NewCoal’s unpopularity is no barrier for some miners’ growth in Asia
Falling coal demand in the West and in China, the world’s largest consumer of the polluting fuel has not killed enthusiasm for expansion for some coal miners
Falling coal demand in the West and in China, the world’s largest consumer of the pollution-prone fossil fuel, and escalating opposition against coal consumption from environmentalists have not killed the enthusiasm for expansion for some coal miners, Singapore-based Agritrade Resources is one.
The Hong Kong-listed developer of coal mines in Indonesia’s Central Kalimantan province has recently received shareholders’ approval to buy 51 per cent of a new mine there for US$153 million, banking on rising demand for less polluting coal with higher energy content.
“China’s coal consumption has fallen 4.5 per cent this year due to the economic slowdown and switch to cleaner energy, but consumption of higher-grade coal has gone up due to the need to cut carbon emissions,” chief financial officer Ashok Sahoo told the South China Morning Post. “Indonesia’s location gives it four to five US dollars a tonne of shipping cost advantage against coal from Australia.”
Power-station coal with heating value of 6.3 million calories per kilogram at Australia’s Newcastle port – a regional benchmark - traded at around US$52.5 a tonne in November, the lowest in almost nine years and 67 per cent lower than the US$160 peak seen in June 2008.
When the acquisition is complete, Agritrade will be 19 per cent owned by the mine’s seller, a firm 90 per cent owned by mainland businessman Yu Jing.
Agritrade chief executive Ng Xinwei said Yu and his partners are former senior executives of Shandong province-based state-backed Yanzhou Coal Mining, who sought opportunities to develop underground mines in Indonesia after selling their privately-owned mines in China.