will be clear cut and explosives and massive machinery will be used to remove earth so that coal seams can be accessed from the top down. Mining waste, or spoil, will be dumped into valleys. The resulting landscape changes, such as mountain top removal and mining and valley fills, increase the risk of flash flooding, Native species are slow to recolonize the reclaimed land and planted trees may perform poorly in the compromised soil.

One of the major impacts is decreased water quantity and quality. Southern Alberta is already a dry region that has drought years, and it is unclear how water will be allocated. A number of toxic chemicals are involved in the mining process, but perhaps most concerning is the release of selenium which can cause reproductive failure in fish and elk. These effects have already been observed in British Columbia, near Teck corporation’s Elk Valley coal mining operations. Municipal water supplies near the site have already been contaminated.

The UCP’s whole approach to this issue has sneaky and aggressive. For example, of the 164 provincial parks the government delisted from protective status during the summer, sixty are in areas slated for coal mining. In another example, the government announced $120 million to the David Thompson highway for a twinning project [constructing a parallel road], which Sakela and others believe will actually be a regional support road for mining exploitation.

Another issue is how the Kenney government is streamlining approvals. The Alberta Energy Regulator is completely funded and operated by industry and is able to receive and approve an application in one day. This makes it enormously difficult for opponents to file an objection, especially average people who may not know how to do so.

Source - Strategic Research Institute
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Mahagenco Coal Mine in Chhattisgarh Gets Environmental Clearance

The Mahanirmiti or Mahagenco, formerly known as MSEB in the state of Maharashtra, has finally got environmental clearance from the ministry of environment, forests and climate change for its captive coal mine in Chhattisgarh. The mine, Gare Palma II, will supply coal to Koradi, Chandrapur and Parli power plants. Mahagenco director mining Mr Purushottam Jadhav told TOI “We now have to acquire land and get forest clearance. Since we are acquiring forest land, we will have buy and transfer equivalent land to forest department. All these processes would be done through Raigarh collector. This will take some time and we plan to start mining by March 2023.”

Mahagenco had appointed Adani Group as the mine developer and operator and Maharashtra Electricity Regulatory Commission had granted approval for a coal mining agreement with it. The company is expected to launch production of 23.60 million tonne per annum from March 2023, which will increase to 29 million tonne per annum from the seventh year onwards.

Coal ministry had allocated the block, located in Raigarh district, spread across 2,583.486 hectare with geological reserves of 1,059.761 million tonne in August 2016 to Mahagenco.

Source - Strategic Research Institute
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Indonesia Targeting 550 Million Tonne Coal in 2021

Indonesia’s Energy Ministry’s director of coal Mr Sujatmiko said “We hope at the end of the year it will be close to our 550 million tonnes target. The energy ministry is targeting next year’s output at 550 million tonnes, unchanged from 2020’s target.”

Indonesian coal output till December 10 2020 stood at 514.2 million tonnes and coal sales stood at 472.33 million tonnes.

Source - Strategic Research Institute
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Czech Republic to Phase Out Coal by 2038

Czech media reported that according to a decision by the government’s coal commission in Prague, Czech Republic is to withdraw from coal mining by 2038. The coal commission was set up in July 2019 and includes representatives from ministries, parliament, industry, business, the regions and environmental associations.

Environmentalists had called for an earlier departure from fossil fuels, and doctors issued a petition warning of the consequences of ongoing air pollution from coal-fired power plants. Last year, 49 per cent of electricity produced in the Czech Republic was generated by coal. The coal is to be replaced by renewable energy sources as well as by existing and new nuclear reactors.

Source - Strategic Research Institute
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Singareni Collieries Coal Mine Expansion in Crocodile Sanctuary

Hyderabad head quartered Singareni Collieries Company Limited has embarked on a massive expansion of its coal mining operations and has sought No Objection Certificate from the Telangana State Board of Wild Life and National Board of Wild Life, for over 3,296.47 hectares, of which as much as 372.53 hectares are reserve forests. The entire area of 3,296.47 hectares, including the reserved forests fall under the Eco-Sensitive Zone of the Siwaram Crocodile Sanctuary, which has around 60 crocodiles and is located 6.07 kilometers from the sanctuary. This area comes mostly under Peddapalli and partly in Mancherial district.

According to the documents submitted by SCCL seeking clearance from wildlife boards, the SCCL wants to amalgamate 11 of its coal mines in the Ramagundam area of Peddapalli district, in order to pump up the amount of coal being mined from there, from the present capacity of 34.54 million tonnes per year.

However, to execute this plan, SCCL requires environment clearance and for this the NOC from Telangana SBWL and NBWL is essential. The SCCL also furnished information that drilling of 323 boreholes in forest land and 887 boreholes, both of four inches each, in non-forest land would be required for prospecting of the mineral.

In its justification for wildlife clearance over such a large area, the SCCL has said that it was the only coal producing company in South India and had been meeting a large part of the demand for coal in this region. It also said that to satisfy the ever-increasing demand for coal and to meet the targets set by the Ministry of Coal, it was embarking on large-scale expansion. It also said that coal mining was site specific in nature and alternatives as such were not considered.

Source - Strategic Research Institute
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CIL Coal Production in Oct-Dec Quarter Recovers

State owned Coal India Ltd said that CIL output stood at 156.8 million tonnes in October-December 2020, a 6.3% jump as compared with 147.5 million tonnes in the year-ago period. The quarter-on-quarter output increase was a whopping 41.8 million tonnes, clocking a robust growth of 36.4 percent. CIL produced 115 million tonnes of coal in July-September quarter.

CIL supply of coal to the consuming sectors rose 9.2% to 154.6 million tonnes in October December 2020 quarter of the current financial year. The company had supplied 141.6 million tonnes of coal in the corresponding quarter of the previous financial year. CIL's offtake to the power sector was 117.8 million tonnes in October-December 2020, against 116.07 million tonnes in the year-ago period. CIL supplied 36.62 million tonnes to non-power consumers in the October-December 2020 period, compared with 25.53 million tonnes a year ago.

The company's over burden removal clocked a healthy growth of 17.6% at 366.23 million cubic metres in the third quarter of 2020-21, clearing the way for easier future production. OBR was 311.52 million cubic metres for the comparable quarter last fiscal.

Source - Strategic Research Institute
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JSPL Bags Gare Palma Coal Block in Chhattisgarh

Jindal Steel and Power Ltd announced that the coal ministry has declared Jindal Power as the successful bidder for Gare Palma IV/1 Coal Mine in Chhattisgarh. Jindal Power Ltd won the auction 25% bid premium of the representative price.

The Jindal Group emerging the top bidder for the Gare-Palma-IV/1 mine comes a year after Jindal Steel and Power Ltd bid the highest for it in the November 2019 coal mine auctions. But despite the highest bid during auctions, the Centre had not awarded the mine to JSPL, saying that the bid price was too low and eventually the coal mine went back to Coal India.

Source - Strategic Research Institute
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SCCL Unlikely to Meet 2020-21 Coal Production Targets

The impact of COVID on the coal business of Singareni Collieries Company Ltd is likely to be much deeper than expected this financial year, although coal production has crossed the five million tonne mark in a month for the first time in December. Production of coal in the first nine months of the fiscal remains over 30% less compared to the last financial year and it’s 33% less against the target set by the company for 2020-21. In the backdrop of economic and industrial activity coming back to near normalcy, the company management had planned to produce 6.2 million tonnes of coal in December. However, the production achieved during the month was 5.72 million tonnes. Realising the fact that even meeting the last year’s production of 64.02 million tonnes is not possible practically as the production in the first three quarters of the fiscal is only 32.66 million tonnes, the company has decided to make the most of the remainder of the financial year so that business loss is controlled as much as possible.

In dispatches of coal to customers too, the company is lagging behind its plans and targets with over 31.4% lower achievement in the nine months of this fiscal compared to the same period last year. For December, the company had plans to send 5.73 million tonnes to its customers but could go up to 5.27 million tonnes itself, mainly due to low off take from the customers.

Source - Strategic Research Institute
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West Bengal CM Upbeat on Deocha Pachami Coal Block Potential

West Bengal Chief Minister Ms Mamata Banerjee said that at least one lakh jobs will be created once the Deocha Pachami coal block in Birbhum district operationalizes. Expressing hope that the coal extracted will be sufficient to generate electricity for 100 years Ms Banerjee said “On people fearing that they will lose their lands due to the project. As of now, the area earmarked for the coal block is uninhabited and nobody owns any land there, so there is no problem. One lakh jobs will be created which will solve the problem of unemployment."

The world’s second largest coal block, with an estimated reserve of 2.1 billion tonnes, was allocated to West Bengal by the Centre in June, 2018. The coal block has the potential to bring in investments to the tune of INR 12,000 crore over a period of time. Spread over 9.7 square kilometer, the block is located in the south western part of Birbhum.

Source - Strategic Research Institute
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EVRAZ Completes Coal Businesses Consolidation under Raspadskaya

Further to EVRAZ's announcement on 13 November 2020 and Raspadskaya's EGM held on 18 December 2020, the company announced that the transfer of all shares in AO UCC Yuzhkuzbassugol to Raspadskaya was completed on 30 December 2020.

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, the USA, Canada, the Czech Republic and Kazakhstan. EVRAZ is among the top steel producers in the world. A significant portion of the ?ompany's internal consumption of iron ore and coking coal is covered by its mining operations. EVRAZ is listed on the London Stock Exchange and is a constituent of the FTSE 100 index.

Source - Strategic Research Institute
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L&T Bags Coal Processing Plants Orders

The Metallurgical & Material Handling business of L&T Construction has secured EPC orders of Coal Processing Plants in the domestic market and a prestigious Engineering & Procurement Project for a Metallurgical Plant overseas.

These orders reflect MMH prowess in executing complex metallurgical plants and a recognition of their capability in overseas geographies.

The business has also secured new orders from its various customers for products and an add on order from its existing customer.

Source - Strategic Research Institute
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Vedanta Bags Radhikapur West Coal Block in Odisha

Vedanta has emerged as the highest bidder for the Radhikapur West coal block, located in Angul district in Odisha. Vedanta said, "The coal block is an optimal fit for the Jharsuguda smelter given its logistical location and annual capacity."

The block is at a distance of about 190 km from the Company’s Jharsuguda Aluminium Smelter. The mine has total reserves of 312 million tonnes and an approved per annum extraction capacity of 6 million tonnes. Once operational, it will provide fuel security, improve power availability and further strengthen the Company’s Aluminium and Power operations and performance."

Source - Strategic Research Institute
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Coal Ministry to Acquire Forest Land for Mining in Korba

Hindustan Times reported that India’s coal ministry has issued a notification on its intention to acquire 712.072 hectares and all rights over the land for mining coal in Madanpur South coal block in Korba district of Chhattisgarh, whose government has been considering declaring the rich forest area an elephant reserve. According to the notification published on December 24, 489.274 hectares is protected forest land and 159.327 hectares comprises revenue and other forest land.

The intention to acquire the land has been notified under provisions of the Coal Bearing Areas (Acquisition and Development) Act. The law says that if the central government is satisfied that coal is obtainable from a tract of land, it can give notice of its intention to acquire it. But diversion of the forest land for non-forest use hasn’t taken place yet because the Chhattisgarh government was considering declaring it an elephant reserve.

Environmental activists and legal researchers have raised several concerns with the intention to acquire large biodiversity rich forest land located in the Hasdeo Arand region, one of the largest contiguous stretches of very dense forests in central India spanning 170,000 hectares which has 22 coal blocks underneath.

Source - Strategic Research Institute
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CIL Investing in Ramping Up Rail Evacuation Facilities

Coal India Limited is constructing 21 additional greenfield and brownfield railway sidings at an estimated investment of INR 3,370 crore in four of its subsidiaries. CIL currently has around 152 rail sidings and the tally would go up to 173 by 2024 adding that the project would be commissioned by 2023-24. The investment by CIL is done to increase impetus on rail evacuation gradually migrating away from the road movement of the dry fuel. Reduced road transportation of coal would depress the dust pollution and save on the diesel costs. The sidings will add fillip to CIL’s First Mile Connectivity efforts, acting as effective coal evacuation outlets. The dovetailing of existing and new rail sidings with rapid loading system silos of FMC projects will help improve loading quantity in future when production expands

CIL is aspiring for 1 Billion Tonne output by 2023-24 as part of a larger effort to transport the bulk of the coal through rail mode.

Source - Strategic Research Institute
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NTPC Dulanga Coal Mine Commercially Operational

State owned power giant NTPC said that its Dulanga coal mine is commercially operational from October 1, 2020. NTPC said “Based on achievement of approved norms and due approval; Dulanga Coal Mine in Odisha of NTPC Limited, having an ultimate peak rated annual capacity of 7 Million Tonnes Per Annum, is declared commercial operation from October 1, 2020.”

The central government has allocated nine coal blocks Pakri-Barwadih, Chatti-Bariatu & Chatti- Bariatu (South), Kerandari, Dulanga, Talaipalli, Banai, Bhalumuda, Mandakini-B and Badam directly to NTPC. Out of 10 blocks, three mines, Parkin-Barwadih, Dulanga and Talaipalli are in operation and about 27.2 million tonne of coal has been produced from these mines till November 2020. Two mines Chatti-Bariatu and Kerandari are in advance stage of development. NTPC is planning to produce about 103 million tonnes of coal per annum from these mines when all the mines reach the peak-rated capacity.

Source - Strategic Research Institute
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CONSOL Energy & CONSOL Coal Complete Merger

CONSOL Energy Inc and CONSOL Coal Resources LP announced that, at a special meeting held on December 29, 2020, the shareholders of CEIX approved the issuance of shares of CEIX's common stock in connection with the previously announced merger of a wholly owned subsidiary of CEIX with and into CCR pursuant to which CCR would survive as an indirect, wholly owned subsidiary of CEIX. More than 99% of the total votes cast in person or by proxy at CEIX's special meeting were voted in favor of approving the CEIX stock issuance.

In addition, CCR's limited partners approved the Merger and the adoption of the merger agreement relating to the Merger. The holders of more than 83% of CCR's outstanding limited partner interests approved the Merger and the adoption of the merger agreement related thereto via written consent.

Following the approval of the CEIX Stock Issuance by the CEIX stockholders and the approval of the Merger and the adoption of the merger agreement related thereto by the CCR limited partners, CEIX completed the acquisition of all of the outstanding common units of CCR that it did not already own. As a result of the transaction, CCR Common Units have been suspended from trading on the New York Stock Exchange.

Source - Strategic Research Institute
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Sarda Energy Bags Gare Palma 6 and 7 Coal Blocks

Sarda Energy has bagged two coal mines, Gare Palma 6 and 7 Coal Mine in Chhattisgarh and Sahapur West Coal Mine in Madhya Pradesh. The win will provide security with cost savings of approximately 15%. Mr Manish Sarda, said “It is a long term raw material security for the company that is a major advantage where you are not subject to fluctuations and volatility of the coal market. Secondly, we will be saving significantly in terms of costings. Not to put an exact number right now, but definitely in the range of 15-20% cost saving will be there. We will be using the coal captively and there is a benefit of cess.”

He said that they can ramp up production up to 1.8 million tonne and expecting to kick start the mines in 12-15 months.

On margins, Sarda said, “We are running 100 percent on capacity and if you look at the ground demand also, domestically the ground demand has also been quite strong. With the infrastructure projects back on track with lockdowns getting opened up, everything is back on track. So we are seeing a lot of demand on ground as well. So, I think margins should remain stable or be a little bit here and there but not majorly varying from the last numbers.”

Source - Strategic Research Institute
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Shanxi Closes 163 Coal Mines in Five Years

Shanxi, a major coal-producing region in north China, has shut down 163 coal mines and eliminated 146.05 million tonnes of annual coal production capacity over the past five years. The province closed 57 coal mines and cut 30.19 million tonnes of coal production capacity in 2020. The number of closures hit a record high since Shanxi started cutting out dated coal capacity in 2016. The province reduced 115.86 million tonnes of excess coal capacity from 2016 to 2019, one year ahead of its schedule for meeting the target of cutting 113.8 million tonnes during the 13th five-year plan period (2016-2020). The reduction amount was the largest among all provincial-level regions.

The province, however, developed advanced production capacity to ensure coal supply. In the first 11 months of this year, its raw coal production reached 962 million tonnes, compared to 816 million tonnes for the whole of 2016.

Source - Strategic Research Institute
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Sind Extends Sales Tax Exemption for Coal in Thar in Pakistan

The Sindh government has granted five years sales tax exemption on services to coal mining companies and coal based power generation companies located within the Thar coal field in Pakistan. The Sindh Revenue Board issued a notification dated December 30, 2020 to allow the exemption from sales tax on services to such companies until June 30, 2025. According to the SRB, the exemption would be available only during the construction phase of the project of coal-mining development and coal-based electricity generation of the companies located in the Thar coal field region.

The exemption was available earlier too, but had expired on June 30, 2020. Therefore, the Sindh government restored the exemption from the day following the expiry date.

The provincial revenue authority further said that the benefits of the incentive would not be available before the financial close of the project, and would also not be available after June 30, 2025 or after the construction phase of the project was completed or after the commencement of commercial mining / supply of the coal or the commercial generation of coal-based electricity.

Source - Strategic Research Institute
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