Colombia coking coal, met coke hit by virus fears
Colombia's coking coal and metallurgical coke production has fallen after many workers returned to their hometowns amid fears of a coronavirus outbreak in the country. Exports of these materials have also been delayed amid stricter sanitary measures and vessel inspections, two met coke exporters said.
Colombia, the world's fourth-largest coal exporter, imposed a 19-day national quarantine starting yesterday at 23:59 local time, until the end of 13 April. While the presidential decree exempted coal mining from the quarantine, coking coal and met coke exporters said measures to stem the spread of the coronavirus, including a curfew across the country, have diminished the pool of available workers at mines and ports and slowed exports.
One miner said the production coal chain has been diminished by 50pc. Another said the initial impact is not that significant but will increase with time.
"Even if you want to work some things are not flowing. There is a delay in operations because people are scared," a large coking coal and met coke exporter said.
Companies acknowledge the risks of a coronavirus outbreak among workers especially at underground mines. One company has asked mine owners to have workers sign a form that exempts the company from any liability in case the worker gets infected. Some workers at coking coal mines have not showed up to work for fear of getting sick.
Companies are also facing difficulties transporting coal from the interior of the country to Caribbean and Pacific ports.
The country's coal federation Fenalcarbon said steam, coking coal and met coke mining firms have taken measures to avoid crowds and have designed even stricter health and hygiene protocols for worker safety.
"At the moment there is no international demand. We are fulfilling a previously concluded contract. But we are also facing delays in payments by the international buyer. As a result, we will not deliver any more coal until they pay us," said one coking coal exporter.
Gerdau Diaco, the local unit of Brazilian steelmaker Gerdau, has ceased operations during the lockdown but plans to restart when the quarantine ends. The company operates the country's largest scrap iron recycling plant in the town of Tocancipa, which has stopped running. And the company's production plants in Muna, Cali, Tuta and Duitama are not operating.
Colombian steelmaker Acerias Paz del Rio, the local unit of Brazilian-controlled Votorantim, is still in operation and requiring higher amounts of coking coal, according to a large producer in the municipality of Samaca.
Exporters are facing loading delays because vessels coming from abroad are being inspected by maritime authority Dimar as part of sanitary control measures to contain the coronavirus outbreak.
Colombia's exports to India have also been affected as berthing and uploading activities have halted at some major ports.
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BHP cuts Australian met coal sales guidance again
BHP cuts Australian met coal sales guidance again
Sydney, 18 April (Argus) — Australian mining firm BHP has cut its coking coal guidance for the 2023-24 fiscal year to 30 June to a new decade-low of 43mn-45mn t because of the impact of wet weather and cyclones on its Queensland operations. The BHP Mitsubishi Alliance (BMA), which is 50pc owned by BHP and 50pc by Japanese trading house Mitsubishi, had already cut its guidance by 18pc in January to 46mn-50mn t of metallurgical coal for 2023-24, down from the previous guidance of 56mn-62mn t issued in July. At that time it cited the impact of the sale of the Blackwater and Daunia coking and thermal coal mines in Queensland to Australian independent Whitehaven, which it completed on 2 April, maintenance, a fatality at its 10mn t/yr Saraji mine and increased removal of waste. The latest downgrade was blamed again on the Saraji incident, as well as on wet cyclonic weather in Queensland and an inventory rebuild after the impact of flooding and labour shortages in 2022 and 2023. The inventory rebuild will continue into calendar year 2025, which could further weigh on sales into 2024-25. The further reduction in expected sales volumes led BHP to increase its cost guidance for 2023-24 to $119-125/t from $110-116/t in January and from $95-105/t in June. BHP received an average price of $274.99/t for hard coking coal and $204.55/t for weak coking coal during July-December, up from $242.52/t and $190.74/t for January-June and $270.65/t and $252.12/t in July-December 2022. It defines hard coking coal as those with a coke strength after reaction (CSR) of 35 and above, with weak coking coal being those with a CSR of below 35. Argus last assessed the premium hard low-volatile metallurgical coal price at $249/t fob Australia on 17 March, down from $336.50/t on 17 January. By Jo Clarke BHP metallurgical coal sales (mn t) Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 Jul-Mar '23-24 July-Mar '22-23 Coking coal 5.41 4.76 5.37 14.66 16.86 Weak coking coal 0.93 0.75 0.71 2.21 2.04 Thermal coal 0.02 0.20 0.10 0.52 0.80 Total BMA 6.36 5.71 6.19 17.39 19.70 Total BMA (100%) 12.72 11.41 12.37 34.78 39.39 Source: BHP Australian metallurgical coal prices ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia provides $256mn to high-purity alumina plant
Australia provides $256mn to high-purity alumina plant
Sydney, 17 April (Argus) — Australia's federal Labor government will offer A$400mn ($256mn) in loans to a high-purity alumina (HPA) processing facility, as part of its recently announced Future Made in Australia policy. Canberra has granted Australian developer Alpha HPA the funds via two separate agencies. The Northern Australian Infrastructure Facility and Export Finance Australia's (EFA) A$4bn critical minerals facility will each offer A$160mn and the two agencies will jointly fund a further A$80mn cost overrun facility, with drawdown on the grants contingent on Alpha HPA securing letters of intent for 10,000 t/yr in output. The announcement comes after the Queensland government provided A$21.7mn for the second stage of the facility at the industrial city of Gladstone in Queensland state. Australia's other HPA producer is Cadoux, formerly FYI Resources , is planning a 10,000 t/yr operation in Western Australia (WA) state's Kwinana industrial zone. The firm received an A$3mn grant from the WA government in November for an initial small-scale production plant. Graphite grant Canberra also brought forward an A$185mn EFA loan to Australian emerging graphite producer Renascor for stage 1 of its proposed vertically integrated battery anode material manufacturing project. A downstream graphite concentrator plant is planned for South Australia state with feedstock from the Siviour deposit, the largest outside Africa, Renascor said on 17 April. The original loan was approved in 2022, and Canberra said the concentrator project will now be realised sooner. Stage 2 will produce Australian-made purified spherical graphite for use in lithium-ion batteries required for electric vehicles and renewable technologies, Canberra said. Renascor is progressing advanced engineering designs for the mineral processing plant and non-process infrastructure while discussing binding offtake terms with existing partners, as well as with other battery-anode market participants. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Ramaco adding production, sees market growth
Q&A: Ramaco adding production, sees market growth
New York, 16 April (Argus) — Randall Atkins is a founder and chief executive of metallurgical coal producer Ramaco Resources. He also has been involved in energy-related investment and financing activity for over 40 years. In this Q&A, edited for length and clarity, he discusses effects from the Francis Scott Key bridge collapse, his outlook for coal and the company's research projects. What effect has the Key bridge collapse and Port of Baltimore closing had on Ramaco and the US coal industry in general? Like most things of that tragic nature, it is going to take longer than everyone expects to actually solve the problem. I think where it is going to impact producers probably more is on the rails. There will be a need for...producers to rearrange stockpiles and to rearrange where they are going to try and ship, even at reduced levels. Particularly, CSX is going to have an immense logistical complexity to deal with over the near-term. We do not ship from Baltimore. We have not seen any problems, knock on wood, with our rail shipments post the incident. What are your long-term projections for metallurgical coal given expectations that low-volatile coal reserves will shrink in coming decades and the steel industry could be in oversupply? Low vol coal has traditionally been the highest priced coal and the dearest, if you will. High vol A coal has over the last few years grown in importance, and to the extent that there is any new increase in production in the US, it's high vol. What we perceive is that there is going to be a crowding in the high vol space. As a result, our increase in production is primarily in low vol. As far as the demand side is concerned, we do not believe that blast furnace steel demand is going to decline anytime soon. There's a lot of noise from the green community that hydrogen is going to replace coal in blast furnaces. We took some advice on that from the IEA…and when that question was posed (to IEA), the answer that was given was it would take about $1.5 trillion to build a pilot plant using hydrogen by 2035 and probably about another equal or greater sum to build a commercial facility by 2040. So, I don't lose a lot of sleep on the demand for coal for blast furnaces. What I do see shifting, however, is the US has held relatively steady at about 20mn short tons (18.1mn metric tonnes) of met coal demand over the last 10 to 15 years. The growth is clearly overseas, and the growth is clearly at the moment in Asia. When we started back in 2017, and 2018 was really our first year of production, we predominantly sold coal domestically; I think 80pc of our coal went to US steel mills. Now that is almost reversed. We're going to sell probably this year, 70pc overseas, and about a third or less domestically. With Europe moving towards electric arc furnace technology and significant new blast furnace capacity coming online in Asia, what kind of role will the US play as a coal supplier over the coming years? It is cheaper to use a blast furnace than electric arc. And the steel that they (Asian companies) mostly require is the heavier steel for cars and buildings and things of that nature. So, they have a bias towards blast furnace capacity. The US and Europe are very developed economies that are trying to go and wean away from coal, (while) the rest of the world is aggressively moving further into coal. People will shake their heads at the cost that European and American consumers will start to have to pay for that privilege. We see market growth is still there, but it's a different kind of growth. It will be more in the Asian markets, predominantly some in Europe, some in South America and Africa. The low vol coal demand in Asia is extremely strong because while they are able to buy high vol product from Australia very inexpensively, they do not have the low vol production. They need that to blend up to get the proper mix in their blast furnaces. There is a very good future for low vol, and that is the direction we are positioning ourselves. How confident is Ramaco about securing its investments in the longer run given the emphasis on ESG? What I see is sort of a dichotomy. In the thermal coal business, there's not a lot of investment in new mining there for the obvious reason that their customer base is declining. On the met side, it is a bit shortsighted from an investment standpoint because of the composition of the ownership of met coal companies. Virtually every major metallurgical coal producer except for us went through bankruptcy and post-bankruptcy proceedings. Their board composition became essentially distressed debt investors...Their interest was not developing a long-term coal company. Strategically their vision was: "How can we most quickly get money back out of that coal company?" We are certainly the only coal company that is doubling in size. We produced a little under 4mn st last year. We will be at about 4.5mn st this year. We can maybe go higher, depending upon the market. The market is not strong right now. The other issue (for coal producers) even when they weren't doing special dividends, is they've now shifted to doing large-scale share buybacks. You are starting to see the cost curve increase for most domestic coal producers. What you haven't seen, but I think you will probably find over the next probably 18 to 24 months, is you will begin to see depletion kick in. The amount of coal that they are able to produce from their existing operation will begin to decline. And that is strictly a result of not investing in new mine production. My approach was to kind of be a little bit of an outlier and then approach coal to products as an alternative use, certainly for thermal coal. And that, of course, brought us to rare earth (mineral extraction). Do you have funding for Ramaco's rare earth materials projects? Let me step back one step. We introduced the idea that we actually had rare earth (deposits) in May 2023….When we sent the samples to be tested, they tested them as if they were hard minerals. In other words, they did not combust off the organic material. What we have done since then, is we went back and we had samples that were probably 200-300 parts per million. From a commercial standpoint, we have kind of crossed the Rubicon that this is indeed sufficiently concentrated that it makes commercial sense. Now what we are doing is we are going through a process of further chemical analysis and testing to determine what is the best extraction and refinement technique. And the last point you raised was financing. We have a very nice growing mining metallurgical business, which can provide the funding to do whatever we want to do on rare earth. I am not too concerned about our financing capability. Any updates on your coal-to-carbon product projects ? We have looked at a number of different things with the national labs. We started looking at carbon fiber, which could be made from coal and we have got some patents around some very interesting processes. The areas that we are now focusing on...are using coal to make synthetic graphite. The other thing we are working on is using coal for direct air capture. We are considering going into a pilot phase sometime starting later this year with Oak Ridge National Laboratory on a synthetic graphite plant. As far as direct air capture, we probably have more work to do. We are also working on that with Oak Ridge. But I would hope that sometime by 2025, certainly 2026, we would perhaps have our first product, quote unquote, to be able to offer into the market. And it would be delightful if it was synthetic graphite. By Elena Vasilyeva Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Liberty Whyalla blast furnace down after maintenance
Liberty Whyalla blast furnace down after maintenance
London, 16 April (Argus) — GFG Alliance is negotiating with workers at its Whyalla plant in Australia for "short-term" options as its blast furnace experienced operational and technical issues after maintenance work last month. Suppliers of the plant told Argus in late March that the blast furnace was experiencing issues. "Ageing assets like the blast furnace will eventually be retired as part of the Whyalla Steelworks transition to new technologies," a GFG spokesman said. "Plans are being developed to safely continue productivity of the blast furnace and, more broadly, the Whyalla Steelworks, as well as enable a more sustainable future." "GFG remains committed to returning the blast furnace safely to operational use," he added. GFG is a collection of entities including Liberty Steel. Whyalla has a production capacity of about 1.2mn t/yr, with about two-thirds of that cast into billet and sent by rail to GFG's Infrabuild business for processing into longs. Under the agreement between the two plants, payment from Infrabuild to Whyalla can be made before delivery. Infrabuild raised $350mn through a bond sale towards the end of last year at an interest rate of 14.5pc. Meanwhile, Liberty remains in talks with the Czech government over the emissions allowances for its Ostrava site. The Czech Ministry of Environment wants proof that Ostrava will produce again before granting free allowances to the site, and the significant change in its operating rates mean the company may not receive those allowances until June or July — its restructuring plan envisages selling a portion of those allowances in May. The idling of the blast furnace since October, and the stoppage of coking facilities at the site, also impacts the number of allowances that will be granted. Sources suggest coking is unlikely to restart, meaning there will be no allowances granted for the facility, while there is also concern about when the blast furnace may restart. "The EU emissions trading system is a complex system which is designed to avoid interference in the distribution of the allowances and the calculations of the emissions," a Liberty spokesperson said. "This system governs about 11,000 companies across the EU and Liberty Ostrava only expects to be treated in the same way as all the others." By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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