Coal

New York coal settlement could be climate canary

9 Nov 2015

Peabody’s deal with state prosecutors over misleading atmospheric risks may inform a similar probe of Exxon. Though the lack of fines is a weak sign, the miner at least must share its assessment of possible climate rules. That could expose the danger of stranded energy assets.

Challenges to U.S. carbon rules won’t save coal

3 Aug 2015

President Obama will unveil new pollution caps for power plants on the same day a big coal miner, Alpha Natural Resources, filed for bankruptcy. The limits are riling energy industry supporters, but for coal it’s economic pressures, not politics, that are causing the pain.

Potash Corp may have to go too far to get K+S

3 Jul 2015

The Canadian fertiliser giant is willing to bid $10.5 bln for its German peer. It will need to improve its offer and give credible job guarantees to win over the target. But these concessions could become contradictory. A higher price implies Potash will need bigger cost cuts.

Dirty coal deal dents Merkel’s climate credentials

2 Jul 2015

A costly compromise protecting carbon-heavy lignite has sent RWE shares up 5 pct. But it puts Berlin’s ambitious 2020 emission goals at risk. Angela Merkel’s green credentials are suffering just when she needs them to push for consensus at December’s crucial Paris climate summit.

Coal IPO may buck broader U.S. industry downturn

1 Apr 2015

Consol is preparing to float some anthracite assets. Coal is a troubled business, but the $6 bln U.S. energy group’s mines need little investment and make money at current low prices. And the stock offering is also being packaged as an MLP, which brings some handy tax benefits.

Modi market mania faces test in $3.7 bln coal sale

30 Jan 2015

The government is selling a 10 percent stake in the lumbering monopoly to meet its deficit target. A pledge to ramp up domestic production makes it easier to lure buyers. Still, investor enthusiasm for Coal India shares will set the tone for a big pipeline of chunky deals.

Coal and currency set glum path for Indonesian GDP

16 Dec 2014

The rupiah has slumped to a 16-year low as capital flees. Outflows could accelerate if falling Indonesian coal prices start mirroring the collapse in oil. A weakening rupiah could hurt foreign-currency borrowers and stoke inflation. That doesn’t augur well for growth in 2015.   

Shale gas could blow up U.S. politics

27 Oct 2014

It’s playing a big part in upcoming midterm elections. Coal’s downfall is an important issue in one race that could swing the Senate Republican. Obama’s “war” on the dirty carbon is real, but so are market forces. Fracking-related jobs and manufacturing could rock future votes.

China coal tariffs blacken Aussie free trade talks

14 Oct 2014

Import taxes will help China to protect its ailing domestic producers from a glut of cheap foreign supply. Yet raising the defences makes it even harder for Australia, a top exporter, to present a long-awaited agreement with its top trading partner as evenly balanced.

Court order adds urgency to India’s coal crunch

26 Aug 2014

The Supreme Court has ruled the practice of allocating coal mines to metal and power companies to be illegal. In the long run, transparent auctions will be better. But the verdict will force the government to find a timely solution to an acute coal shortage that may now worsen.

One U.S. coal miner could be a canary

10 Jun 2014

When $11 bln Consol bet big on gas in 2010, investors sold in favor of rivals focused exclusively on the black rock. Now, with a clean air crackdown coming, Consol’s value dwarfs that of once-larger Peabody. The prescient hedge could be a telltale sign for the energy industry.

U.S. carbon emissions crackdown is well timed

2 Jun 2014

Obama’s proposed steep cuts in power plant pollution are bad news for the coal industry. But unlike Germany’s expensive retreat from nuclear power, the U.S. has cheap gas to fall back on. America’s shale dividend will offset any costs of going greener – at least at home.

Stanford’s snub to coal typical of Silicon Valley

8 May 2014

The black rock is an easy target for the university’s $18.7 bln endowment. Yet shouldn’t the principle behind it apply equally to oil producers, even local titan and Stanford donor Chevron? Like some of its grads, the university seems willing to shun certain evils only so far.

Lump of coal leaves Consol shareholders wanting

28 Oct 2013

Splitting its gas business off from mining the black rock could boost the energy company’s $9 bln market value by half. Instead, Consol has decided just to sell five older coal mines. It’s no disaster, but it’s an early Christmas gift its investors could have done without.

Obama’s anti-carbon plan is more cost than benefit

25 Jun 2013

The president’s new pollution caps will probably just lead to increased coal exports, already at a record high, and lower industry profitability – but not to the intended goal of climate improvement. His $8 bln fund to clean up the fossil fuel is a better way forward.

U.S. energy sector activists not quite out of fuel

26 Mar 2013

Hedge fund Audley’s effort to inject fresh board blood into $1.8 bln coal miner Walter Energy suggests bigger targets with egregious governance like Chesapeake and Hess are growing scarce. But there are still a few, like Apache and Devon, where weak performance invites scrutiny.

Bumi debacle teaches some all too basic lessons

22 Feb 2013

Most of the mess at the London-listed Indonesian coal miner could have been avoided if Nat Rothschild and his backers had followed what should be standard practices for risky investments. Breakingviews has a check-list for future purveyors of exotic deal structures.

Bumi shareholders should back incumbent board

13 Feb 2013

Competing plans to salvage value at the coal miner both have serious flaws. But current management, rather than Nat Rothschild, is best placed to achieve an all-important split with Indonesia’s Bakrie family. Once assured by a promised break fee, investors should offer support.

Fog of Bumi’s battles may be just too tiresome

22 Jan 2013

Bumi minorities are ill-served by open conflict between the coal miner’s board, its founder Nat Rothschild and Indonesia’s Bakrie clan. News on a probe into Bumi’s Indonesian operations does nothing to clear the air. With shares well up on the nadir, the exit beckons.

Rio’s snap succession makes bad news look worse

17 Jan 2013

The miner’s investors were expecting a big writedown, although maybe not $14 bln, including $3 bln on a 2011 African coal deal. But even though the new CEO, Rio iron ore chief Sam Walsh, is experienced and capable, the decision to replace Tom Albanese immediately looks rushed.