News Wrap

IN THIS morning’s News Wrap: Japanese traders selling coal stakes; US railroads feel the pinch; and a coal-to-gas rush warning.

Noel Dyson

Japan coal sell-out

Japanese trading houses Itochu Corp and Sumitomo Corp are looking to sell a stake in an Australian coal project.

According to the Wall Street Journal the two trading houses have hired advisers to sell a combined 45% interest in the Glencore-run NCA project, which includes the Newlands and Collinsville mines in central Queensland and access to a berth at the Abbot Point coal terminal.

The Newlands and Collinsville mines produce up to 17 million tonnes of thermal coal and coking coal.

Railroaded

US railroad operators, who invested heavily in their networks when coal was a hot commodity, are feeling the pinch now the fuel is not so hot.

The Financial Times reports that coal haulers have been quick to pick up on the new kid on the block – shale gas and oil – but that has led to its own problems.

The FT article cites the packed Lamberts Point coal terminal in the US as a case in point. Here the cars are packed in tight because the need to move shale gas and oil has created congestion at other points of the line.

With coal in decline the railroad operators are being forced to look at further investment.

Coal-to-gas rush warning

Reuters reports that China has warned operators against “blindly” developing projects to turn coal into synthetic fuel, citing the need for appropriate regulatory approvals.

The news wire cites a warning – published by the National Energy Administration on its website (www.nea.gov.cn) – which came days after plans to produce billions of cubic metres of gas from coal were described by a top government researcher as “irrational”

The government bans coal-to-gas plants that would produce less than 2 billion cubic metres a year and coal-to-oil projects smaller than one million tonnes a year, according to the NEA document.

Even projects meeting those guidelines must get approval from the State Council, China’s cabinet, before construction can begin, it added.

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