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Coal - where to now?

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Are the chinese likely to close their coal mines again following this disaster they have in the past if they do so again the price of the black lumpy stuff should go up again


China coal mine blast death toll jumps to 87


HEGANG, China – Rescuers worked in frigid cold to reach 21 miners trapped underground Sunday as the death toll from a huge gas explosion in a northern Chinese mine jumped to 87 ”” the deadliest blast to hit the beleaguered industry in nearly two years.

The pre-dawn blast Saturday at the state-run Xinxing mine in Heilongjiang (pronounced HAY-long-jeeahng) province near the border with Russia was the latest to hit China's mining industry ”” the world's deadliest. Authorities say safety was improving, but hundreds still die in major accidents each year.

The death toll more than doubled overnight, reported the official Xinhua News Agency. A duty officer at Xinxing's work safety authority and an employee at the company that owns the mine confirmed 87 had died.

Ventilation and power were restored in the mine, said the employee, who refused to give his name because he was not authorized to speak to the media. The mine's director, deputy director and chief engineer were fired Saturday, he said.

A total of 528 people were working in the Xinxing (pronounced shin-shing) mine at the time of the 2:30 a.m. explosion Saturday, the State Administration of Work Safety said in a statement. Xinhua reported 420 escaped.

Television footage showed smoke billowing out of the mine after the blast that resulted from a gas build-up. The explosion caused a nearby building to collapse.

State-run CCTV displayed a diagram showing the miners trapped about a third of a mile (half a kilometer) underground. Footage showed one entrance was blocked, and rescuers in orange suits with breathing equipment attempted to enter through another.

Overnight temperatures dropped as low as 14 degrees Fahrenheit (minus 10 degrees Celsius), according to the Central Meteorological Station.

Wang Xingang, one of those rescued, recounted how the blast briefly knocked him out.

"When I regained consciousness, I groped my way out in the dark and called for help," Xinhua quoted the 27-year-old electrician as saying.

Xinxing is located near the border with Russia. Large state-owned coal mines, such as Xinxing, are generally considered safer than smaller, private ones that account for the bulk of production. Saturday's blast underscores the difficulties the government faces in trying to boost safety while maintaining output.

Coal is vital to the vast population and booming economy, as China uses it to generate about three-quarters of its electricity.

The government has cracked down on unregulated mining operations, which account for almost 80 percent of the country's 16,000 mines. It says the closure of about 1,000 dangerous small mines last year has helped it cut fatalities.

Yet major accidents persist. In the first nine months of this year, China's coal mines had 11 such incidents with 303 deaths. Gas explosions were the leading cause, the government said.

A blast at the Tunlan coal mine in northern China's Shanxi province in February killed 77 people. In December 2007, a gas explosion at another Shanxi coal mine killed 105 people.
 
China may well close very many more smaller mines once they are satisfied Shenua Energy have filled their 10 new storage areas, instigated by PRC, in Fuzhou, Provincial Fujian. This was for around 150 - 200 million tonnes.
 
Noted that UBS Nominees pty. ltd. became substantial share holders in Felix and Centennial. With a proposed emissions trading scheme, I would think the coal industry would be affected negatively.
 
http://www.chinamining.org/News/2009-12-18/1261096339d32445.html

Please note that this information is both factual and prospective. Prospective in regard to future demand and coking coal price increases.
 
Interesting reader submission to the Rockhampton Bulletin regarding Coal fired power and the alternatives.

Worth thought for sure. NOt sure on the veracity of the facts quoted etc however coal is here to stray in my view so thought i would post for consideration and debate.

The Morning Bulletin,

I have sat by for a number of years frustrated at the rubbish being put forth about carbon dioxide emissions, thermal coal fired power stations and renewable energy and the ridiculous Emissions Trading Scheme.

Frustration at the lies told (particularly during the election) about global pollution. Using Power Station cooling towers for an example. The condensation coming from those cooling towers is as pure as that that comes out of any kettle.

Frustration about the so called incorrectly named man made 'carbon emissions' which of course is Carbon Dioxide emissions and what it is supposedly doing to our planet.

Frustration about the lies told about renewable energy and the deliberate distortion of renewable energy and its ability to replace fossil fuel energy generation. And frustration at the ridiculous carbon credit programme which is beyond comprehension.

And further frustration at some members of the public who have not got a clue about thermal Power Stations or Renewable Energy. Quoting ridiculous figures about something they clearly have little or no knowledge of.

First coal fired power stations do NOT send 60 to 70% of the energy up the chimney. The boilers of modern power station are 96% efficient and the exhaust heat is captured by the economisers and re-heaters and heat the air and water before entering the boilers.

The very slight amount exiting the stack is moist as in condensation and CO2. There is virtually no fly ash because this is removed by the precipitants or bagging plant that are 99.98% efficient. The 4% lost is heat through boiler wall convection.

Coal fired Power Stations are highly efficient with very little heat loss and can generate massive amount of energy for our needs. They can generate power at efficiency of less than 10,000 b.t.u. per kilowatt and cost wise that is very low.

The percentage cost of mining and freight is very low. The total cost of fuel is 8% of total generation cost and does NOT constitute a major production cost. As for being laughed out of the country, China is building multitudes of coal fired power stations because they are the most efficient for bulk power generation.

We have, like, the USA, coal fired power stations because we HAVE the raw materials and are VERY fortunate to have them. Believe me no one is laughing at Australia - exactly the reverse, they are very envious of our raw materials and independence.

The major percentage of power in Europe and U.K. is nuclear because they don't have the coal supply for the future.

Yes it would be very nice to have clean, quiet, cheap energy in bulk supply. Everyone agrees that it would be ideal. You don't have to be a genius to work that out. But there is only one problem---It doesn't exist.
Yes - there are wind and solar generators being built all over the world but they only add a small amount to the overall power demand.

The maximum size wind generator is 3 Megawatts, which can rarely be attained on a continuous basis because it requires substantial forces of wind. And for the same reason only generate when there is sufficient wind to drive them. This of course depends where they are located but usually they only run for 45% -65% of the time, mostly well below maximum capacity. They cannot be relied for a 'base load' because they are too variable. And they certainly could not be used for load control.

The peak load demand for electricity in Australia is approximately 50,000 Megawatts and only small part of this comes from the Snowy Hydro Electric System (The ultimate power Generation) because it is only available when water is there from snow melt or rain. And yes they can pump it back but it cost to do that. (Long Story).

Tasmania is very fortunate in that they have mostly hydro electric generation because of their high amounts of snow and rainfall. They also have wind generators (located in the roaring forties) but that is only a small amount of total power generated. Based on a average generating output of 1.5 megawatts (of unreliable power) you would require over 33,300 wind generators.

As for solar power generation much research has been done over the decades and there are two types. Solar thermal generation and Solar Electric generation but in each case they cannot generate large amounts of electricity.
Any clean, cheap energy is obviously welcomed but they would NEVER have the capability of replacing Thermal power generation. So get your heads out of the clouds, do some basic mathematics and look at the facts not going off with the fairies (or some would say the extreme greenies.)

We are all greenies in one form or another and care very much about our planet. The difference is most of us are realistic. Not in some idyllic utopia where everything can be made perfect by standing around holding a banner and being a general pain in the backside.

Here are some facts that will show how ridiculous this financial madness the government is following. Do the simple maths and see for yourselves.
According to the 'believers' the CO2 in air has risen from .034% to .038% in air over the last 50 years.

To put the percentage of Carbon Dioxide in air in a clearer perspective;
If you had a room 12 ft x 12 ft x 7 ft or 3.7 mtrs x 3.7 mtrs x 2.1 mtrs, the area carbon dioxide would occupy in that room would be .25m x .25m x .17m or the size of a large packet of cereal. Australia emits 1 percent of the world's total carbon Dioxide and the government wants to reduce this by twenty percent or reduce emissions by .2 percent of the world's total CO2 emissions.

What effect will this have on existing CO2 levels?
By their own figures they state the CO2 in air has risen from .034% to .038% in 50 years.

Assuming this is correct, the world CO2 has increased in 50 years by .004 percent. Per year that is .004 divided by 50 = .00008 percent. (Getting confusing -but stay with me).

Of that because we only contribute 1% our emissions would cause CO2 to rise .00008 divided by 100 = .0000008 percent.

Of that 1%, we supposedly emit, the governments wants to reduce it by 20% which is 1/5th of .0000008 = .00000016 percent effect per year they would have on the world CO2 emissions based on their own figures.
That would equate to a area in the same room, as the size of a small pin head.

For that they have gone crazy with the ridiculous trading schemes, Solar and roofing installations, Clean coal technology. Renewable energy, etc, etc.
How ridiculous it that?

The cost to the general public and industry will be enormous. Cripple and even closing some smaller business.

T.L. Cardwell

To the Editor I thought I should clarify. I spent 25 years in the Electricity Commission of NSW working, commissioning and operating the various power units. My last was the 4 X 350 MW Munmorah Power Station near Newcastle. I would be pleased to supply you any information you may require.
 

Coal price is probably coming under the same pressure, due to a stronger US$ because of recent US encouraging new jobs data, as oil is.
 
noirua said:
Coal price is probably coming under the same pressure, due to a stronger US$ because of recent US encouraging new jobs data, as oil is.
Click to expand...

Yeah could buy once its fallen and dust settles, futures still look pretty good though

ICE Rotterdam ICE Richards Bay ICE globalCOAL NEWC ®
May'10 $91.35 $91.35 $103.40
Jun'10 $92.00 $91.90 $103.25
Q3'10 $92.75 $91.65 $102.50
Q4'10 $96.50 $93.50 $102.65
Q1'11 $98.95 $93.70 $102.50
Q2'11 $101.30 $94.45 $102.60
2011 $102.45 $95.46 $102.70
2012 $109.65 $101.65 $106.14
2013 $116.90 $107.10 $110.85
2014 $119.25 $111.00 $112.50

Monthly Index
NEWC Index RB Index DES ARA Index
Apr-2010 100.21 88.79 79.72
Mar-2010 94.66 82.99 73.58
Feb-2010 93.25 82.88 75.70
Jan-2010 95.20 86.02 85.99

Weekly Index
NEWC Index RB Index DES ARA Index
07-May-2010 106.20 94.67 90.29
30-Apr-2010 108.87 96.13 88.52
23-Apr-2010 100.18 91.63 78.65
16-Apr-2010 98.28 85.25 77.24
 
With coal maybe nudging $500 / tonne then each coal wagon will be carrying about 40k worth of coal. 96 wagons for an average train = $3.84 million per train at spot coal price.
 
Wysiwyg said:
With coal maybe nudging $500 / tonne then each coal wagon will be carrying about 40k worth of coal. 96 wagons for an average train = $3.84 million per train at spot coal price.
Click to expand...
Short the railways and buy shares in Armaguard instead? They'll need an armed vehicle to carry the coal at that rate... :

Seriously, for thermal coal the price of fuel oil (or crude oil) sets a practical limit since there's considerable ability to substitute oil instead of coal for power generation (which, contrary to popular belief, doesn't normally use a lot of oil in most countries (though there are a few notable exceptions that use lots of oil)).

Oil is generally the fallback fuel when others are unavailable, and there's also the point that using oil tends to be somewhat cheaper in terms of non-fuel costs than coal due to its physical properties. In other words, power is generated from coal only because (1) tariffs, industry protection, national security etc (2) it's cheaper than oil. If coal had not been cheaper than oil since the early 1970's then there would be few modern coal-fired power stations in operation today. We use coal because it's cheap.

So if thermal coal approaches parity with oil then we can expect to see the oil price rise as well as substitution occurs. Given that a supply side response in oil production is unlikely and that the situation in Queensland is such that global coal demand likely does exceed supply capacity at the moment, it would seemingly come down to price rises for coal and oil, whilst also encouraging maximum utilisation of other energy sources that are available at short notice (most notably gas).

Add to that the recent outage of the pipeline in Alaska which shut down virtually all Alaskan oil production for a few days. Then add in the cold weather in the Northern hemisphere and associated demand for heating fuels.
 
Interesting Smurf.

1 metric tonne of coal = 4.879 barrels of crude oil equivalent.

So @ $90 / barrel of oil, coal could be more expensive . I suppose oil would be atomised via injection into the boilers for a conversion.
 
Wysiwyg said:
So @ $90 / barrel of oil, coal could be more expensive . I suppose oil would be atomised via injection into the boilers for a conversion.
Click to expand...
They are normally used as peaking or reserve plant only, but there are quite a lot of oil-fired power stations in the world, most of them built during the 60's and 70's when oil was cheap. Many of these plants are still in operating condition, or could be brought back from reserve if it were profitable to do so.

So it's largely a case of shifting production between power stations rather than simply switching fuels, although any modern coal-fired plant does have the ability to substitute at least some oil and/or gas since this is the fuel used for start-up (though they generally can not achieve full output using only the start-up fuel, but it's one means of cutting coal consumption if there's a reason to do so).

And then there's always gas turbines, many of which are liquid (diesel, kerosene) fuelled. Normally they're peaking and backup plant only. But if diesel becomes cheaper than coal then all that changes rather quickly since the reason they sit idle most of the time is more economic than technical (though actually getting enough liquid fuel to the plants could be an issue if they were run 24/7 since in many cases we're talking road transport. But they could certainly be run more than they are now if it made financial sense to do so).

In short, if oil were cheaper than coal then it's not possible to swap all electricity generation onto oil. But there's quite a few things that can be done to bring about a reduction in coal use and an increase in oil use. They can be substituted sufficiently that the coal price ought to not exceed the oil price, at least not for thermal coal (coking coal is another story).
 

Hi
Thanks for your modesty.
Your comments were never worth 2 cents. I would certainly rate it as few hundreds of dollars. Good points raised and I liked your other posting on coal as well.

If you know some one is selling cheap coking coal please let me know.

With the rising price of coal, the problem or opportunity now for the iron and steel producer to do away with Blast Furnace route of iron making. This requires about 600 kgs of coking coal per ton of iron production.

My 12 years experience in blast furnace route of making steel is now becoming obsolete

Cheers
 

http://www.globalcoal.com/futures/market.cfm

How futures have changed!

ICE Coal Futures Daily Settlement Prices for Friday, 01 April 2011
ICE Rotterdam ICE Richards Bay ICE globalCOAL NEWC ®
Apr'11 $128.60 $122.65 $123.50
May'11 $129.00 $123.00 $123.75
Q2'11 $128.98 $123.05 $123.83
Q3'11 $129.75 $124.65 $126.20
Q4'11 $131.05 $126.05 $127.85
Q1'12 $132.00 $127.00 $130.20
2012 $132.16 $127.30 $130.51
2013 $132.00 $127.71 $130.10
2014 $134.25 $129.25 $131.05
2015 $135.95 $130.10 $131.10

Btw Noirua, any coal stocks out there you like at current prices? thanks MS

---------------------------------------------

Coal (Thermal & Coking) Majors - CEY, FLX, GCL, MCC, NHC, WHC, AQA, RIV, COK, CZA, PRC, CNA, AVA, NEC, WES

Coal (Thermal & Coking) Minors: CDS, CAG, CES, EQX, EER, RCI, BWN, GNM, ATQ, TCM, FSE, CWK, REY, LOD, BTU, AAL, SRL, MLM, CCD

Coal Seam Gas (CTL & UCG) - GLX, BLK, LNC, AOE, SXP, MEE, CXY, PES, ESG, MPO, BUL, QGC, SHG, MEL, ENB, ORG, PGS, MAE, GEL
 
 
 
An indication of Coal prices for the coming quarter, pulled from WES announcement.

JULY 2012 TO SEPTEMBER 2012 QUARTER COAL PRICE NEGOTIATIONPrice negotiations for the July 2012 to September 2012 quarter for metallurgical coal exports from Wesfarmers Resources’ Curragh mine in Queensland’s Bowen Basin have now been concluded with the majority of customers.
For the July 2012 to September 2012 quarter, the weighted average US$FOB for new contract prices of Curragh metallurgical coal (hard coking, semi-hard coking and PCI) will increase by approximately 4 per cent as compared to the April 2012 to June 2012 quarter prices. All of Curragh’s contracted tonnage for this quarter is under the quarterly pricing mechanism.
The Managing Director of Wesfarmers Resources, Mr Stewart Butel, said the company was satisfied with the result of its negotiations for Curragh’s hard coking coal, with price settlements for the July 2012 to September 2012 quarter at approximately US$220 per metric tonne FOB Queensland.
 

Interesting even though hard coke price is down around 25% from the $300 level.

One danger for thermal coal comes from China with reports of known thermal coal resources at 5.5 trillion tonnes. Xinjiang has 2.19 trillion tonnes alone, about 40% of total resource, and foreign companies are becoming involved in buying ELs and MLs from Chinese owners for cash or/and royalties.

Many foreign companies including China's Shenhua are increasing interest in Mongolia where there are many very thick near surface coking coal resources.
 
There seem to be two distinct lines of thought so far as Chinese coal reserves are concerned.

1. Reserves are relatively limited and, given that they already account for about 50% of global output, we'll soon see a peak in production followed by a plateau and ultimate decline. China will thus depend on imports for any further growth of coal use, and is likely to focus heavily on alternative forms of energy for this reason. Witness the growth of coal imports plus the big LNG, hydro and nuclear projects as evidence.

2. China has vast coal reserves, information about which is fairly limited. China's construction of so much coal-fired power generating capacity is thus soundly based with plenty of coal for this and more. The hydro projects are just a cheaper means of meeting peak loads and there are of course non-power related uses of the dams too. Nuclear energy has more to do with national pride and technological development than any shortage of coal. And the LNG is for direct use as reticulated gas, thus cleaning up air in the cities, rather than as a replacement for limited coal supplies to large power stations.

Which is true I really don't know, but I've heard credible arguments for both positions at various times over the past few years.
 
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