...The Coal Resource: A Comprehensive Overview of Coal 13 SECTION THREE THE GLOBAL COAL MARKET >> Coal is a global industry, with coal mined commercially in over 50 countries and coal used in over 70. >> Major Coal Importers, 2003 (Mt) Japan Republic of Korea Chinese Taipei Germany UK Russia India USA Netherlands Spain 162 72 54 35 32 24 24 23 22 22 The world currently consumes over 4050 Mt of coal. Coal is used by a variety of sectors – including power generation, iron and steel production, cement manufacturing and as a liquid fuel. The majority of coal is either utilised in power generation – steam coal or lignite – or iron and steel production – coking coal. Coal Consumption Coal plays a vital role in power generation and this role is set to continue. Coal currently fuels 39% of the world’s electricity and this proportion is expected to remain at similar levels over the next 30 years. Consumption of steam coal is projected to grow by 1.5% per year over the period 20022030. Lignite, also used in power generation, will grow by 1% per year. Demand for coking coal in iron and steel production is set to increase by 0.9% per year over this period. The biggest market for coal is Asia, which currently accounts for 54% of global coal consumption – although China is responsible for a significant proportion of this. Many countries do not have natural energy resources sufficient to cover their energy needs, and therefore need to import energy to help meet their requirements...
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...MISBAHHUDDIN 207785 NUR AMALINA BT ABD GHANI 207791 SUBMISSION DATE : 06 OCTOBER 2013 Table of Contents 1.0 INTRODUCTION 4 2.0 MAIN ISSUE 5 3.0 FINDINGS 7 4.0 STANDARD COST 12 5.0 RECOMMENDATION 13 6.0 CONCLUSION 15 1.0 INTRODUCTION Tan Min Yi who was the general manager of Luotang Power, a coal-fired power plant located in central China. He should make a presentation to the Board of Directors of his parent company, China Hua Tong Power (HT Power). Tan knew that his company had performed well during that year, both plant availability and fuel economy improved over the previous year but it just didn’t show up in the financial report. Hubei Provincial Power Company (HPPC) was the primary customer of Luotang that had made a contract for a minimum annual purchase of total electricity of 3,000,000MWh every year. However, there had been limited opportunity to sell energy above the contractual minimum, either to HPPC or others. If the amount of sell would be reduced, the contract required that Luotang sell amounts in excess of minimum annual purchase at approximately 65% of regular price. Luotang also made a contract with coal supplier, Pingdingshan. The company had been successful at selling excess electricity to the power plant but over the past 12 months, demand has decreased. This happen because by falling revenues were concentrate by the high debt burden that the project carried, with approximately 80 percent of the initial construction cost being...
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...Introduction This case study Luotang Power: Variances Explained is mainly concerned with a study of variances that will show the changes in performance in the company and the external environment that is not within the power plant’s control. The Luotang Power Company (Luotang) is a 600 Mega Watt (MW) coal fired power plant located in the Hubei Province, China. Luotang first started in 1997, when the Provincial Planning Commission, working on behald of the Hubei Provincial Government, had solicited bids from international power developers to finance, design, build, and poerate a 600MW coal-fired power plant. The project was contracted on a Build Operate Transfer (BOT) Basis, that meant that the power plant would be given to the Hubei Provincial Government after 20 years of operation at no cost. Luotang was mainly rural in nature but development quickly increased when the power plant opened. Luotang is wholly owned by an American independent power producer. Luotang’s parent company is known as China Hua Tong Power (HT Power). It’s primary customer is the Hubei Provincial Power Company (HPPC) and their main coal supplier was the Pindingshan Coal Company (Pindingshan). Tan Min Yi has been the general manager of the Luotang Power Company since 2002. In this case study, it talks about how Tan has to make a presentation to the Board of Directors of Luotang’s parent company, that is HT Power about the results received in the 2011 Report of Operations. He is concerned about what...
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...China. The plant was designed, and constructed to operate as a 600 MW coal-fired plant, and is contracted on a Build Operate Transfer (“BOT”) basis; meaning the plant would be given to the Hubei Provincial Government at the conclusion of 20 operational years at no cost. Although it is a coal-fired plant, the emissions meet Chinese standards, making Luotang one of the least polluting coal-fired plants in the country (for its size). During the 20 year operational period, the Luotang plant is contracted to sell power to the Hubei Provincial Power Company (HPPC) at approximately 65% of the regular selling price. The plant has also negotiated a coal supply contract with Pingdingshan; where they are to supply low sulfur bituminous coal that meets quality specifications for a fixed price per tonne (adjustments for inflation built in). Unfortunately, Luotang has been receiving coal shipments that are of questionable quality, causing the plant to come under a degree of financial stress. Conclusion We are recommending that the Luotang Power Plant to rework terms of their coal-purchasing contract. Although the quality of the coal has slightly risen over the past year, the inflationary price exceeds its quality. We propose a purchasing contract where the price of the coal is determined by the energy output (quality) per tonne. Our recommendation for the company was thought through on the assumption that coal quality was the primary factor as to why the plant has been experiencing...
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...learned about Cloud Peak Energy thus far, it’s that they pride themselves on being the best. For this reason, and many others that I will discuss here, I believe that their specific positioning method is attributes. The moment you visit their webpage you are bombarded with the many ways that they pride themselves on being the best at mining coal. The first thing they claim is that they one of the safest and largest producers of high quality coal in the United States. According to their 2011 Annual Corporate Report of the 1 billion tons of coal produced in the United States which generated 43 percent of the nation’s electricity in 2011, Cloud Peak contributed to 4 percent of that. Unfortunately, they suffered from 17 reportable injuries in 2011. However, they were fairly minor in nature and they claim to still keep safety as a core value and hope to achieve a goal of zero injuries in the future. These injuries gave them a Mine Safety and Health Administration (MSHA) All Injury Frequency Rate (AIFR) of 1.18, which was quite an increase from 0.58 the prior year. Yet, they are told by MSHA that this rating is among the lowest of the large US coal producers. In our society today many of us feel that it is important to take care of our environment. Cloud Peak Energy recognizes the importance of this as well. In 2010 they were the recipient of the National Excellence in Surface Mining and Reclamation Award from the Office of Surface Mining. Additionally, in June of 2011 they were awarded...
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...Company (“HPPC”), had met its contractual electricity purchase obligations for the year. However, there had been limited opportunity to sell energy above the contractual minimum, either to HPPC or others. Still, Tan felt that these factors were outside his control. His team had performed well—it just didn’t show up in the financial results. The scheduled presentation to the Board was important for two reasons. First, HT Power was considering a 2,000 MW expansion at Luotang. However, on a more personal note for Tan, he had been general manager of Luotang since 2002, and he hoped it would be time for a promotion. He hoped that HT Power would consider him for the company’s Executive Vice President position. He also knew how critical fuel price management was to HT Power’s success but wasn’t completely sure how well his team had managed this aspect of the business during the year. Would HT Power pass 1 One megawatt (MW) is equivalent to 1,000 kilowatts (KW). A one megawatt...
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...Coal India IPO - The Mother of All IPOs Abstract:Coal India Limited (CIL), a Navratna PSU and the largest coal producing company in the world, came up with an Initial Public Offering (IPO) in October 2010, the biggest in the history of the Indian stock market. The IPO sought to raise funds close to INR 1,500,000 million by selling 631.63 million equity shares. Prior to this, the Reliance IPO had been the biggest IPO ever. The price band of the IPO was fixed at INR 225-245. Though the response from various stakeholders to this price band was divided, the issue was highly successful in terms of the response from investors and was oversubscribed by 15.28 times. The highest oversubscription, at 25.4 times, came from non-institutional investors. CIL was listed on November 4, 2010. In keeping with expectations, it was listed at a price of INR 287.75 and closed at a price of 342.35 on the BSE with the huge turnover of INR 63,241 million proving its tremendous success. Introduction:In October 2010, Coal India Limited (CIL), the largest coal producing company in the world, came up with the biggest ever Initial Public Offering (IPO) in the history of the Indian stock market to raise funds close to INR 1,500,000 million. CIL, given an IPO grading of 5/5 , offered 631.63 million equity shares through the IPO. Prior to this, Reliance Power Limited had been the mega IPO in the Indian stock markets, raising INR 115,000 million in 2008 by selling 260 million shares. In June 2007, real...
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...Case Analysis Luotang Power Company Background Luotang Power Company is a 600 Mega Watt coal-fired power plant, located in Hubei Province, China, the parent company of which is China Hua Tong Power (HT Power). The major business is to generate electricity by coal burning and sell it to Hubei Provincial Power Company (HPPC), the major customer which is the only power transmission and distribution company in Hubei Province. Whereas the coal is purchased from Pindingshan Coal Company who is required to supply low sulfur bituminous coal that meets certain quality specifications. Regardless of the improved plant availability and fuel economy, the company wasn’t performing well for the financial result. A variances analysis indicated that the poor performance was due to a combination of shrinking revenue, increasing price of the coal and decreasing quality of the coal. Company analysis Macroeconomic analysis A PESTE framework including political, economic, social, technological and environmental factors is used to contextualize the company in an industry framework. Economic aspect: China is the world second largest energy consumer behind the United States. The energy consumption has been boosted by strong economic growth over the past two decades. Its electricity consumption is influenced by fluctuations in the GDP growth. (Appendix1) Hubei led the four provinces fed by the central China grid with a 13.8% rise in economy and is said to be doubled in the next five years...
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...Industry Analysis- Coal Mining With respect to Duke energy and energy usage. Coal mining in the US continues to show growth even when coal consumption in the US continues to drop. Coal use for energy is decreasing at an increasing rate due to natural gas prices increasing and the country pushing for clean energy. http://mjperry.blogspot.com/ Natural Gas and Coal have come to an even total in use for America’s energy needs, which will continue to diminish this mature coal-mining market. Coal is also diminishing in value because of the greenhouse gasses coal emits when in use. Coal. is an extremely “dirty” energy source. http://greenworldpics.com This graphic shows the disparity in coal usage and coal CO2 emissions. This disparity is another reason many companies are leaving coal and causing the faster decline coal is experiencing. Coal Production • U.S. coal production in 2011 increased slightly from 2010, driven by export demand, to roughly 1.1 billion short tons. • Production in the Western Region, which includes Wyoming, totaled 587.6 million short tons, a 0.7 percent decline from 2010. • In 2011, productive capacity of coal mines increased by 2.5 million short tons to 1.3 billion short tons. • The average number of employees in U.S. coal mines increased 6.3 percent to 91,611. • Domestic coal consumption of metallurgical coal by the coking industry rose 1.6 percent to 21.4 million short tons. The average sales price of coal increased 15.2 percent...
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...Shanghai episode mirrored a nationwide shortage of electric power. In Beijing, on July 22, 2004, the Municipal Power Supply Bureau imposed the capital’s first brownout of the year, disrupting supply to suburban areas for 47 minutes in the afternoon. The Chinese government has certainly been working tirelessly to resolve the power crisis. Thermal coal is the principal fuel used to generate electric power in China. In July, Premier Wen Jiabao exhorted, “Railway departments should do their utmost for the transport of coal for electricity generation”.2 The Ministry of Railways increased train speed and freight loads, and allocated 90% of freight capacity to transport key materials. In the first half of 2004, Chinese railways shipped 480 million tons of coal, up 12.2% over the same period last year. The Ministry of Communications has also pitched in. It diverted ships from overseas routes to domestic coal transport and approved emergency coal transportation on various roads and waterways. China is the world’s second-biggest coal exporter. In 2003, China exported 93 million tons of coal, including 80.8 million tons of thermal coal. To assure...
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...11159249 11174354 11282047 10679140 Page 1 Table of Contents: 1. Business Description 2. Whitehaven Coal Ltd’s Performance Vs ASX200 Energy Index 2.1 Profitability Ratios 2.2 Asset Utilization Ratios 2.3 Capitalisation Ratios 2.4 Market Ratios 3. Quality of Financial Data 4. Revenue & Profitability Growth Forecast 4.1 Industry Life Cycle 4.2 Sustainable Growth Rate 4.3 Macroeconomic and Technological Factors Affecting Growth Rate 5. Business Risks: Porter’s 5 Forces 5.1 Threat of New Entrants 5.2 Bargaining Power of Suppliers 5.3 Bargaining Power of Buyers 5.4 Threat of Substitutes 5.5 Rivalry Among Existing Competitors 6. Recommendation Pg 3 Pg 3 − 5 Pg 5 Pg 6 Pg 7 − 8 Pg 9 Page 2 1. Business Description ASX Ticker: WHC Current Share Price (5th April 2012) Market Capitalisation Shares Outstanding Revenue from Ordinary Activities FY11 NPAT FY11 Diluted EPS (cents) Whitehaven Coal Ltd is an Australian listed company whose main $5.67 operations involve developing and operating coalmines in NSW. $2, 814m 496m and the development of the Narrabi underground mine. Initial Currently, its focus is on coal production in the Gunnedah Basin resource assessment by WHC projected that the Gunnedah Basin is $622.19m able to support at least 1.5 million tonne per annum (Mtpa) $9.95m production of open-cut coal for the company itself. That makes 2 WHC the biggest coal producer in the Gunnedah Basin. Source: Australian Securities Exchange 2. WHC’s Financial Performance...
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...natural gas, coal, renewables, and uranium (nuclear). One area in particular I want to touch on is the creation of electricity. Therefore for the purpose of this paper I will discuss the advantages, and disadvantages of the resources required to produce electricity, their lifecycles, and economy and trade. Power generation is a viable source of producing electricity, and the fuel to support it. For example: Crude Oil - A small percentage of this resource is used in power generation as compared to other sources . Crude oil is pumped from underground reservoirs by drilling rigs, and refined . After the refining process its then transported by ships, pipelines, trucks, or trains for consumption or storage at chosen power plants. At the power plant the crude oil is used in different ways for fuel; such as burning the oils and using combined cycle technologies to produce steam which moves the turbines within the plant. Combined cycle technology is the most efficient way to burn oil at the power plant. The use of crude in power generation does not come free, and it must be purchased in the commodities market at the best price available so the utility can resell it to the consumer at an affordable price. To achieve this price energy traders must enroll in an exchange traded crude oil future contract. This contract binds the utility to take delivery of a specific amount of crude oil at a predetermined price which helps consumers and producers manage the price risk of the...
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...------------------- 8 7. References-------------------------------------------------------------------------------------- 10 Company Profile Teck Resources Limited, formerly known as Teck Cominco Limited, was formed in 2001 following the merger of Cominco and Teck Corporation. It is a Canadian based integrated mining, mineral processing and metallurgical company. Seven years ago in 2001(1) when the Teck Cominco merger was completed, two strong Canadian companies with a tradition of excellence in mining and metal refining were brought together. In October of 2008 (1), the management of the company announced the launch of a simplified brand name, Teck, and the formation of five business units specializing in copper, metallurgical coal, zinc, gold and energy. The company has expertise across the full range of activities related to mining, including exploration, development, smelting, refining, safety, environmental protection, product stewardship, recycling and research. Presently they are actively exploring in countries throughout the Americas, Asia Pacific, Europe and Africa. The company’s product portfolio comprises of...
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..._r=1&partner=rssnyt&emc=rss Page 6 http://articles.chicagotribune.com/2010-07-10/news/ct-met-coal-plant-online-sidebar-20100710_1_coal-plant-coal-fired-peabody-energy Page 7 http://www.chicagotribune.com/health/ct-met-dirty-power-plant-20100918,0,6593923.story As Europe Kicks Coal, Hungarian Town Suffers Miners in Hungary-what to do with cities,industries, states dependent on coal as Ohio,West Virginai, Utah,etc. As countries endeavor to reduce their fossil fuel emissions, many are trying to wean themselves from over-reliance on coal, the most highly emitting fuel. But coal is also the lifeblood of communities from Hungary and Germany to Kentucky and West Virginia, providing jobs, power and warmth. Figure 3: World wind resource map with installed capacity and production data for leading countries 3 180 0 6.9 19.3% 25 170 8 358 52.4 1.9% Denmark United States 12 210 6 300 8.8 n/a 3 241 836 7.1 1.3% China United Kingdom India 9 645 1 800 11.6 n/a Portugal 2 862 712 5.7 11.3% Cumulative installed GW in 2008 Additional capacity in 2008 TWh from wind energy in 2008 Share of wind in electricity production in 2008 Note: 80 m height and 15 km resolution. Source: Resource data from 3Tier; production and capacity data from IEA, IEA Wind Of the 7 technologies listed in the table for generating electricity, coal is second only to natural gas as the cheapest technology in market price. But when externalities...
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...nuclear power as a means of providing for the world’s energy needs. Discuss the implications for Australia’s mining industry? Australia is the world’s largest coal exporter and has the second largest deposit of coal in the world. Although the world is currently in the throes of a global financial crisis, Australia’s economy one of the few in the developed world to stay afloat has been buoyed considerably by its exports industry, particularly that of coal. Despite Australia’s promise to reduce carbon emissions by 5% in accordance with its commitment to the Kyoto protocol, the coal industry has been lucky enough to avoid almost all penalties that other industries are set to receive under the proposed carbon emission trading scheme . This combined with Australia continuing to stall further international discussions on combating climate change has earned Australia the reputation of “A nation of climate sinners” . It is obvious that despite a lot of rhetoric on the importance of addressing climate change, the Australian government is not willing to commit to solving the global challenge of climate change to an appreciable degree while such a large part of the Australian economy is at stake. For the Australian government to fully commit to its promises on combating climate change, a way to free the Australian economy of its coal dependence needs to be found. The world is in a new era of energy production where it is no longer a question of which energy technology will prevail, but rather...
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