Colombia blocks Prodeco request to return coal titles
The Colombian government has rejected Switzerland-based Glencore's request to relinquish the three main mining titles associated with its Prodeco unit, regulator ANM has told Argus.
ANM declared the request to return Prodeco's 044-89, 285-95 and 109-90 licences "unviable", claiming that it has no certainty about whether the licences comply with the conservation and maintenance of the facilities and equipment.
"In order to safeguard the interest of the nation and protect the net worth of the state, it was considered appropriate to deny the request for the resignation of the aforementioned mining titles," ANM told Argus.
The three titles accounted for 8.8mn t, 3.7mn t and 1.5mn t of Prodeco's 2019 production, ANM data show, more than 99pc of its output that year.
Prodeco has appealed against the ruling and expects a final decision on 20 July, it told Argus.
Prodeco has also appealed against an earlier ANM decision to reject the return of its smaller DKP-141 and HKT-08031 titles. The regulator had until 18 June to consider the appeal, but has not yet published a decision.
Prodeco told Argus that the government had not accepted the company's initial request to halt mining activities for four years, nor to return its mining titles, but that it must continue with costly maintenance of the mines and equipment. The unit has been on care and maintenance since March 2020, when operations were first suspended during the first Covid-19 lockdown in Colombia.
Prodeco told Argus that its decision to halt coal mining in Colombia is unchanged when asked if it would consider resuming operations to take advantage of firm seaborne prices.
Argus assessed NAR 6,000 kcal/kg Colombian coal at $100/t fob Puerto Bolivar last week, the highest since Argus launched the assessment in 2013. Colombian coal prices have risen by more than 130pc over the past 12 months, as the Prodeco suspension has compounded wider supply tightness in the global market just as economies begin to recover from pandemic-induced lows in 2020.
Deadlock
The latest ANM decision means that the Prodeco saga remains at an impasse, sources said, as the ruling does not oblige the firm to resume operations.
One government source from the mining and planning unit said solving a dispute about the programme of works and investments and establishing a programme for the mine closure could help break the deadlock.
But there is also a risk of further litigation, with JcF Energy and Mining analyst Jaime Correal saying that Glencore could file a lawsuit against Colombia for refusing to allow the titles to be relinquished.
"Glencore invested over $3bn in Colombia and the company one way or another is going to seek a return for that investment. Given the long track record of Glencore filing lawsuits against Colombia, I am confident that the miner will most likely sue the nation," Correal added.
Glencore declined to comment.
Prodeco has produced and exported limited amounts of thermal coal despite the suspension.
Prodeco three months ago received authorisation from environmental regulator ANLA to produce 7,000t of thermal coal from its Calenturitas mine as the coal was catching fire. But a Prodeco worker said the amount mined at Calenturitas was 80,000t.
Some of the Calenturitas coal has been blended with supply from the eastern province of Norte de Santander, on the Venezuelan border, which Prodeco has procured from small producers in the region to fulfil two orders.
A 35,000t vessel will arrive at Puerto Nuevo on 29 June and a 22,000t vessel will arrive on 4 July, sources said, with Prodeco understood to be railing 9,000 t/week on the Fenoco railway.
Thermal coal exports through Puerto Nuevo totalled 125,000t in January-May, according to figures from shipping agency Naves.
Prodeco is reported to have rehired some workers in Cesar province to operate the railway and the port.
Related news posts
Engie to switch Chile coal plant to energy storage
Engie to switch Chile coal plant to energy storage
Santiago, 11 April (Argus) — French utility Engie is investing approximately $180mn to convert its former Tocopilla coal plant in northern Chile's Antofagasta region into a 116MW standalone battery energy storage system (BESS). The BESS Tocopilla plant will be able to store 660MWh captured from significant solar and wind curtailment in the north, which has risen by almost 250pc to 1,699GWh in the year-to-date compared to a year ago. The project involves installing 240 lithium ion-based containers on the former coal plant's site and making use of infrastructure synergies such as its transmission assets. Construction is scheduled to start in June. BESS Tocopilla will have an average annual generation capacity of 211GWh, the equivalent of supplying almost 90,000 Chilean homes with power, avoiding the emission of 51,231 t/yr of carbon dioxide equivalent, said Engie. Engie disconnected the 268MW Tocopilla coal and fuel oil plant in September 2022. Its 394MW combined-cycle Tocopilla gas plant, part of the same complex, continues to operate. Engie is the country's fourth-largest generator with an installed capacity of almost 2.5GW. BESS Tocopilla is its fourth industrial-scale storage project in Chile, one of which is already in operation and another two under construction. By Emily Russell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
April-May maintenance to close Australian coal systems
April-May maintenance to close Australian coal systems
Sydney, 10 April (Argus) — Australian rail firm Aurizon will close the 50mn t/yr Blackwater coal system in Queensland over 13-17 April for maintenance, with further closures scheduled for May. The firm, which operates the Central Queensland Coal Network (CQCN), confirmed that it plans to close its 60mn t/yr Goonyella system during 1-3 May, its 15mn t/yr Moura system for 14-16 May and Blackwater again during 27-29 May, as part of an annual planned maintenance programme. The only CQCN system not included in the maintenance programme is the 15mn t/yr Newlands system. Blackwater and Moura deliver coal to the port of Gladstone from the southern end of the Bowen basin. Goonyella delivers to the adjacent ports of Dalrymple Bay Coal Terminal, which is a multi-user facility, and BHP-operated Hay Point from the central Bowen basin. Newlands delivers to Abbot Point from the northern Bowen basin. Aurizon, Pacific National, BHP and some smaller coal haulage operators use the CQCN. Aurizon is targeting a 5pc year-on-year growth in coal haulage by its fleet across the CQCN and New South Wales/southern Queensland in the 2023-24 fiscal year to 30 June. This implies a target of 194mn t for 2023-24. It hauled 94mn t during July-December, leaving it a target of 100mn t for January-June. By Jo Clarke Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Panama Canal to restrict May transits on work
Panama Canal to restrict May transits on work
New York, 9 April (Argus) — Maintenance at the Panama Canal for the Panamax locks, responsible for around 70pc of all ship crossings at the waterway, will cut the daily number of vessel transits through these locks for nine days in mid-May, the Panama Canal Authority (ACP) said today. The ACP said it will reduce Panamax lock transits from 7 May to 14 May by three to a total of 17. The cuts entail two fewer "super" category slots for vessels like medium range (MR) tankers and Supramax bulkers and one fewer "regular" category slot for smaller vessels. An additional day of downtime "allowing 24 hours for unforeseeable maintenance delays" will put the projected end-date for maintenance and the return to 20 total Panamax lock transits on 16 May, according to the ACP, constituting a nine-day reduced-transit period that should drop total transits in the period by around 27 vessels. The potential for heightened competition amid a backlog of vessels vying to transit during this time could be mitigated by assigning "additional transits per day for each vessel category" based on the canal's "daily water consumption quota", according to the ACP. "These additional slots may be assigned to booked vessels that have already arrived at canal waters," the ACP said. "This measure is a temporary service subject to operational assessment, open to all vessel types based on the arrival date." The maintenance will primarily target the west lane of the Gatun locks, where ships enter the Panama Canal from the Atlantic basin, while the ACP noted that the east lane of the Miraflores locks on the Pacific side will undergo a simultaneous maintenance period from 11-12 May. Panamax lock transit auction prices hit low The average cost for ship operators to win an auction to transit the Panama Canal via the Panamax locks hit its lowest level Monday since Argus began the assessment in January on lower demand, particularly for dry bulkers utilizing alternative routings, and an uptick in auction slots in early March . "Since the peak period last year, auction prices have leveled off. They are generally near normal levels today," said the ACP. The rate for a Panamax lock auction dropped by $14,173 to $94,314, the lowest average price to transit since 26 January and representing a drop of $450,936 from the high hit on 5 February on a jump in demand ahead of lunar new year holidays across Asia-Pacific. Of the smaller dry bulkers that can fit in the Panamax locks, only 34 Handysize, 38 Supramax, and 31 Ultramax bulkers transited the Panama Canal in March compared with the 92 Handysize, 66 Supramax, and 88 Ultramax bulkers that transited in March 2023, the lowest number of transits in March for these segments through 2017, according to Kpler data. Dry bulk Panama Canal transits down, tanker transits stabilizing The share of dry bulkers utilizing the Panamax locks at the Panama Canal was at 15.2pc of total transits in February, down from the 25.5pc share that dry bulkers held in September 2023, according to ACP data, before the ACP instituted daily vessel restrictions and the current prebooking/auction slot system supplanted the previous, first-come, first-serve waiting system in late October 2023. Meanwhile, 149 MR tankers transited in March, down from the 169 that transited in the same period the year prior but up from the 107 MRs that crossed the canal in February. MR transits have risen every year in March, according to Kpler, as west coast South America diesel demand jumps on the resurgence of refinery utilization in the US Gulf coast after the first quarter turnaround season draws to a close. Crude, product, and chemical tanker transits rose by 1.7 percentage points to 30.3pc, making up the plurality of all Panamax lock transits collectively in February from September 2023, according to ACP data. The uptick in available Panamax lock auctions in early March has likely offset the steady demand for these vessels and contributed to the downward pressure on auction prices, while the reduced transits during the upcoming nine days of maintenance could reverse this trend in the short term. ACP expects transit restrictions to lift by 2025 In the long term, the Panama Canal expects a return to normalcy within the next two years, beginning with the start of the rainy season in the coming weeks. "Current forecasts indicate that steady rainfall will arrive in late April and continue for a few months," the ACP said today. "If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025." By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s NTPC targets 40mn t coal output in FY2024-25
India’s NTPC targets 40mn t coal output in FY2024-25
Singapore, 9 April (Argus) — Indian state-controlled utility NTPC aims to raise coal production from its captive blocks by around 16pc during the April 2024-March 2025 financial year from a year earlier. This is to partly meet its coal requirement to boost generation and meet the country's growing power demand. The goal is to produce 40mn t in the 2024-25 fiscal year from coal blocks allocated by the federal government for its power plants, up from 34.38mn t a year earlier, NTPC said in a statement. The growth in production would help to meet 15pc of NTPC's projected fuel requirement, it added. The plan to boost output from the so-called captive coal blocks is part of efforts to increase domestic coal output and trim imports. The growth in production would be supported by the implementation of a range of strategies and technologies that would include better mine planning and equipment automation, among others, NTPC said. NTPC, along with its joint ventures, imported about 16.5mn t of coal in 2022-23 and received at least 10.5mn t of seaborne coal in 2023-24. The growth in captive production is also key to India's plans to increase local production and meet the growing requirement of the power sector. India imported 14.69mn t of thermal coal in February, up from 10.28mn t a year earlier, according to data from shipbroker Interocean. Power generation NTPC, which meets a quarter of India's power demand, generated 422TWh of electricity in 2023-24, up by about 6pc from the previous fiscal year. The utility plans to add 5GW of new generation capacity in the current financial year, after adding about 3.9GW in 2023-24. Its total generation capacity is close to 76GW at present. As much as 60pc of the proposed capacity for 2024-25 would comprise renewable energy, while new thermal power capacity would account for the remainder, NTPC said. The utility has an operational renewable power capacity of 3.5GW. NTPC is looking to expand its non-fossil fuel-based capacity to 45-50pc of the company's generation portfolio by 2032, with a planned renewable energy capacity of 60GW out of the targeted 130GW total capacity. It has renewable power projects totalling more than 20GW under construction. By Saurabh Chaturvedi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more