News Wrap

IN THIS morning’s News Wrap: Glencore sees coal price improving in 2016; Renewables squeezing out coal in SA; and BlackRock says mine closures will accelerate in 2016.

Lou Caruana

Glencore sees coal price improving in 2016

Glencore believes thermal coal markets will improve in 2016 and the Swiss miner wants to work with BHP Billiton to jointly buy a stake in a Colombian coal mine, according to the Sydney Morning Herald.

BHP and Glencore both own 33% of the Cerrejon coal mine in Colombia, and have been approached by the owner of the remaining 33%, Anglo American, about its desire to sell its stake.

Renewables squeezing out coal in SA

Supply of conventional baseload power in South Australia is tightening as wind power subsidised under the Renewable Energy Target policy is offered to the local market for very low – sometimes negative – prices, according to the Australian Financial Review.

This is driving some coal and gas generators out, leaving the state heavily dependant when the wind drops on a couple of gas turbines and a high voltage link to Victoria's brown power stations – and vulnerable to spot market spikes.

BlackRock says mine closures will accelerate in 2016

The manager of the world's biggest mining funds has conceded that dividends from the sector will be under pressure for some time, but predicted that mine closures will accelerate in 2016, according to the Sydney Morning Herald.

In a note to clients, BlackRock fund manager Evy Hambro said 2016 was shaping as another tough year for producers of natural resources.

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