NDRC looks to shake up coal pricing

People's Daily
Wang Jiamei (Global Times)

With an ultimate goal of scrapping annual contracts altogether, the NDRC intends to encourage coal suppliers and power plants to ink medium- or long-term contracts with durations of three to five years during the annual thermal coal contract meetings which are likely to be held in mid- or late December of this year, according to the report. The new policy described by local media would mark the first time in nearly two decades that the country's coal supply has been completely exposed to market forces. 

In another major development for the coal industry, the NDRC is also expected to stop issuing framework plans to allocate railway capacity for thermal coal transportation. Buyers and sellers would instead have to bring their long-term contracts to local railway departments to secure the freight capacity they need.

China eyes scrapping annual term coal contracts - sources

Reuters
Fayen Wong

China's top economic planning agency has submitted a plan to scrap an annual coal contract system requiring suppliers to sell certain quantities to power companies at preferential prices, industry sources said on Tuesday.

The move heralds a big step towards liberalisation of the thermal coal market in China, the world's biggest buyer of the fuel, and could trigger an increase in imports since domestic prices would no longer be kept artificially low.

China may scrap coal contracts; open up way for further imports

Australia Mining
Cole Latimer

The National Development Reform Commission's (NRD) plan is just the latest in the ongoing liberalisation of China's coal market, and may precipitate an jump in imports as domestic prices will no longer be forced to remain low, according to Reuters.

South, East China coal consumption to rise 300,000 mt by 2015: consultancy

PLATTS
Reggie Le

Coal consumption in the South and East of China will reach 880 million mt/year by 2015, up by about 300 million mt from the current level, according to a consultancy report Friday.
Most of the increase in consumption will be met by imports, Beijing-based Dexin Yongming Consultation said in its report citing figures from the energy research unit under the ?National Development and Reform Commission (NDRC). 

Additionally, imports of LNG will also be encouraged.

But the government will not throw its weight behind long-distance extra-high-voltage power transmission, Mao Xinling, an analyst with Dexin Yongming said.

Meanwhile, to ease coal railing bottlenecks, the central government will seek to stop large amounts of coal transportation from western and northwestern regions to eastern and southeastern regions in the long run. 

China is set to maintain a high level of coal imports in the foreseeable future, a Beijing-based coal shipping and trading company executive said.

"The cancellation of the import duty on brown coal from January 1, 2012 onwards has confirmed the central government's commitment to encourage coal imports," he said.
In the first three quarters of 2012, China consumed 3.02 billion mt of coal, up 2.8% year on year, as Platts reported on November 2.
This will annualize at 4.03 billion mt for 2012. 

For comparison, China's national coal output will be kept at about 3.9 billion mt/year in 2015, according to the five-year development plan for the coal industry released by the National Energy Administration in March.

General News and Links: Coal accident in China leads to announcement of revised rules on mine re-opening (relatively meaningless - seems like just re-stating existing policy that is normally ignored by small coal mines); an AXA energy investment report released in early November gets cited by Reuters and Mining Weekly.


Guizhou mining accident - 18 dead
Bloomberg
Zhou Xin

China Tightens Rules on Reopening Coal Mines After Accidents
Bloomberg
Liza Lin

Coal market to face dropping quality, rising costs
Reuters
By Henning Gloystein and John McGarrity

Some investment analysts argue that this "golden age" of coal may be coming to an end, as large coal fields discovered in the last two decades, such as in Indonesia or Colombia, were easy to develop and the most economical reserves of the fossil fuel are fast being depleted, leading to a drop in the quality of what remains.
"High-quality and cheap coal supply is under serious threat ... (and) we believe the 'golden age' of coal will end sooner than expected," Axa Investment Managers said in a report.
Energy research and consultancy Wood Mackenzie says the quality of coal from Indonesia, the world's biggest exporter, is already low and will deteriorate further.

Coal demand to soar in short term, but longer outlook dim
Mining Weekly - Edited by Reuters

Global coal demand will soar in the short term as emerging markets rely on it to power economic expansion, but its declining quality and rising environmental awareness will dent demand in the longer term, Axa Investment Managers said....But coal has a competitive edge over fuels such as natural gas only as long as pollution control regulations are light, Axa said, adding that environmental awareness was rising fast in emerging markets. "For the next round of rapidly growing economies, the incentive bias towards coal will be shorter-lived than expected [and] stricter pollution controls may render many new coal-burning installations obsolete," the study said.

The War on Coal Is Being Won in the U.S., but the Real Battle Is Overseas
Time Science Blog
Bryan Walsh

揭秘“中信版”500亿铁路基金融资方案夭折之谜

Caijing
铁路发展基金: Railroad Development Fund

内蒙煤炭民企投资铁路背后：铁道部负债过高

南方都市报 (Southern Metropolis Daily) Link is to Sina.com posting of the article

南都记者 辛灵

Rise of China and Energy Implications - Baker Institute

Baker Institute - Rice University

Has several hours of videos on Youtube (linked) as well as PDFs of speaker's presentations - some good speakers and good information on China's energy future (shale gas, coal, LNG and Petroleum imports, Alternative energy investments, Automobiles)

Speakers include:
Edward Steinfeld - MIT
Edward L. Morse - Global Head of Commodities, Citigroup
Yan Wang, Managing Editor, China Investment Strategy, BCA Research
Mahmoud A. El-Gamal - Baker Inst
Alan Troner - President, Asia Pacific Energy Consulting
Rob E. Gardner - Economics & Energy Division, ExxonMobil Corporation
Ronald Soligo - Professor of Economics, Rice University
Kenneth B. Medlock III - Rice Fellow in Energy and Resource Economics
Amy Myers Jaffe - Baker Inst
Steven W. Lewis - Baker Inst
Hongtu Zhao, Deputy Director, Institute of World Economics, CICIR
David Mares - Baker Institute Scholar for Latin America Energy Studies
Yoshikazu Kobayashi - Institute of Energy Economics, Japan
James Russell - Naval Postgraduate School
Joe Barnes - Baker Inst

FULL LISTING OF SPEECHES and PDF files after jump:

World Resources Institute Coal Study  (pdf file)

World Resources Inst
Ailun Yang And Yiyun Cui

Has province-level data on proposed plants and installed capacity

Our analysis found that 483 power companies have proposed new coal-fired plants. With 66 proposed projects, Huaneng (Chinese) has proposed the most, followed by Guodian (Chinese), and NTPC (Indian)

铁道部酝酿设立铁路发展基金

经济参考报
作者：记者 张彬 杨烨 谭剑 朱峰/北京 长沙 石家庄报道
Railroad ministry planning to set up development fund -- to enable future private investment in railroads

铁路基建投资又迎新高潮 明年将超5160亿

来源：经济参考报

作者：记者 张彬 杨烨 朱峰 谭剑/北京 石家庄 长沙报道　　

2013 Capital investment in RR to be very high - more than $80BN USD - more than double 2012 levels. Has information on progress relative to 12th Five Year Plan in terms of miles of track and dollars invested.

Coal Swaps Gain for Indonesian Contracts; China Prices Advance

Bloomberg
By Fitri Wulandari 

Pricing data and some volumes

About 60 percent of Indonesia’s coal is classified as sub- bituminous. Higher moisture levels and a lower carbon content reduce the heating value compared with better-quality stock. Sub-bit coal has kilocalories of less than 6,100 per kilogram, according to the Indonesian energy ministry

Coal mines near uranium deposits spoiling value of nuclear fuel

SCMP
by Stephen Chen

Experts say many coal and uranium deposits are co-located and that extraction of the fossil fuel first is ruining the value of the nuclear fuel

Industrial Organization of the Chinese Coal Industry

Program on Energy and Sustainable Development, 2011

Jianjun Tu

• Review of China’s Coal Industry Policy
• Coal Supply: Resources, Reserves, and Production
  • Industry Structure and Organization
  • Production Costs
  • The Role of Government
• Coal Demand: Overview of Coal Consumption in China
  • Power Generation
  • Iron and Steel Industries
  • Chemicals
  • The Role of Government
• Coal Transport: Rail, Sea, River and Road Transport Networks
• Coal Grey Markets: the Untold Story of China’s “Unofficial” Coal Market

China’s coal imports soar in first 10 months

China Daily

China imported 220 million metric tons of coal in the first ten months of this year, up 33.5percent year-on-year, according to customs figures.The average price of imported coal was $103.30 a ton in that period, down 2.9 percent year-on-year.

China Shenhua Energy's Oct coal output up 2.1% on year at 23.9 mil mt

Platt's

Over the first ten months of 2012, Shenhua Energy sold 370.6 million mt of coal, up 16.7% year on year. Of that, exports comprised 2.9 million mt, down 40.8% from the year-ago period.The company imported 800,000 million mt of coal in October and a total of 6.5 million mt over January-October. It did not import any coal over January-October 2011.

Australian coal industry at Crossroads

Financial Times
By Jack Farchy

More general perspective on Pacific export coal:

With China and India Ravenous for Energy, Coal’s Future Seems Assured 

NYTimes November 12, 2012

Overly reliant on industry sourcing, i.e., Peabody study.

"Global demand for coal is expected to grow to 8.9 billion tons by 2016 from 7.9 billion tons this year, with the bulk of new demand — about 700 million tons — coming from China, according to a Peabody Energy study. China is expected to add 240 gigawatts, the equivalent of adding about 160 new coal-fired plants to the 620 operating now, within four years. During that period, India will add an additional 70 gigawatts through more than 46 plants."

Is it practical for China import American coal?

CQcoal.com
进口美国煤炭之路是否行得通?

Summary: