Gregory Boyce – chairman and CEO of Peabody Energy, the world’s largest coal company – has been saying some disturbing things to his investors. A recent Manhattan meeting was described in a press release:
Boyce observed that coal has been the world’s fastest-growing fuel this past decade, with demand growing at nearly twice the rate of natural gas and hydro power and more than four times faster than global oil consumption. “It’s stunning that any mature commodity could expand nearly 50 percent in a decade and speaks to the strong appetite for the products we fuel, as well as coal’s abundance and stable cost,†he said. Coal demand is also expected to grow faster than other fuels in coming decades.
Asia-Pacific nations are leading a historic global build-out in coal-fueled electricity generation. More than 94 gigawatts of new generation are expected to come on line in 2010, representing 375 million tonnes of coal consumption per year. If growth continues at the current pace, generators would add another 1 billion tonnes of new coal demand every three years.
For the sake of the natural world and future generations of humans, it is imperative that those projections prove to be badly off, and quickly. The world contains a very dangerous amount of coal, and burning it all is not compatible with maintaining a habitable planet for those who will come after.
It is for their sake that taking on powerful actors like Peabody Energy has become so necessary and important.
“In China, India and other developing countries, coal remains king: a cheap, abundant, domestic source of energy, central to their modernization efforts. Neither emerging giant will remotely commit to absolute reduction targets for their greenhouse-gas emissions, just improvements in the intensity of energy use, the same approach favoured by Alberta in Canada. It’s an approach guaranteed to produce more emissions, but at a slower rate of increase than if nothing had been done.”
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Canadian coal stocks fired up as demand outstrips supply
If you want to know how the Canadian coal mining business is doing, just ask someone in Tumbler Ridge.
A decade ago, people were predicting that the northeastern British Columbia community would soon become a mining ghost town – a victim of a dying coal industry. But now, with the coal mines humming and global appetite for Canadian coal surging, talk is not of how the town will survive, but how quickly it will grow.
“I wouldn’t call it a boomtown environment, but it’s a healthy environment where there’s a lot of good, solid long-term investment coming in,†said Keith Calder, president and chief executive officer of fast-growing Western Coal, the main coal producer in the Tumbler Ridge area. “Morale is high. People are very positive – because what they’re building is something that’s a lot more permanent than what they saw in the past.â€
South Korea to cut coal imports
Clancy Yeates IN SOUTH KOREA
November 4, 2010
THE second-biggest importer of Australian coal, South Korea, is set to cut its demand because of climate-change policies.
Although there is no global agreement on climate change, South Korea is pursuing an ambitious plan to wean itself off fossil fuels and sharply boost green investment.
The ”green growth” strategy, to feature at the G20 leaders’ summit in Seoul next week, is intended to offer a blueprint for emerging economies wanting to cut carbon emissions without harming their economies.
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A senior official from the Presidential Committee on Green Growth, Yeon-chul Yoo, said Seoul’s move towards cleaner energy sources would lead to a gradual decline in its imports of coal and other fossil fuels in coming decades.
”The portion of fossil fuels [in South Korea’s energy mix] will decrease from 40 per cent in 2008 to 30 per cent in 2030. It will take time,” Mr Yoo said at a foreign investment conference this week.
Although gradual, the move is significant for Australia because South Korea is the second-largest export destination for thermal coal, with Seoul buying 16 per cent of shipments from Newcastle in the year to October. This could represent a sign of things to come – Seoul’s key customers, China and Japan, are also eyeing cleaner energy sources, though it is unclear how this will affect their demand for coal.
U.S. coal firm makes $3.3-billion bid for B.C.’s Western
Vancouver Sun, Nov. 19
Florida’s Walter Energy likes company’s assets and access to transportation
A Florida company’s $3.3-billion offer for Vancouver’s Western Coal looks at first glance to be good news for British Columbia’s mining, port and transportation sectors.
Tampa-based Walter Energy and Western announced the offer Thursday: $11.50 in cash and stock per Western share, which was a 59-per-cent premium over Western’s 20-day average price on the Toronto Stock Exchange.
Walter also announced a purchase of U.K.-based Audley Capital’s 19.8-per-cent stake in Western.
Shares of Western Coal jumped from a $6.99 close on Wednesday to $10.85 — a 47-per-cent boost — by the end of trading Thursday in Toronto.
Western said in a news release that it “has agreed to work exclusively with Walter for a period of up to 14 days expiring Dec. 1, 2010.”
The deal would be subject to approval by Western shareholders and regulatory authorities.