Indian Supreme Court rules every coal license given to private industry in last 20 years illegal

The Indian Supreme Court caused something of a sensation in late August, as it declared that “coal is kind and paramount lord of industry” while also ruling that every coal license given to private industry in the last 20 years has been illegal. At issuesis the fact that some power plants and steel mills have enjoyed access to ‘captive’ coal mines, where the coal mined was not subject to the open market. Such captive mine licenses were awarded to industrial users of coal amidst a long-standing suspicion of corruption of government officials, and the ruling by the Supreme Court seems to have confirmed such activity. Of the 218 licenses declared illegal, only 30 had been developed, and the court will not announce alternative plans for the licenses and mines until the coming week, meaning the physical impact is as yet unknown. A financial impact has already been felt, with shares in companies such as Jindal Steel and Power (owned by Naveen Jindal, brother of Sajjan) dropping by around 6-7%. Opinions about the impact on the coal-related sectors are mixed – some say the legal challenges which are sure to come will dent investor confidence and make the sector more shaky, while others say that removing any hint of corruption will ultimately do the sector good. More news is sure to follow in the coming weeks.

Predicted US manufacturing boom, driven by cheap shale gas, not yet apparent, but probably coming

The Wall Street Journal has carried an interesting piece on recent US balance-of-trade figures, which show that US increased imports in comparison to its exports from/to many of its manufacturing rivals. The figures are somewhat surprising to economists because energy prices in the US, driven by the shale gas boom, are much lower than in competing manufacturing companies (such as China, France and Germany), which have led to predictions of a major US manufacturing revival. Most economists, however, believe that the revival is still to come, as it takes companies time to shift production to (or back to) the US, and for the US to regain manufacturing expertise. This belief is backed up by recent statements by manufacturers such as BASF, which has said that it plans to reduce investment in Germany (which has industrial electricity prices 2.4 times those in the US) from 1/3 of its investment budget to 1/4 over the coming years.

Indian-owned companies looking to buy Italian steelmakers

Two potential purchases of Italian steelmakers by Indian companies have suggested that investors consider the European steel sector to be recovering and Italian assets to be good buys, as reported in the Financial Times. In the first, JSW Steel, owned by Indian billionaire Sajjan Jindal, is in advanced talks to buy bankrupt Italian steelmaker Lucchini, although the conclusion of the deal has already taken longer than initial expectations (and has yet to occur). It would be a first European acquisition for JSW Steel, which plans to use Lucchini’s Italian steel-rolling facilities to process Indian-made steel before sale within Europe (dampening any hopes of major investment into Lucchini). In the second, ArcelorMittal is looking to buy the Ilva steel plant near Taranto, in the south of Italy, the plant with a troubled environmental and human health record. If the deals go through remains to be seen, but the indication of a recovering European steel sector (and cheap Italian assets) is clear, the former giving some cause for encouragement after almost six years of struggle.

Sustainable Development Technology Canada calls for applicants for funding for clean technology research

Sustainable Development Technology Canada has announced that applications for funding from two different funds, the SD Tech Fund, and the SD Natural Gas Fund, will be open until 15 October 2015. The funding is open to Canadian innovators, and the aim is to finance the ‘gap’ in funding that often exists between the applied research and commercialisation stages – the demonstration stage. The SD Tech Fund includes focuses on clean energy and energy efficiency, while the SD Natural Gas Fund includes focuses on industry and power generation, meaning the funding is likely to appeal to combustion researchers in Canada. Projects funded through the SD Natural Gas Fund are eligible for a maximum of $CAD 30 million ($US 27.6 million/€21 million) over three years. SDTC currently funds 246 projects.

Shell installs final module at Quest CCS oil-sands project in Alberta, Canada

Shell Canada has finished installing the final CCS module at the Quest carbon capture and storage project in Alberta, Canada. Quest CCS, with an estimated budget of $CAD 1.35 billion ($US 1.24 billion/€945 million), is a part of Shell’s Scotford upgrader plant, which converts bitumen from the Athabasca oil sands project into crude for refining. Quest will capture 35% of direct emissions from the upgrader, with the storage site an impermeable layer of rock 2 km under the prairies of Alberta. This reduction will mean that crude from the Scotford plant will be less greenhouse gas intensive than typical conventional crude, which is usually around 15% less polluting, according to estimates. With the modules having been installed, Quest CSS as a whole is 70% complete, and on track to commence operation in 2015. Various levels of Canadian government have contributed a total of $CAD 865 million to the project, under the condition that Shell shares the knowledge and expertise gained.

J-Power bucks trend of poor business performance in Japan due to use of coal

Many power utilities in Japan have in recent years struggled to turn a profit due to nuclear power plant shutdowns following the 2011 Fukushima Nuclear Disaster. Electric Power Development Co (or J-Power), however, announced in late July that it is on track to record a 15% increase in annual profits over the current financial year, as it capitalises on its coal-fired power generation, which is in demand because of the limited availability of nuclear power-generated electricity. Also in late July, the company announced that it would begin the process to gain an approval for an expansion of its Takasago coal-fired plant from 500 MW to 1.2 GW, while in December last year it announced plans to build a 640 MW plant in conjunction with Nippon Steel & Sumitomo Metal. It appears coal has bright prospects in Japan for the medium term, and J-Power are keen to present a picture of low-emissions generation. Of its Takasago plant, a company spokesman recently said: “The general public still keeps the idea that coal is old and dirty. But it’s not like that. We have cohabited with a big, environmentally conscious city like Yokohama.”

Thailand’s EGAT to raise finance through infrastructure fund

Thailand’s chief power generator and distributor, Electricity Generating Authority of Thailand (EGAT), is to become the first Thai state-owned enterprise to raise finance via the issue of an investment fund. – for new generation capacity and distribution networks Though it planned to issue the fund this year, political instability has delayed the issue until 2015, when EGAT will attempt to raise 20 billion baht ($US 626 million/€476 million). Last month, the current military government approved EGAT’s plans to build three new power plants (with a combined value of 160 million baht).

Chinese power plant construction engineers kidnapped in Turkey

After July’s news of Chinese power sector workers being evacuated from their workplace in Iraq, further bad news came towards the end of August, with three construction engineers working on a plant in south-east Turkey being kidnapped by what is suspected (but not confirmed) to be the Kurdistan Workers’ Party (PKK). The kidnappings, which took place in a shop, coincided with a military attack on the construction site of a thermal power plant near the town of Silopi, near the border of Iraq and Syria. The months leading up to the attack had seen protests against the construction of the plant. The Chinese embassy in Turkey has asked the Turkish government to “go all out to rescue the missing Chinese workers while enhancing security measures for Chinese enterprises and employees in the country.” An operation has been launched to rescue the workers, but as yet has been unsuccessful.

Prosecutors investigate head of China Resources Power Holdings

In Jiangsu province in the east of China, prosecutors have begun to investigate the head of China Resources Power Holdings, Wang Yujun, according to The Wall Street Journal. The power generation company has suspended Mr Wang while the investigation takes place. While there are no further details about the investigation at present, it is speculated that it may be part of an anti-corruption push by the Chinese government.