Coal Age

NOV 2018

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6 November 2018 world news SUEK Plans to Ramp Up Production The Siberian Coal & Energy Co. (SUEK) reported year-to-date coal sales of 85 million metric tons (mt) in its third-quarter report. This represents a 9% year-on-year increase for Russia's largest coal producer. Domes- tic sales increased by 15% year-on-year. Of the 41.7 million mt of coal sold, 39.9 million mt were delivered to power plants. International coal sales grew by 4% year-on-year to 43.3 million mt of coal. SUEK is sup- plying coal to customers in Asia, Europe, the Middle East and north Africa. The company has some ambitious plans and it recently initiated construction of a new mine. While discussing the results, SUEK's Chairman Alexander Landia told Reuters that the company plans to ramp up output by 20 million mt over the next four years. This would increase annual output from 110 million mt to 130 million mt by 2022. "In the coming four to five years, we are going to invest something like $3 billion in further developing infrastructure," Landia said. He also said the company would consider an initial public offering (IPO) if the timing was right. SUEK Kuzbass recently broke ground on the November 7 New mine, which will extract coal from the Sychevsky-I seam. The planned launch date for the first longwall is 2020. The Sychevsky-1 seam thick- ness is 4.5 meters (m), the face length will be 360 m, and the design capacity will be 3.5 million mtpy. "The November 7 New name is meaningful," Yevgeny Yutyayev, general director of SUEK Kuzbass, said. "SUEK has managed to keep a close-knit team of the November 7 mine founded back in 1930, instead of permanently transferring these workers to a new company. "Over the last two years, we invested 1 billion roubles [about $15 million] in the development of this site. The launch of the first longwall requires around 10 billion roubles (about $152 million)." The scope of November 7 New project is limited to developing the Sychevsky-I seam, which has recoverable reserves of 23.9 million mt of grade D coal with a calorific value of 6,000 kcal/kg. Teck Misses Met Coal Guidance Teck Resources' third-quarter met coal sales of 6.7 million metric tons (mt) were 10% lower than a year ago and 100,000 mt below guidance. "We continued to experience logistical issues at Westshore Terminals, which negatively affects our ability to deliver coal to customers," said Don Lindsay, president and CEO, Teck Resources. "Demand remained strong and, accordingly, our third-quarter sales would have comfortably exceeded our guidance of 6.8 million mt. These logistical issues delayed the delivery of approximately 250,000 mt into the fourth quarter." The third-quarter price index for steelmaking coal sold under quarterly contracts was $188/mt. Global steel production and demand for met coal continues to be strong. Teck's third-quarter production of 6.4 million mt was 6% lower compared to the same period a year ago. This was largely the result of declining production at Coal Mountain Operations as the operation reached the end of its life and has concluded mining activity. "Coal Mountain Operations will process its last mined coal in the fourth quarter," Lindsay said. "For the balance of the year, we will continue to haul a portion of raw coal from the Elkview Operations to Coal Mountain Operations for processing to recover production short- falls from earlier in the year." The business unit achieved total material movement in the third quarter of approximately 75 million bank cubic meters of material, a 5% decrease over the same quarter a year ago, due mainly to a reduc- tion in contract mining. "Equipment utilization and productivities are achieving histori- cally high performance levels, resulting in higher than expected total material moved in the third quarter," Lindsay said. "Overall, this has led to an increase in raw coal inventories since the beginning of 2018 and improved our operational flexibility going forward." "The majority of our planned plant shutdowns are behind us and we are well-positioned to make up our production shortfall throughout the balance of the year to meet our production guidance," Lindsay said. While Westshore Terminals' performance improved after the first quarter of 2018, year-to-date average vessel wait time is approximately five days longer than in 2016 and 2017. In the third quarter, vessel wait times at Westshore Terminals were approximately three days lon- ger compared to the same period in 2016 and 2017. Indian Coal Shortage Persists, Even With Record Coal Production KOLKATA, INDIA—Indian state-run coal mining companies have re- versed the declining trend in production, but fuel demands in the in- dustrial sectors is expected to persist for another 2-3 years. Both state-run coal miners, Coal India Ltd. (CIL) and Singareni Collieries Co. Ltd. (SCCL) have recorded growths in production, but the rate of growth is not enough to mitigate the shortage in supplies faced by thermal power producers and other consumers. CIL, which accounted for more than 80% of domestic supplies, reported a production of 49.8 million metric tons (mt) during October, up 7% over the same period last year. Dispatches during October were at 50 million mt, up 3.5% over the same period last year. SCCL, with operations predominantly across southern India, pro- duced 5.3 million mt during October, up 31% over the same period last year. Dispatches by the miner was 5.9 million mt, higher than 5.1 million mt during October 2017. Production during April-October was reported by SCCL at 33.8 million mt compared to 31.8 million mt during the same period last year, with officials maintaining that the miner was well on the path of achieving its production target of 68 million mt during 2018-2019, against 61 million produced in the previous fiscal year. But the growth rate in coal production was still far lower than the rising demand for electricity and demand for dry fuel by thermal power plants. "Coal shortage in the power sector will persist for the next 2-3 years and various state governments have been directed to allow im- ports to ensure fuel supplies to plants operated by them," R. K. Singh, minister for power, said. "There is an acute shortage of coal and this is evident because of demand for power is growing. Coal will continue to be a problem till new mines are opened." According to government data, as of November 1, coal stocks with 27 thermal power plants across the country were pegged at 10 Dignitaries break ground on the November 7 New mine in the Kuzbass.

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