Of the 31 power producers who had released profit forecasts for the first half, 19 expected losses and six forecast profit decrease, the Wind Info, a provider of financial data, said on Sunday.

Shanghai Electric Power Co, which suffered the heaviest losses, forecast 560 million yuan ($82.11 million) in losses in the first half, compared with a net profit of 211 million yuan during the same period of 2007.

The Huaneng Power International Inc, the listed arm of China Huaneng Group, also forecast losses early this week. According to the China Securities News, the company would lose 500 million yuan in the first half as the rising coal price added one billion yuan in fuel costs.

The government has raised retail electricity price by 0.025 yuan per kwh starting from July 1. Prices directly related to people’s livelihoods, however, remained unchanged, including public transport, taxis and household electricity.

The price increase, however, could only cover 15 percent of the losses in coal-fired power plants, said a Citic Securities analyst.

source: http://www.chinadaily.com.cn 21 July 2008

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“The installment ceremony of the new officials will be held tomorrow (Tuesday),” the source said.

Another source confirmed the replacement of both directors general but said the ceremony to install the new directors general would be held “later this week”.

The second source said Simon would retire, while Luluk would become secretary to the National Energy Council.

News Source : July 14, 2008 / Petromindo.com

The Queensland State government said it is considering three new coal mine projects and the development of Australia’s first coal port in 25 years that would boost the state’s coal export capacity by 40%.

Two projects recently proposed for approval are Waratah Coal’s A$5.3 billion ($5.19 billion) Galilee venture, which may produce 25 million mt of thermal coal/year, and BHP Billiton Mitsubishi Alliance’s plan to develop new mines at Daunia and Caval Ridge and expand operations at Goonyella Riverside, according to a statement from Queensland Premier Anna Bligh. BMA’s Bowen Basin Growth Project would boost coking coal exports in the area by about 20 million mt/year, Bligh was cited as saying in the statement.
“Both these major coal mining proposals have been declared ‘significant projects’ by the Coordinator-General and will now undergo a rigorous environmental assessment process,” the statement said. A coal port is planned to be built near Shoalwater Bay between Rockhampton and Mackay with an export capacity of up to 100 million mt/year, linked to the Galilee Basin by a
new 500 km rail line that would “open this region to coal exports for the first time,” according to the statement. Defense Force land is being targeted for use so the adjacent Byfield National Park would not be affected, it said. The third proposal — the Xstrata Coal-led 30 million mt/year Wandoan open cut mine — was declared a significant project in December, the statement said.
The coordinator-general expects to release draft terms of reference for the environmental impact statements for the new proposals by late September and for the Wandoan project shortly, it said.
Waratah Coal’s Galilee proposal involves a large scale mine in central Queensland, which aims to start exporting coal by 2012 and may expand production to 50 million mt/year. The project may create 2,200 jobs during construction and 760 jobs during operation. Waratah Coal on June 24 announced inferred resources in the Galilee Basin totaled 4.355 billion mt as a result of drilling to date and a further resource target of 675-840 million mt had been identified.

“It’s the first fall in Newcastle prices which have been on an upward trajectory for weeks,” said coal market analyst Andrew Harrington at Australian stockbroker Patersons Securities. Newcastle spot prices had been gathering momentum since early April when Japanese utilities fixed their 2008 fiscal year coal contracts at $125/mt and peaked at close to $200/mt FOB last week.

Physical market activity on globalCOAL was slower last week compared with the previous week. The first trades for physical Newcastle coal this week went through July 9, at $185/mt for a September 15,000 mt cargo and $184/mt for a same-sized October cargo. On July 1, globalCOAL’s FOB Newcastle contract traded at $196/mt for September, $197/mt for October and $201/mt for December delivery.

Coal market sources put forward two reasons for the apparent softening in physical Newcastle prices. Firstly, better vessel loading at Newcastle port and secondly, reduced spot demand caused by the preceding weeks’ high prices.

“The vessel queue is coming down and will be about 30 ships in a couple of weeks,” said one shipping source. He stated that high demurrage costs have spurred Australian coal shippers to operate on a more efficient basis. “Shippers of coal are waking up to the fact they don’t have to pay demurrage if they are much more efficient,” he said.

Demurrage is a fee paid by charterers for the time a vessel is unable to load cargo in port. Therefore, the longer vessels queue at port, the higher the demurrage fee.

The number of vessels waiting to load coal at Newcastle port was 40 at midnight July 9, according to the Chain Logistics Team website.

A coal market analyst was skeptical that Newcastle’s shipping performance could be turned around so quickly.

“They have had five years of problems and suddenly they are getting their act together,” he said.

Another coal market analyst suggested the port’s capacity balancing system, which matches vessels to available coal supply chain capacity, was helping to reduce congestion at Newcastle.

He said that this week’s drop in Newcastle coal prices was consistent with easing oil prices over the past week. It may also be the case that higher coal prices had choked off physical demand.

The analyst added that this week’s softening in Newcastle coal prices could mean two possible scenarios.

Either, that at $200/mt FOB prices had reached a threshold beyond which further rises were unlikely or, the market has taken a temporary break before moving up again.

News Source : Issue 877 / July 14, 2008 / Platts-International Coal Report – copyright The McGraw Hill Companies

In an invitations only tender that closed July 9, Napocor called for bids from eight companies for one panamax shipment for Pagbilao and three for Sual.

For Sual, Napocor is expcted to award three spot contracts to Banpu’s Indominco Mandiri, Manyplus of PT Prima Multimineral and Glencore for Kaltim Prima coal.

Banpu’s Indominco submitted an offer for one panamax shipment for $198/mt C&F. The FOB price offer was $174.50/mt for coal with a calorific value of 5,900 kcal/kg GAR, total moisture of 16%, sulfur of 0.85% and ash of 5%.

Its freight offer was $23.50/mt. The evaluated C&F price offer was $204.56/mt. Delivery is for October 11 to 20.

Manyplus, a trading company represented in the Philippines by Global Business Power, submitted offers for five barges of 9,000 mt each. The C&F price offer was $198/mt. The FOB price offer was $157/mt for coal with a heating value of 6,050 kcal/kg GAR, total moisture of 13%, sulfur of 1% and ash of 15%. Its freight offer was $41/mt.

The evaluated C&F price offer totaled $196.51/mt.

Delivery is for September 6 to 15. Manyplus trades coal for South Kalimantan producer PT Prima Multimineral.

Glencore submitted an offer for Kaltim Prima coal for Sual. Its C&F price was $203/mt. Its FOB price offer was $181/mt for coal with a calorific value of 6,100 kcal/kg GAR, total moisture of 16.8%, sulfur of 0.7% and ash of 7.5%. Its freight offer was $22/mt. The evaluated C&F price offer was $205.10/mt. Delivery is for November to December.

In the limited solicitation for Pagbilao, BHP Billiton for Arutmin submitted an offer for $216.73/mt C&F. The FOB price offer was $191/mt for coal with a heating value of 6,250 kcal/kg GAR, total moisture of 11%, sulfur of 0.93% and ash of 11.2%. The evaluated C&F offer was $208.44/mt. Delivery is September 11 to 20.

Napocor’s C&F price ceiling for the Sual solicitation was $206/mt for coal with a calorific value of 6,000 kcal/kg. It was $210/mt C&F for the Pagbilao bid.

News Source : Issue 877 / July 14, 2008 / Platts-International Coal Report – copyright The McGraw Hill Companies

He added the government also continued preparing a regulation on domestic market obligation requiring coal mining companies to set aside a certain portion of their output to the domestic market.

Under the coal contract of work (CCoW), coal-mining companies are obliged to set aside 13.5 percent of their annual production as royalty to the state. At present, however, the coal companies pay the royalties in cash rather than in kind.

Purnomo said the coal royalties were more than enough to fulfill the coal needs of the domestic market. The country’s coal output now stands at 230 million tons. 13.5 percent of the amount is equivalent to 31.05 million tons, while the domestic need is 28 million tons.

News Source : July 11, 2008 / Petromindo.com

“Inspection for both of turbines has been done, so the turbines can run at full capacity started Wednesday,” the plant’s field manager Sutikno said on Thursday as quoted by Bisnis Indonesia.

He said that the vessels carrying a total of 100,000 tons of coal for the plant’s July consumption have entered the company’s port and the Tanjung Intan port in Cilacap.

The plant was forced to partially operate due to the lack of coal supplies. Coal producer PT Adaro Indonesia, the main coal supplier for the plant, has agreed to resume coal shipment to the PT Sumber Segara Primadaya (S2P), the operator of the plant, after the latter agreed to settle its payment arrears.

He said his group’s joint venture with NMDC Ltd (NMDC.BO: Quote, Profile, Research, Stock Buzz) would soon finalise a deal with the Armenian government to buy 70 percent stakes in two iron ore mines.

Source: Reuters 10 July 2008