Coal

Coal’s ascendancy to leave ailing U.S. miners in pit

28 Dec 2012

The black rock is set to replace oil as the world’s top energy source within five years. America sits on 28 pct of the planet’s coal. But geriatric mines and poor transport will prevent the U.S. industry profiting from the boom. Australian and Indonesian miners are better placed.

Corporate carbon bubble may start to deflate

12 Dec 2012

Science points to the potential for climate shocks in burning through just current proven oil, gas and coal reserves. Stock-market valuations of miners and oil groups don’t reflect the risk of a policy response. In 2013, investors may wake up to a carbon-constrained future.

Nat Rothschild better out than in at Bumi

16 Oct 2012

The financier’s resignation from the troubled coal company he helped create smoothes the way for a proposed exit by Bumi’s Indonesian partners. As an outsider Rothschild can argue publicly for giving minority shareholders full value - and maybe restore his reputation on the way.

Bumi should grit teeth and engage with Bakries

11 Oct 2012

The troubled acquisition vehicle has a rescue bid of sorts from its Indonesian backers. The Bakries would cancel their holding in return for a stake in coal assets they sold to Bumi last year. It’s awkward in every sense. But the Bumi board has to maximize value and should talk.

Bumi fiasco shows danger of bad incentives in M&A

28 Sep 2012

Whatever the truth behind alleged financial irregularities at the Indonesian coal miner, Bumi’s woes raise questions about the incentives that drove Nat Rothschild and other big names in finance to migrate the emerging-market miner to London. Merge in haste, repent at leisure.

Bumi reputational damage will spread far and wide

24 Sep 2012

The mining-focused acquisition vehicle has tumbled in value amid alleged financial irregularities in its Indonesian assets. A lack of information makes the shares hard to touch right now. And whatever the final financial fallout, the affair rubs off badly on the London market.

Coal’s slide poses broader risks for Indonesia

11 Sep 2012

It’s the biggest exporter of coal for electricity, but coal accounts for only 4.4 pct of GDP. The bigger worry is that falling exports spook foreign investors, undermine a provincial boom, and hurt poor workers. With elections looming, that could ratchet up nationalist rhetoric.

India’s coalgate fiasco could be an opportunity

28 Aug 2012

The government’s flawed coal policy has caused political gridlock. New Delhi needs a plan to show it’s learned from its mistakes. Handing mines to individual firms hasn’t helped get the black stuff out of the ground. A better approach would be to break Coal India’s monopoly.

Dropped Aussie coal bid calls end of go-go days

24 Aug 2012

The timing of Nathan Tinkler’s abandoned bid for Whitehaven Coal is apt. A day earlier, Australia’s mining minister caused a ruckus by declaring the resource boom “over”. Mining isn’t finished. But the debt-fuelled approach favoured by this Australian magnate may be.

Market could overrule U.S. court on coal pollution

22 Aug 2012

An appeals panel has put the brakes on the EPA’s effort to cut emissions from coal-fired power plants. That could keep the dirtiest U.S. smoke stacks going a bit longer. But at least for now, cheap gas is doing the environmental watchdog’s work, whether judges like it or not.

Whitehaven should give Tinkler cautious welcome

17 Jul 2012

Nathan Tinkler sold assets to the Australian coal producer months ago. Now he’s turning the tables, offering a 50 pct premium for Whitehaven itself. There is some logic to the move. But Whitehaven needs to be sure he can deliver before giving its approval.

Patriot’s collapse may prove coal’s low point

10 Jul 2012

Weak electricity demand and competition from cheap natural gas have been punishing all miners of the black stuff. But onerous retirement obligations and canceled contracts pulverized Patriot. Barring a calamitous price drop, most other big miners look sturdy enough to survive.

With TCI’s help, Coal India could top the Sensex

28 Mar 2012

Chris Hohn’s investment fund is raising the stakes in its tussle with New Delhi over the pricing of coal. The challenge is to win the policy argument as well as the legal one. Since reform could make Coal India the biggest company quoted in Mumbai, the outcome could be win-win.

Bitterness could twist India’s $211 bln coal saga

27 Mar 2012

Simmering worries about India’s cheapo sell-off of its coal assets could yet explode. The economic consequences may well be worse than those which followed the telecoms mess up. Consumers eventually benefited from the 2G mobile licences scandal. Coal could prove murkier.

India’s $211 bln coal saga can’t be brushed away

22 Mar 2012

The authors of a leaked official study into the sale of Indian coal mines are desperately trying to retract the whopping figure of $211 bln in lost revenue. But there is no way this news will go up in smoke. The economic, political and legal implications are far-reaching.

Declining U.S. coal still has bright spots

16 Mar 2012

You wouldn’t know it: coal’s share of U.S. power generation has dipped below 40 pct for the first time since 1978. Cheap gas and tougher pollution rules should extend the trend. But investors can still make winning bets if they plan for the industry’s decline.

Icahn targets given red alert by Dynegy debacle

12 Mar 2012

The activist’s reputation already precedes him when he turns up to agitate. Now a court-appointed official has shredded a retooling at Dynegy, where Icahn meddled and installed directors. Firms on the receiving end of his tactics, like CVR, have all the more reason to spurn him.

Coal industry blowing smoke with jobs claims

16 Nov 2011

A U.S. TV ad depicts Americans losing their jobs because of new pollution rules. The analysis is questionable even in isolation. But any loss for coal is a gain for other fuels like gas. And an estimated $200 bln in health savings from cleaner air counts for something, too.

Nat Rothschild’s Bumi broadside reveals weakness

10 Nov 2011

The investor’s coal bet looks messier by the day. He’s now trying to embarrass his Indonesian partners into fixing governance shortcomings that were apparent from the start. Outside investors could ultimately benefit. But by going public Rothschild has shown his lack of power.

India’s quest for foreign coal looks here to stay

3 Nov 2011

The country has the world’s fourth largest coal reserves, but environmental restrictions result in a struggle to keep up with demand. Indian firms have already spent $10 bln this year on mines overseas. Though imports are pricier, the domestic alternatives don’t look much better.