News Wrap

IN THIS morning’s News Wrap: S&P cuts Peabody rating; Sinopec cleared for giant coal-to-gas plant; Uralkali CEO arrested in potash stoush; and Lightning Ridge Miners speak out.

Noel Dyson

Peabody downgraded

Coal mining giant Peabody Energy has had its rating downgraded by Standard & Poor’s to double-B – two levels into junk territory – from double-B-plus, according to the Wall Street Journal.

The ratings firm noted Peabody continued to face low domestic thermal coal prices in its native US as utilities continue to work off their inventories. It also is facing weakening prices for metallurgical coal.

While coal demand is starting to improve, relatively low natural gas prices are putting a brake on price rises.

Peabody also faces operating disruptions, particularly in its Australian operations where floods in 2011 caused prices to temporarily spike.

S&P’s downgrade comes after Fitch Ratings and Moody’s Investors Service last week downgraded their respective ratings on Peabody – both citing weak markets for thermal and metallurgical coal.

Sinopec’s giant

Sinopec has received Beijing’s approval for a mega project to turn coal into natural gas, the South China Morning Post reports.

The move is part of China’s plan to increase energy efficiency and cut reliance on oil and gas imports.

The project involves the construction of an 8000 kilometre main gas pipeline from Xinjiang Uygur autonomous region to Zheijiang province through Guandong.

Five branch pipelines will also be built.

The total pipeline cost is expected to exceed 100 billion yuan ($A18.1 billion) and it is expected to have a total capacity of 30 billion cubic metres to 36Bcu.m.

Urakali boss banged up

Urakali chief executive Vladislav Baumgertner has been arrested for an alleged abuse of authority, The West Australian reports.

Authorities detained him at Minsk airport just hours after he had held talks with Belarusian Prime Minister.

The arrest comes three weeks after potash player Uralkali severed links with its Belaruskali triggering a crash in the prices of global manufacturers of the fertiliser.

Under the charge Baumgertner could face between three and 10 years in jail.

The Belarussian Investigative Committee said it was also investigating Suleiman Kerimov, the billionaire owner of Russia premier league team Anzhi Makhachkala and a major Urakali shareholder for unlawful activities.

Lightning Ridge rebuttal

The Lightning Ridge Miner’s Association says the New South Wales government should let miners have the same right as landholders to appeal compensation rates.

According to ABC News, the government has released its final response to the 2011 Wilcox report that made a range of recommendations to deal with disputes between the opal mining and farming communities in Lightning Ridge.

The association’s Maxine O’Brien said landholders would be able to appeal compensation rates if they felt they were too low, but miners should also be able to complain if they are too high.