A Safe Mine Is an Efficient Mine. End of Story

WORLD COAL

®

FEBRUARY 2013 FEBRUARY 2013 - VOLUME 22 NUMBER 02

A SAFE MINE IS AN EFFICIENT MINE. END OF STORY. www.energyglobal.com Thoralf Klehm, vice managing director at the Polish coal mine PG Silesia, is responsible for the safety of the employees and that productivity increases are on track. HOW DID PG SILESIA IMPROVE BOTH SAFETY AND PRODUCTIVITY? THIS WAY!

When you are in the mining business, you know that an improved safety record means a lot to your employees, their families and your company. This safety mind-set is part of everything we do – from research and product development to on-site service.

Read the story about PG Silesia and join the movement towards The Future of Mining. It´s This Way: sandvik.com/thisway COVER INFORMATION Trolex manufactures hazardous area safety and control systems designed to improve production effi ciency, protect people and valuable assets and safeguard the environment. Trolex products are used extensively throughout the mining, tunnelling, industrial and rail sectors, are intrinsically safe, carry independent accreditation and are at the forefront of safety and condition monitoring technology. With its in-depth technical expertise and over 50 years experience, Trolex sensors and systems are relied upon wherever safety is critical. For more information, please visit: www.trolex.com

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5 Coal News

14 Industry View: Effective Risk Management: Making It Personal Loren Padelford, Active Risk, US.

86 Product News

Regional Report: Canada 51 More For Less Dr John C. Stankus and Kevin J. Ma, Keystone Mining Services LLC 16 Along A Bumpy Road (an affiliate of Jennmar Corp.), US. Canada’s coal sector already contributes C$ 5.2 billion to its GDP, with over 42,000 people either directly or indirectly employed by the 59 NO Problems industry – and has the potential for further growth. Gordon Cope G.B. Keller and L. Pennisi, Airflow Catalyst Systems, US. reports on the challenges and opportunities that lie ahead. 63 Dynamic Dust Suppression North American Manufacturers Review 2013 Dipl.-Ing. Leonardo Gonzalez and Dipl.-Ing. Egmont Lammer, Sandvik Mining and Construction GmbH, Austria. 22 North American Manufacturers Review 2013 World Coal offers its annual look at the major North American 66 Making Waves manufacturers of equipment for the mining, handling and Mike Roper, Vital Alert Communication Inc., Canada. processing of coal. 71 Holistic Fire Protection 44 The Rocky Road To Recovery Mike Stromberg, Tyco Fire Protection Products, US. The SME Annual Meeting & Exhibit returns to Denver this year. Lauren Bryant previews the show, which takes place at the Colorado Convention Center on 24 – 27 February, the city and the 75 Lost & Found prospects for the US coal industry in 2013. Philip Shaw, SureWave Technology, UK. 81 To Grout Or Not To Grout? Underground Health & Safety Brad Crenshaw, P.E. P.G., Ground Engineering Contractors, Scott Langley, White Oak Resources LLC, Vic Daiber, P.E. P.L.S., 49 Move Over Canary Pittman Mine Services LLC, and Donald Rigby, Stan Curtis, Trolex Ltd, UK. Avanti International, US.

World Coal (ISSN No: 0968-3224; USPS: 020-997) is published monthly by Copyright © Palladian Publications Ltd 2013. All rights reserved. No part of this publication may be Palladian Publications Ltd GBR and distributed in the USA by SPP, 17B S Middlesex Ave, reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, Monroe, NJ 08831. Periodicals postage paid at New Brunswick, NJ. Postmaster: send address mechanical, photocopying, recording or otherwise, without the prior permission of the copyright changes to Palladian Publications, 17B S Middlesex Ave, Monroe, NJ 08831. owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither does the publisher endorse any of the claims made Annual subscription (monthly) £110 UK including postage, £125/E175 overseas (airmail), $175 in the advertisements. Printed in the UK. Uncaptioned images courtesy of www.bigstockphoto.com. US/Canada (airmail). Two-year discounted rate (monthly) £176 UK including postage, £200/E280 overseas (airmail), $280 US/Canada (airmail). Claims for non-receipt of issues must be made World Coal is a fully-audited member of the Audit Bureau of Circulations (ABC). within four months of publication of the issue or they will not be honoured without charge. An audit certifi cate is available from our sales department on request. PEOPLE We believe our fundamental strength lies in the quality of our people.

Milwaukee, WI USA | www.joyglobal.com Jonathan Rowland Editor

f anyone had any doubts that mining was an uncertain Caterpillar has also been stung by a US$ 580 million writedown business, events of the recent months would quickly on its acquisition of ERA Mining Machinery Ltd and its dispel them. Tom Albanese, CEO of Rio Tinto, has been subsidiary, Zhengzhou Siwei Mechanical & Electrical the latest casualty, after the company announced an Manufacturing Co., a maker of roof-support equipment for eye‑wateringI US$ 14 billion writedown of its aluminium and underground coal mines in China. The Peoria‑based company Mozambique coal businesses. Cynthia Carroll, CEO of was apparently the victim of a massive fraud, although it is Anglo American, will depart in April after her five years in the unclear how the company and its advisors failed to pick this up hot seat have seen the company’s value drop by 28%, while during due diligence (see “Caterpillar takes a US$ 580 million BHP Billiton is also seeking a replacement for its CEO, writedown on investment”, p. 8). Marius Kloppers, although no time frame has been given for his The choppy waters through which the mining industry departure. must now navigate call for a new leadership style. The days of As the mining industry settles into the swashbuckling empire builder leaner times, it is paying for its past have passed: the mining industry extravagances. In addition to Rio Tinto, now needs steadier pairs of hands Anglo American has been forced to that can chart the way through swallow a US$ 4 billion writedown on As the mining economic weakness, increased its Minas-Rio iron ore project in Brazil political interference and – and may never recoup the eventual industry settles ballooning project costs without project costs, which are currently running aground. projected to be US$ 8.8 billion. into leaner times, it For those up to the challenge, BHP Billiton is in the best shape, but there are signs the storms might this is perhaps more luck then is paying for its past be weakening. In its 2013 forecast, judgement: the failed acquisition of Caterpillar said it expects Rio Tinto then the attempted merger extravagances. stronger growth in China in with its rival’s Australian iron ore H2 2013 for annual growth of business, as well as the failed bid for 8.5% (compared to the Canada’s Potash Corp., now seem like International Monetary Fund, bullets dodged. All the same, it has still which expects 8.2%; growth in taken a US$ 2 billion writedown on its US shale gas assets. 2012 was 7.9%). “It is not going to be a 2010 – 2011 boom in As the mining houses have faced up to the new reality, so too China, but [rather] an improvement from this year that should the equipment suppliers. A number of these have reduced their be good for commodity prices and, as important, it should be earnings forecasts for 2013 on the back of weak demand in better for commodity demand,” said Michael DeWalt, North America and Asia, including Caterpillar and Joy Global Caterpillar’s corporate controller. For an industry that is feeling (see “Mining equipment suppliers expect a tough 2013”, p. 5). a touch seasick at the moment, that is good news.

Palladian Publications Ltd Managing Editor Advertisement Manager Reprints/Marketing Assistant 15 South Street, Farnham, [email protected] [email protected] [email protected] Surrey, GU9 7QU, UK Editor Production Website Editor [email protected] [email protected] [email protected] t: +44 (0)1252 718999 Assistant Editor Circulation Manager Correspondents f: +44 (0)1252 718992 [email protected] [email protected] Barry Baxter Gordon Cope w: www.energyglobal.com Advertisement Director Subscriptions Michael King Ng Weng Hoong e: [email protected] [email protected] [email protected] Publisher Nigel Hardy The problem? Pump hoses were getting chewed up at Barrick Gold’s Lawler operations near Kalgoorlie, Australia. Sometimes failing after just ten days on the job. Fact is, the hoses weren’t tough enough to handle the abrasive sulphides. Then they turned to Weir Minerals for something that was. Hoses with Linatex® latex lining. Now they’re going 12, 16, even 18 months without maintenance. Linatex® latex liners simply outwork and outlast anything that they had tried before.

Turning rubber into gold. A job-report from Barrick Gold

And turning gold into profi t. no hose “patch jobs” and increased It adds up to over $700,000 savings safety. And big cost savings. R&D. For a real world. ® per year in production costs for “The long life, the monitoring Linatex liners are a product of the Weir Minerals Advanced Research Center in Barrick. Plus, the exclusive Wear capability and the quality of the Malaysia. It’s where we simulate the Indicator Technology has turned hoses set them apart from the rest,” toughest mineral processing conditions maintenance from a reactive process says Maintenance Planner Dave on the planet. And build products ® into a totally predictive one. Long. Material Matters.™ And at accordingly. Linatex liners are 95% latex for superior resistance to cutting, It’s a built-in early warning system, Barrick Gold’s Lawler plant, what tearing and abrasion. And when they ® featuring a wireless transmitter that matters most is Linatex liners from do start to show wear, they even tell sends wear information to a remote Weir Minerals. For them, it’s the you about it. In advance. With a built-in ™ receiver, ensuring fewer shut downs, gold standard. wear indicator. Material Matters . In everything we do. And it all starts at our Advanced Research Center.

To learn more about this story and other Weir Minerals products, visit whatismaterialmatters.com

Copyright © 2013, Weir Slurry Group, Inc.. All rights reserved. LINATEX is a registered trademark of Linatex Ltd; MATERIAL MATTERS and the M2 Material Matters logo are trademarks of Weir Minerals Europe Ltd; WEIR is a registered trademark of Weir Engineering Services Ltd. Aspects of the Wear Indicator Technology described in this publication are protected by patents pending and registered. INTERNATIONAL Mining equipment suppliers expect a tough 2013

eakness in key markets in Asia has forced a China’s economy will continue to improve, but also noted a fall in demand from the coal and iron W number of equipment manufacturers to not to the growth rates of 2010 and 2011. We also ore sectors in Australia. revise their forecasts for 2013, following remain concerned about Europe and expect Australia was also a disappointment for Joy Global’s downward revision of its 2013 economies in that region will continue to struggle Sandvik Mining, which noted that demand for outlook at the end of last year. in 2013,” said Doug Oberhelman, Caterpillar’s new equipment was particularly poor due to Caterpillar, the largest mining equipment chairman and CEO. ´EXVLQHVVFRQGLWLRQVXQIDYRXUDEOHIRUPLQLQJ VXSSOLHUVDZ4SURÀWVGURSE\WR Despite this, Caterpillar still posted record V\VWHPVµ,WLGHQWLÀHG&KLQHVHDQG$XVWUDOLDQ 86PLOOLRQIURP86ELOOLRQLQ4 HDUQLQJVRI86ELOOLRQLQD coal and iron ore mines as contributing the most This includes the writedown from its recent LQFUHDVHIURPWKH86ELOOLRQLQ3URÀW VLJQLÀFDQWIDOORIILQRUGHUV2UGHULQWDNHZDV acquisition of ERA Mining Machinery Ltd, but ZDVXSWR86ELOOLRQ GRZQFRPSDUHGZLWK4WR DOVRUHÁHFWV´ORZHUVDOHVDQGUHYHQXHVDQGWKH Caterpillar’s Japanese rivals, Komatsu and 86ELOOLRQGHVSLWHVHFXULQJDPDMRURUGHU cost impact from sharply lower production and Hitachi, have also suffered from weakness in core IURP6DVRO0LQLQJ 3W\ /WGIRULWV6KRQGRQLPLQH the US$ 2 billion decline in Caterpillar inventory”. $VLDQPDUNHWV$IWHUSRVWLQJDGURSLQ PDWHULDOVKDQGOLQJSURMHFWLQ6RXWK$IULFD 7KHTXDUWHUDOVRVDZWKHÀUVWGHFOLQHLQUHWDLO SURÀWVLQ4.RPDWVXKDVFXWLWVDQQXDO Returning to Caterpillar, the company was able machine sales in more than two and half years as SURÀWIRUHFDVWE\WR

AUSTRALIA Vale to acquire remaining shares in the Belvedere coal project

razilian mining giant Vale will acquire RIWKHSURMHFWVLQFH9DOHDOVRDJUHHGWRSD\ early stages of development but, according to BWKHUHPDLQLQJRIWKH%HOYHGHUH $8PLOOLRQ 86PLOOLRQ WRVHWWOHOHJDO preliminary estimates, has the potential to reach FRDOSURMHFWWKDWLWGRHVQRWRZQIURP proceedings relating to the dispute. Overall, a production capacity of up to 7 million tpa of $TXLOD5HVRXUFHV/WGIRU$8PLOOLRQ Vale will have paid around US$ 338 million for PHWDOOXUJLFDOFRDO&RDOIURPWKHSURMHFWZLOOEH 86PLOOLRQ DIWHUERWKFRPSDQLHVDJUHHG WKHSURMHFWZKLFKLVORFDWHGLQWKHVRXWKHUQ H[SRUWHGIURPWKHQHZ:LJJLQV,VODQGFRDO to abide by an independent valuation. The two Bowen Basin region, near the city of Moura in terminal, which is expected to be completed in companies have been in dispute over the value 4XHHQVODQG$XVWUDOLD7KHSURMHFWLVVWLOOLQWKH 

February 2013 | World Coal | 5 AUSTRALIA Coal transport network disrupted by flood waters DIARY DATES

he eastern coast of Australia is once again force majeureDWLWV.HVWUDOFRDOPLQH5LR7LQWR Coaltrans Asia Coal Trading Forum T suffering the effects of extreme weather as has also announced that its production of 20 – 21 February 2013 Cyclone Oswald brought heavy rain and DOXPLQDLQ4XHHQVODQGZDVEHLQJUHGXFHGGXH Singapore www.coaltrans.com/act ÁRRGLQJWR4XHHQVODQGDWWKHHQGRI-DQXDU\ WRWKHUDLQDQGÁRRGLQJ0HDQZKLOH$XVWUDOLDQ At the time of writing, six people had miner Wesfarmers has cut its full year coal sales Coal Mongolia 2013 been reported killed and thousands had been IRUHFDVWIRUEODPLQJWKHÁRRGVDVZHOODV 21 – 22 February 2013 Ulaanbaatar, Mongolia forced to evacuate their homes as the severe ZHDNHQHGGHPDQGLQ$VLD www.coalmongolia.mn ZHDWKHUPRYHGIURP4XHHQVODQGLQWR The disruption comes two years after the 1HZ6RXWK:DOHV$XVWUDOLD·VFRDOLQGXVWU\KDV FDWDVWURSKLFÁRRGLQJLQHDUO\WKDWVDZ SME Annual Meeting & Exhibit been affected as exports have halted and large RYHUSHRSOHNLOOHG&RDOPLQHVZHUHÁRRGHG 24 – 27 February 2013 Denver, US parts of the rail transport network have been DQGPXFKRIWKHFRXQWU\·VFRDOSURGXFWLRQIRU www.smenet.org FORVHG WKHUHVWRIWKH\HDUZDVZLSHG$WWKDWWLPH VISIT US AT: BOOTH 2331 Coal export loadings at Dalrymple Bay were spot prices for metallurgical coal hit a record Geostats Rendezvous cancelled due to the rough weather and the US$ 300/t because of the damage to mines and 26 – 27 February 2013 Blackwater and Moura rail lines were closed, WUDQVSRUWQHWZRUNV3ULFHVDWWKHHQGRI Perth, Australia DFFRUGLQJWR$XUL]RQWKHQHWZRUNRSHUDWRU -DQXDU\ZHUHKROGLQJVWHDG\DWDURXQG www.geovariances.com/en/events Xstrata, a major producer and exporter of 86W Power Industry North Africa thermal and metallurgical coal, declared Industry sources have said that, while 27 – 28 February 2013 force majeure on a number of coal shipments as transports systems have been hit, they are Casablanca, Morocco www.powerindustry-events.com it was unable to deliver coal to the hopeful that mine operations will not be Port of Gladstone and Rio Tinto has declared DIIHFWHGE\WKHFXUUHQWURXQGRIEDGZHDWKHU Asia Mining Congress 12 – 15 March 2013 Singapore INTERNATIONAL Ventyx: safety is mining industry’s biggest challenge www.terrapinn.com/asiamining

entyx, a subsidiary of ABB and supplier remains cautious about the strength of global bauma 2013 of industrial enterprise software, has HFRQRPLFUHFRYHU\,QUHVSRQVHPDQ\PLQLQJ 15 – 21 April 2013 V Munich, Germany released the results of its third annual organisations have begun looking inward, www.bauma.de Mining Executive InsightsVXUYH\%DVHGRQLQSXW HVSHFLDOO\LQUHJDUGWRWKHODERXUPDUNHW,Q VISIT US AT: HALL C2 BOOTH 519 from 374 mining companies, the survey asked doing so, they have shifted their focus from World Clean Coal Week – India Focus respondents about the top challenges facing the ÀQGLQJTXDOLÀHGZRUNHUVDQ\ZKHUHDWDQ\FRVW 18 – 19 April 2013 mining industry, as well as their opinions on to ensuring the workforce they currently have is New Delhi, India automation and asset management, safety and HIÀFLHQWZHOOLQIRUPHGDQGVDIHµ www.szwgroup.com/wccwindia2013 GHPDQG Mutsaers continued: “At the same time, Power Industry Middle East The top ranked challenge facing the mining these companies are not seeing a tradeoff 22 – 23 April 2013 industry in 2012 was “ensuring workforce EHWZHHQZRUNHUVDIHW\DQGSURÀWDELOLW\,Q Abu Dhabi, UAE www.powerindustry-events.com safety” with 31% of respondents identifying this other words, the same technologies and best when asked about their current priorities by practices that improve safety also improve 3rd Annual Coal Upgrading & Conversion OHYHORILPSRUWDQFH7KLVZDVIROORZHGE\ SHUIRUPDQFHDQGHIÀFLHQF\7KHVWXG\ 23 – 26 April 2013 Singapore “managing capital projects” (25%), which demonstrated how closely mining executives www.coalupgrade.com PRYHGXSVLJQLÀFDQWO\IURPSUHYLRXV\HDUV FRUUHODWHZRUNHUVDIHW\DQGPLQHSURGXFWLYLW\ and “maximising production effectiveness” When asked to identify their primary safety Coal Prep 2013 29 April – 2 May 2013  ´5HFUXLWLQJDQGUHWDLQLQJDVNLOOHG initiatives, nearly two-thirds of respondents Lexington, US ZRUNIRUFHµGURSSHGVLJQLÀFDQWO\LQWKLV\HDU·V selected ‘development of skills, best work www.coalprepshow.com VXUYH\ZLWKRQO\LGHQWLI\LQJLWDVDSULRULW\ practices and situation-based decision VISIT US AT: BOOTH 326 Respondents were also asked what key areas PDNLQJ·µ CIM 2013 Convention fed into their approach to safety improvement, ,QDVHULHVRITXHVWLRQVIRUWKRVHUHVSRQGHQWV 5 – 8 May 2013 with 64% identifying “development of skills, in the coal industry, the survey also asked what Toronto, Canada http://web.cim.org/toronto2013beta best work practices and situation-based decision the major constraint on growing existing PDNLQJIRUWKHZRUNIRUFHµ RSHUDWLRQVZDV´*RYHUQPHQWDSSURYDOVµ Longwall USA 2013 Commenting on the results, Bas Mutsaers, topped this list with 35%, followed by 11 – 13 June 2013 Pittsburgh, US senior vice president of mining industry “customer demand” (21%), “available reserves” www.longwallusa.com solutions at Ventyx, said: “The mining industry  DQG´PLQLQJFDSDFLW\µ   VISIT US AT: BOOTH 933

6 | World Coal | February 2013 The Grounround Support Companyompany

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CHINA Caterpillar takes US$ 580 million writedown on investment NEWS IN BRIEF

hen Caterpillar bought ERA Mining conducting due diligence on the transaction, W Machinery Ltd and its subsidiary KLJKOLJKWLQJVRPHRIWKHGLIÀFXOWLHVWKDW INTERNATIONAL Zhengzhou Siwei Mechanical & Electrical can accompany accountancy work in China. he proposed merger of Glencore and Manufacturing Co. Ltd last year, it hoped it $WWKHHQGRIODVW\HDUÀYHOHDGLQJ T Xstrata has been approved by the would provide the company with a platform for DFFRXQWDQF\ÀUPV²LQFOXGLQJ'HORLWWHDQG South African Competition Tribunal. growth in the lucrative Chinese market. That Ernst & Young – were charged by the The merger is now awaiting approval platform is now looking shaky: the global heavy US Securities and Exchange Commission for from China. equipment manufacturer announced a violating securities law for refusing to produce “goodwill impairment charge” of paperwork related to investigations into INDONESIA US$ 580 million on the acquisition after accounting fraud at nine Chinese companies. oeclerici has secured a uncovering what it describes as “deliberate, However, the companies argue that, had they US$ 57.8 million loan for multi-year, coordinated accounting misconduct” done so, they would have been in breach of C investments in Indonesia. The loan, at Siwei. Chinese law. provided by European banks and The charge represents two-thirds of the Caterpillar is also not the only mining guaranteed on 50% by SACE, the Italian original acquisition price of US$ 886 million. As equipment supplier that has invested in a credit agency, will enable Coeclerici to a result, several senior managers at Siwei have Chinese company in the hopes of breaking EX\IRXUÁRDWLQJWUDQVKLSPHQWVWDWLRQV been removed and a new management team put into that lucrative market. Joy Global has that will tranship coal from mines on in place. “The actions carried out by these spent more than US$ 1 billion acquiring Borneo island to offshore OGVs. individuals are offensive and completely International Mining Machinery (IMM), a unacceptable. This conduct does not represent, company with close links to Emory Williams, the EUROPE in any way, the way Caterpillar does business or former chairman of ERA Mining Machinery. how we expect our employees to work,” said Williams owned 9% of IMM when it listed on the ylem Inc., a Swedish manufacturer Doug Oberhelman, Caterpillar’s chairman and Hong Kong Stock Exchange. There had also been Xof dewatering technology, is CEO, in response to the news. talks of a merger between Siwei and IMM. expanding its dewatering pump rental offering across Europe as demand from Despite this, the company has defended its Responding to questions raised by analysts the mining, construction, municipal and decision to acquire Siwei and its strategy to over the IMM takeover, Mike Sutherlin, CEO of industrial sectors grows. The company expand into China: “We continue to believe that Joy Global, said that the company saw “a lot of has also announced that it will be the Siwei acquisition is well aligned with our upside in [IMM]”, and that it was “happy with introducing a new range of submersible strategy to expand our role as a leading the IMM management team and [....] with the dewatering pumps at bauma 2013 in equipment and solutions provider for the integration process.” Munich, Germany, from 15 – 21 April. Chinese coal industry,” said Steve Wunning, “We see IMM as a really important part of Caterpillar group president with responsibility our overall business,” continued Sutherlin, CHINA for resource industries. In a statement, the especially with China showing “early signs of company emphasised that its strategy to expand improvement.” etso has won a contract to its coal mining business in China was Joy Global had previously admitted M supply and install 300 on-off “unchanged”, saying that it was “optimistic GLIÀFXOWLHVZLWKWKHLQWHJUDWLRQRI,00 EDOOYDOYHVDQGFRQWUROEXWWHUÁ\YDOYHV about the underground coal mining equipment which has led some analysts to cut their to Shaanxi Yanchang ChinaCoal Yulin opportunities [in China].” recommendations on the company. In its 2013 Energy & Chemical Co. Ltd. Delivery is due by March 2013. Earlier in January, Caterpillar had celebrated annual report, the Milwaukee-based company The project is listed as a UN Project the opening of two new facilities in Tongzhou, noted that the IMM acquisition “has been a Promoting Clean Coal Technology. Jiangsu province: a proving ground and a large challenge [...] The startup of our integration and wheel loader manufacturing facility that will synergy programmes were offset by the produce the Cat 986 large wheel loader. With weakness in the domestic China coal market. AUSTRALIA these facilities, the company now has 23 existing Volumes were further impacted in Q4 by HP Billiton has donated facilities in China, four new facilities under disruptions related to regime change in China.” AU$ 1 million (US$ 1.04 million) to construction, four R&D centres and three However, the company expects 2013 “to be a B the Red Cross Queensland Flood Appeal logistics and parts centres, employing over recovery year [...] reversing the declines of 2012.” to try to help people affected by the 15,000 people in the country. In other news, Caterpillar also announced the UHFHQWÁRRGVLQHDVWHUQ$XVWUDOLD The writedown has not only embarrassed departure of Luis de Leon, vice president with BHP has around 13,500 employees Caterpillar, but two of the world’s largest responsibility for the mining products division, and contractors working in Queensland, DFFRXQWLQJÀUPV7KHFinancial Times named who had joined Caterpillar following the where it has coal, silver, lead and zinc Deloitte and Ernst & Young as responsible for takeover of Bucyrus International. mining operations.

8 | World Coal | February 2013

MOZAMBIQUE Beacon Hill Resources signs lease for rolling stock WEB HIGHLIGHTS

inas Moatize Limitada (MML), a subsidiary The lease agreement is an important step in the M of Beacon Hill Resources, the owner of the development of the Minas Moatize project and a • Arch Coal releases full Minas Moatize coal project in Mozambique, has SUHUHTXLVLWHIRUREWDLQLQJÀQDOUDLODOORFDWLRQ year 2012 results signed an operating lease agreement with from Mozambique’s rail and port regulator, Thelo Rolling Stock Leasing Proprietary Ltd for Portos e Caminhos de Ferro de Moçambique the provision of rolling stock on the Sena railway &)0 5DLORSHUDWLRQVDUHH[SHFWHGWREHJLQLQ • Vale announces record line, which connects Tete province with the port of Q3 2013. Until then, MML will continue to use coal production in Beira. According to the agreement, MML will trucks to tansport coal to Beira. 2012 OHDVHÀYHORFRPRWLYHVDQGFRDOZDJRQVIRUD Analysts at Cannaccord Genuity, an period of 10 years. MML has also appointed investment bank, called this “a positive sign that • Solid Energy CEO steps RRL Gindrod Locomotives Proprietary Ltd as its a rail access agreement with CFM for the Sena rail services provider. rail line is getting near”. down • Ernst & Young CHINA TKF awarded ship unloader contract in Guangzhou questions vertical hyssenKrupp Fördertechnik (TKF), a The contract is for the supply and installation integration in the steel T German supplier of mining, materials of two chain bucket elevator continuous ship industry handling and mineral processing equipment, has unloaders (CSUs) capable of unloading up to announced that it has won a contract with 1650 tph from ships of 70,000 DWT, and Zhujiang power plant in Guangzhou, China. eventually 100,000 DWT. 7.)SURYLGHGWKHÀUVWVKLSXQORDGHUVIRUWKH The contract was signed last year but was To read more about SODQWLQZKHQLWÀUVWHQWHUHGRSHUDWLRQV announced in January 2013. Delivery and The company will now supply two further ship commissioning is scheduled for the end of 2013, these articles and for XQORDGHUVIRUWKHSODQW·VH[SDQVLRQSURMHFW with operations due to begin in February 2014. more event listings go to:

MOZAMBIQUE FLSmidth wins Moatize equipment supply contract

LSmidth, a Denmark-based engineering VWRFN\DUGFRQYH\RUVUHÁX[FODVVLÀHUVDQG F company, has been awarded a contract to KRUL]RQWDOEHOWÀOWHUV7KHFRQWUDFWDOVRLQFOXGHV supply equipment for the second phase of Vale’s full life cycle support for the equipment Moatize coal mine in Mozambique. supplied. Scan for the The contract, worth an estimated FLSmidth supplied equipment for the US$ 112 million, is to supply material ÀUVWSKDVHRIWKH0RDWL]HPLQH7KLVVHFRQG ENERGY GLOBAL handling and mineral processing equipment, phase will double is current production Get the free mobile app at iPhone/iPad App http://gettag.mobi including a crushing plant, in-plant and capacity.

AFRICA Infrastructure investment essential to capitalise on the continent’s mineral riches

tandard Bank, the largest banking group in David Humphrey, global sector head of DELOLW\WRIXOO\H[SORLWWKHVHUHVRXUFHVLVOLPLWHG S Africa, has estimated that the continent will power and infrastructure for Standard Bank, by infrastructure constraints.” need to construct around 4000 km of new rail said in a news release: “As mining activities in Humphrey estimates that discoveries of OLQHVDQGLQIUDVWUXFWXUHRYHUWKHQH[WGHFDGHDW NH\UHJLRQVH[SDQGPLQLQJRXWSXWLVVWDUWLQJ iron ore in West Africa could attract a cost of around US$ 50 billion, to capitalise on WRH[FHHGH[LVWLQJUDLOFDSDFLW\GHVSLWHRQJRLQJ US$ 25 billion of infrastructure investment in its mineral resource industry. efforts to upgrade and maintain these rail links. WKHQH[W\HDUVZKLOHWKHJURZLQJQHHGIRU Africa’s enormous wealth of mineral Inadequate rail networks are limiting the port and rail facilities and infrastructure in reserves represents both a huge potential economic potential of some of these Mozambique, which boasts reserves of high earner for the continent, as well as a source for commodity hot spots on the continent. There is TXDOLW\FRDOLQFORVHSUR[LPLW\WRWKH$VLDQ global commodity markets. But limited and a lot of enthusiasm about new coal, iron ore market, could bring in US$20 billion. OHJDF\LQIUDVWUXFWXUHLVPDNLQJH[SORLWLQJWKHVH and manganese discoveries in West Africa and $VLWUHPDLQVODUJHO\XQH[SORUHGIXUWKHU UHVRXUFHVDVORZDQGLQHIÀFLHQWSURFHVV Mozambique. Despite this enthusiasm, the resources are likely to be unearthed in Africa.

10 | World Coal | February 2013 know-how | performance | reliability

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perations have successfully begun at FXWWLQJHGJHFDUERQFDSWXUHWHFKQRORJ\:H coal”, and stressed that the UK Government was WKHZRUOG·VÀUVWLQWHJUDWHG62 /CO SULGHRXUVHOYHVLQEHLQJDFRPSDQ\RIÀUVWV committed to helping the industry develop the O 2 2 emissions capture plant in South Wales, UK. and we are proud to be partnered with clean technologies required to reduce emissions. $EHUWKDZDFRDOÀUHGSRZHUSODQWQHDU 5:(QSRZHURQWKLVODQGPDUNSURMHFWLQ:DOHVµ +HDOVRFDOOHGIRUD´VSLULWRIHQWUHSUHQHXUVKLSµ Cardiff in the Vale of Glamorgan, has captured With the successful launch of operations, in the industry to push development of the

LWVÀUVWWRQQHRI&22 at the start of a two year Cansolv is now using the Aberthaw pilot necessary technologies, arguing that the UK had WULDO7KHSRVWFRPEXVWLRQVFUXEELQJ VFKHPHWRLQLWLDWHDQLQGHSWK5 'SURJUDPPH much to gain from exporting clean coal

WHFKQRORJ\LVGHVLJQHGWRFDSWXUHWSGRI&22 to optimise its carbon capture process. The technologies around the world. IURPWKHSODQW·VÁXHJDVHVZKHQUXQQLQJDWIXOO company is also working with the Commenting on the speech, Tony Lodge, capacity – approximately the amount produced UK Environment Agency to evaluate its carbon research fellow at the Centre for Policy Studies, by generating 3 MW electricity. capture technology for further application to told World Coal´7KHPLQLVWHUJDYHD The plant is operated by RWE npower, the FRDOÀUHGSRZHUSODQWVLQWKHFRXQWU\ commitment to coal but in reality what does UK subsidiary of RWE, one of Europe’s leading Matthias Hartung, CEO of RWE Generation, this mean? EU Directives will close a third of XWLOLWLHV7KHSLORWHPLVVLRQVSURMHFWLVMRLQWO\ VDLGLQDVWDWHPHQW´7KHFDUERQFDSWXUHSLORW 8.FRDOSODQWV *: E\DQGWKHQHZ

UXQZLWK&DQVROY7HFKQRORJLHV,QFD plant is another step on the road to giving us 8.FDUERQSULFHÁRRUVWDUWLQJDW W&22 and subsidiary of Shell Group that specialises the choice of technologies we need to create a rising will make generating electricity from in gas absorption solutions. PRGHUQHIÀFLHQWDQGGLYHUVHHQHUJ\SRUWIROLR coal very expensive, so other coal plants will According to a Cansolv press release, the that is capable of guaranteeing continuity of VXUHO\FORVHE\7KLVZLOOVLJQLÀFDQWO\ QHZVFUXEELQJWHFKQRORJ\ZLOOFDSWXUHRI supply, while reducing costs and carbon reduce UK coal burn and coal demand over the all CO2HPLVVLRQVDQG´HVVHQWLDOO\DOOµ622 emissions.” next eight years as the new ‘dash for gas’ takes emissions. The absorbent can also be reused to Elsewhere, John Hayes, the UK energy hold.” PLQLPLVHZDVWHDYRLGODQGÀOODQGUHGXFHFRVWV minister, was keen to stress the continuing The World Coal Association (WCA) Philippe Gauthier, president of Cansolv, said importance of coal to the UK’s energy mix. ,QD /HDGHUV5HFHSWLRQZDVKHOGWRRIÀFLDOO\ LQWKHSUHVVUHOHDVH´7KLVLVDVLJQLÀFDQW speech given at the World Coal Association’s welcome Dr Zhang Xiwu as its new chairman. milestone for Cansolv as it is a clear /HDGHUVKLS5HFHSWLRQKHHFKRHG1\H%HYDQ·V Dr Zhang is chairman of Shenhua Group, demonstration of our innovative and IDPRXVTXRWHWKDWWKH8.LVDQ´LVODQGEXLOWRQ China’s largest coal producer.

CANADA Ups and downs in the Canadian coal-fired power sector

askatchewan Power Corp. (SaskPower), a captures from Boundary Dam to southern Ontario. Since 2003, Ontario has SCanadian utility provider, is planning a Cenovus Energy, a Canadian oil company. UHGXFHGLWVXVHRIFRDOE\DOPRVW7KLV

86ELOOLRQUHÀWRILWV%RXQGDU\'DP Cenovus will use the CO2 for enhanced oil latest announcement will also mean that, by FRDOÀUHGSRZHUSODQWQH[W\HDUDVSDUWRIWKH recovery (EOR). the end of this year, 17 of the province’s FRPPHUFLDOVFDOHWHVWLQJRIDFDUERQFDSWXUH 7KLVJRRGQHZVIRU&&6SURMHFWVHVSHFLDOO\ FRDOÀUHGSRZHUSODQWVZLOOKDYHEHHQVKXW and storage technology (CCS). after the European Commission recently The early closures have been attributed to SaskPower aims to capture 1 million tpa of announced that it had failed to select a winner improvements to Ontario’s electricity grid and

CO2²DURXQGRIHPLVVLRQV²DVZHOODV WRUHFHLYHIXQGLQJIRU(XURSHDQ&&6SURMHFWV LQFUHDVHGHIÀFLHQF\VSXUUHGE\QDWLRQZLGH FDSWXULQJDVLJQLÀFDQWSURSRUWLRQRIWKHSODQW·V casting further doubt on the likelihood of the efforts to reduce greenhouse gas (GHG)

SO2HPLVVLRQVZKHQWKHUHÀWLVFRPSOHWHGDQG technology ever getting beyond the test phase. emissions and improve air quality. the CCS technology comes into operation from ´:HQHHGWKLVDVDQH[DPSOHRI&&6DFWXDOO\ ,IWKHDQWLFLSDWHGFORVXUHVRIWKHUHPDLQLQJ April 2014. The plant’s power output is happening,” said Camilla Svendsen of Zero, a WZRFRDOÀUHGSRZHUSODQWVJRHVDKHDGE\WKH DQWLFLSDWHGWREHUHGXFHGE\DURXQG 1RUZHJLDQHQYLURQPHQWDOJURXS end of 2014, as expected, Ontario will become which SaskPower hopes will prove the However, it was not all positive news from RQHRIWKHZRUOG·VÀUVWSODFHVWRFXWRXWFRDODV commercial viability of the technology and WKH&DQDGLDQFRDOÀUHGSRZHUVHFWRUWKLVPRQWK a power source. reverse the trend that has seen utility providers 2QWDULR&DQDGD·VPRVWGHQVHO\SRSXODWHG &XUUHQWO\RYHURIWKHSURYLQFH·VSRZHU VZLWFKWROHVVSROOXWLQJJDVIRUSRZHU province, has announced that it will close two is generated by water, nuclear and renewable generation. FRDOÀUHGSRZHUSODQWVE\WKHHQGRI²D energy sources. The renewable energy sector Michael Monea, head of SaskPower’s CCS year earlier than expected. saw US$ 12 billion of capital investment in LQLWLDWLYHVHVWLPDWHVWKDWWKHFRVWRIWKHUHÀW 7KH1DQWLFRNHDQG/DPEWRQSRZHUSODQWV 2011, with the Financial Times·I'L,QWHOOLJHQFH will be comparable to replacing it with a new are the province’s largest and the only WKLQNWDQNFDOOLQJ2QWDULR´WKHZRUOG·VOHDGLQJ

JDVÀUHGSODQW6DVN3RZHUZLOOVHOOWKH&22 it UHPDLQLQJFRDOÀUHGSRZHUIDFLOLWLHVLQ UHJLRQIRUUHQHZDEOHHQHUJ\SURMHFWVµLQ

12 | World Coal | February 2013

Author Loren Padelford is executive vice president and general manager of Active Risk. Loren has a broad track record of success in technology and business services. Before joining Active Risk, he was vice president of strategic alliances and global sales director for Dyadem International, an enterprise HSE software provider working with leading mining, oil and manufacturing customers.

EFFECTIVE RISK MANAGEMENT: MAKING IT PERSONAL Loren Padelford, Active Risk, US

ffective risk management in the coal industry simple, valuable and personal to be truly accepted „ What are the real material risks? Only Eis all about people. To succeed, you need to throughout the business. those material risks that impact goals are embed a risk-aware culture and make the risk Health and safety may use a 5 x 5 risk matrix, real. Everything else is interesting but not process simple and relevant so that it becomes while legal and finance prefer a 4 x 4 matrix or necessarily relevant. Care should be taken not part of everyone’s daily job. At the end of the an entirely different method of recording risks. to get caught in the “risk admiration” trap, in day it is people who manage risks, minesites and An ERM solution must be able to handle these which “pet risks” are identified and kept on organisations. They need to see the value for the variations and provide aggregation and roll-up, reports when they no longer have relevance. time they invest into the risk process, both to with scoring and re-scoring at each level, based If a risk does not impact on a goal then look them and to the organisation. Risk management on the different needs. Some risks rated as high at it later – if at all. needs to be made personal to stick. by minesite management may only rate as „ What is being done about real risks? What, This is a great principle with which to start. medium and low at a divisional or corporate who, when, why, how much – all of these However, at every level of an organisation in level. Other risks, rated as medium or low by questions apply. A risk with no plan to the coal industry, the role of risk management individual mines, may become more important at manage it is a ticking time-bomb. will be different and the criteria used to evaluate the corporate level. This higher perspective may „ Is it working? Many operations have controls the results will vary enormously. Corporate make it apparent that the same risks are being in place, but have no idea if they need them management will be interested in risks that reported at multiple sites with potential strategic all, if they need more, or even if the ones are vastly different to those that keep general impact. Using ERM software to automate the they have are working. For example, in 2011 managers at minesites awake at night. But what risk process allows organisations to see risk at there were US$ 350 billion in losses reported effective minesite and corporate risk management different levels, understand the impact of the by businesses around the world, but only have in common is that they should be about risks and focus resources to manage them at the US$ 106 billion were insured. So for many removing surprises. Everyone from the coal appropriate levels and locations. organisations, the insurance they had simply face to the board room should be focused on the did not relate to their real risks. following simple questions: Developing risk-awareness „ What are the real material risks? The difference between risk management and „ What is being done about real risks? risk awareness is immense. In a risk-aware „ Is it working? A RISK WITH culture, risk is part of everyone’s daily activity. NO PLAN TO Most firms would argue that they have a risk Sharing information management “process” or “policy” in place, A typical mine operation will have numerous MANAGE IT IS but a true risk-aware culture means that risk is risk and compliance systems and registers, often A TICKING analysed to a granular level – where it has the using standalone spreadsheets. There will be most impact. risk registers for health and safety, engineering, TIME-BOMB. This means that every single person within maintenance, operations, legal, finance and for an organisation – from the CEO to the newest special projects requiring major investment, but project manager – not only understands often this information is not readily available or in their risks, but implements and uses risk the right format to help each level of the business management on a daily basis. If everyone answer the three questions above. With a standardised ERM solution the understands that their role involves a So how can pertinent risk data get to the right communication and flow of risk data is component of risk management and that risk people at the right time and in the right format? simplified, while avoiding the manual collation management needs to be practiced every day, How do divisions get risk information to the and manipulation often associated with then the organisation’s ability to understand its mine manager? How does the mine manager spreadsheet-based risk systems. The goal is to risk at a more in-depth, mature level increases. get risk information to the corporation? At a gain the speed to give the maximum number Research is showing that organisations with corporate level, how can risk data be collated in of options. If a risk is identified early enough, higher levels of risk maturity have improved in an understandable way to show the true impact cost-effective mitigation processes can be profitability, enterprise value and opportunity on production targets, strategic goals, revenues implemented saving time, money and lives. generation. So there are sound financial reasons and reputation across multiple sites? why it is worth the effort to implement an ERM Implementing enterprise risk management Revisit risk regularly system and to use this to underpin a risk-aware (ERM) software helps to standardise the process On a regular basis, managers throughout the culture. The trick is to make risk management and provide a foundation for risk decisions across operation should be encouraged to revisit the simple, valuable and personal for all employees the operation. However, it needs to be made three key risk management questions: from the board room to the coal face.

14 | World Coal | February 2013 World Leader in Mineral Sizing

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anadian coal resources optimistic about its prospects, with strong Saskatchewan for 60%. Thermal coal contribute a robust forecasted demand for thermal and production is dominated by portion to the country’s metallurgical coal in Asia one of the key Sherritt International Corp. During the economy. According to reasons for its bullish outlook,” says ÀUVWQLQHPRQWKVRI6KHUULWWVROG CNatural Resources Canada (NRC), a Ann Marie Hann, president of 22.5 million t of thermal coal from its Government ministry, the country has the CAC. Prairie operations, down slightly from 8.7 billion t of proven coal reserves, But producers in Canada are not 23.5 million t in 2011. Prices in Q3 2012 6.6 billion t of which are recoverable. immune to the cyclical nature of the averaged C$ 17.47/t, up from C$ 16.20/t There are 24 active coal mines, most sector. “Canadian coal production for for the same time last year. of which are located in western 2012 is slightly lower than the previous )RUWKHÀUVWQLQHPRQWKVLQ Canada. According to a recent year,” says Hann. “The short-term Sherritt also exported 2.7 million t of PriceWaterhouseCooper report challenge has been from the slowing of thermal coal from its mountain commissioned by the China’s growth in the last year. Producers operations, down slightly from the Coal Association of Canada (CAC), the seem now to be adopting a more cautious PLOOLRQWH[SRUWHGLQWKHÀUVW industry contributes C$ 5.2 billion to approach and placing more focus on nine months of 2011. Prices in Q3 2012 for Canada’s GDP, and over 42,000 people expenditure control until markets and thermal export coal were C$ 100.32/t, are directly and indirectly employed by prices rebound once again.” down slightly from C$ 102.39/t for the the coal industry. &DQDGDSURGXFHVVLJQLÀFDQWDPRXQWV same time last year. Further, the sector is growing at a of metallurgical and thermal coal. Of the Metallurgical production stood at healthy rate: over the last 10 years, capital 70 million t mined in 2011, 40 million t 30 million tpa in 2011. Most metallurgical investment rose by almost 20%/year, and was thermal coal. The majority of coal is exported to Asia, primarily to revenues grew at an average rate of domestic consumption is for baseload, Japan, South Korea and China. 15%/year during the same time frame. FRDOÀUHGSRZHUJHQHUDWLRQ7KHSURYLQFH Teck Resources is the largest producer, “Over the medium to longer term, the of Alberta relies on coal for 74% of its with six mining operations in Alberta and Canadian coal industry is very electricity needs, Nova Scotia for 73% and %ULWLVK&ROXPELD)RUWKHÀUVW

16 | World Coal | February 2013 Canada’s coal sector has the potential for a tremendous future – but it also faces tremendous challenges. Gordon Cope takes a closer look at the industry’s gathering momentum.

nine months of 2012, Teck produced „ Calgary-based Coalspur Mines, cars,” says Hann. “They are upgrading 18.3 million t of metallurgical coal, up which owns 313 million t of thermal tracks, removing bottlenecks and from 16.1 million t for the same time coal reserves in central Alberta, streamlining scheduling.” In its Q3 2012 period last year, and is expected to meet recently announced a C$ 841 million, ÀQDQFLDOUHSRUW7HFNQRWHGWKDW its lower-end target of 24.5 million t for two-part development plan to export &DQDGLDQ3DFLÀFH[SRUWWUDLQVDUHQRZ 2012. Prices, however, have dropped up to 12 million tpa to Asian markets. averaging 152 cars in length, and they VLJQLÀFDQWO\7HFNUHFHLYHG86WLQ The first phase, a 5 million tpa expect further increases in 2013. 4GRZQIURPWKH86W opencast mine, is expected to open The three coal terminals on Canada’s booked for the same time period last year. in 2015. western coast – Ridley Terminals in Although the short-term outlook is „ The Quintette mine in northeast Prince Rupert, and Westshore and ÁDWWKHLQGXVWU\LVLQYHVWLQJVHYHUDO British Columbia, which closed in Neptune terminals in the lower mainland billion dollars in new projects in 2000 due to low commodity prices, near Vancouver – handle about 80% of anticipation of longer-term export growth. is being prepared for re-opening. Canada’s exports, and all are currently Teck Resources is purchasing new expanding. In 2012, Neptune spent „ Xstrata’s Nova Scotia Donkin project shovels, drills and trucks, and has C$ 63 million to increase capacity by is moving forward slowly staff onsite preparing buildings and almost 50%, to 12.5 million tpa. following the sale of its interest to infrastructure. The mine will employ Westshore Terminals is in the middle of a Erdene Resource Development Corp. approximately 500 new workers C$ 100 million upgrade that will bring its The 227 million t metallurgical coal when it comes onstream in 2013. capacity to 33 million tpa by 2013. Ridley deposit sits 3.5 km beneath the plans to double capacity to 24 million tpa surface. Erdene has production plans In anticipation of export expansion, the by 2015. In all, west coast terminals expect for up to 3.6 million tpa, mostly for coal sector has been co-ordinating to be handling around 70 million tpa by export to China and India from its transportation infrastructure with various 2015. In anticipation of expanded newly constructed barge-to-ship stake-holding partners. “Railways are production, mining companies are loadout facility. upgrading their engines to haul more renegotiating their existing contracts: Teck

February 2013 | World Coal | 17 recently announced that it is more than $GHFDGHDJR2QWDULRKDGFRDOÀUHG drop in metallurgical coal prices that tripling its shipment options with plants with over 6000 MW of capacity. :DOWHUERRNHG IURPWKH86WOHYHO Ridley Terminals, from 1.2 million tpa to It has closed 10 of these plants since 2003, LQ4WR86WLQ4 KDG 4.2 million tpa. including two units at the 2760 MW reduced the fair value of the company’s Nanticoke complex in 2011. Most assets below the amount paid by Walter. Problems galore remaining plants are scheduled to be closed by 2015.1 Although the Canadian Skills shortage Environmental challenges coal sector is not directly affected by the Labour shortages in the sector are also In spite of the positive long-term outlook, closures (most of Ontario’s thermal coal causing concern. “Companies do the sector faces several major challenges. FRPHVIURPWKH86 XWLOLWLHVLQRWKHU everything they can to source workers One of the most serious is climate change, jurisdictions are taking advantage of low locally because they have a strong and the association made between the gas prices to switch to combined cycle commitment to the local communities,” greenhouse gases (GHGs) emitted by gas turbines (CCGTs). These says Hann. “The reality is there is a FRDOÀUHGXWLOLWLHVDQGJOREDOZDUPLQJ gas-to-power (GTP) plants give utilities shortage of skilled labour in the sector, Global emissions total around WKHÁH[LELOLW\WRPHHWERWKEDVHORDGDQG and if Canadians cannot be found, then

28 billion tpa of CO2. Out of that SHDNORDGQHHGVHIÀFLHQWO\DQGFKHDSO\ immigration has to be considered.” 28 billion t, the burning of coal for But importing skilled labour has electricity production accounts for about „ SaskPower, Saskatchewan’s created a potential headache for one 11 billion t, making it a prime target for provincial utility, is spending over Vancouver-based mining company. reduction regulations. C$ 550 million to add 200 MW HD Mining, in conjunction with a After several years of consultation, the of new turbines to its 430 MW consortium of Chinese coal and steel Canadian Government published Queen Elizabeth power plant in ÀUPVLVGHYHORSLQJWKH0XUUD\5LYHU FRDOÀUHGXWLOLWLHVUHJXODWLRQVWKDWZLOO Saskatoon, Saskatchewan. project near Tumbler Ridge, take effect starting 1 July 2015. The law „ Enmax Energy is constructing an British Columbia. The plan is to create requires new plants built after that date to 800 MW gas-fired plant in southeast three longwall mines and produce up to EHDVFOHDQDVQDWXUDOJDVÀUHG Calgary. The C$ 1.3 billion facility is 8 million tpa of metallurgical coal. The generators, emitting no more than 420 t of expected to be online by 2015. project currently has a provincial permit

CO2 per GWh of power produced. „ TransAlta Corp. is partnering with to mine up to 100,000 t for assessment Existing coal facilities will have to meet a subsidiary of Berkshire Hathaway purposes. the new performance standards when to build natural gas-fired power Following Government guidelines, they reach end-of-life, at 50 years. The plants wherever new demand +'WULHGWRÀQGORFDOODERXUEXWVLQFHQR regulations are expected to reduce emerges in Canada. The companies one in Canada uses longwall mining, its cumulative emissions from the sector by estimate that Canada will require search was in vain. HD therefore brought 214 million t over a 20 year period. over C$ 200 billion in new power in skilled workers from its existing mines $OWKRXJKHQYLURQPHQWDOFULWLFVÀQG generation investment in both in China under a temporary worker the new regulations too lenient on many residential and industrial use, permit. Opposition members in RIWKHROGHVWIDFLOLWLHVFRDOÀUHGSRZHU including the oilsands and LNG provincial parliament objected to the plants will begin to be affected by 2018. In export plants currently being arrangement, saying that Canadian order to keep operating, the plants will permitted on the west coast of miners should have been hired. have to adopt GHG emissions reduction British Columbia. technologies. One of the most promising Some good news is carbon capture and storage (CCS). But Falling prices Government and industry are working CCS is expensive to build and operate: Another challenge to the sector is the WRJHWKHUWRÀQGDVROXWLRQWR*+* UHWURÀWWLQJDIDFLOLW\FDQHDVLO\H[FHHG uncertainty over the price of coal. Recent emissions. SaskPower is transforming its C$ 1 billion, and some estimates place ÁXFWXDWLRQVLQ$VLDQLPSRUWVKDYHVHWRII ageing 100 MW Boundary Dam power operating costs at over C$ 100/t. “The LQYHVWRUZDUQLQJV7HFN·V4SURÀWV plant in southern Saskatchewan into a UHDOLW\LVWKDWWKHRQO\ZD\FRDOÀUHG fell 78% in comparison to Q2 2012, CCS-equipped plant that will reduce power production can comply is through primarily due to drops in coal prices. CO2 emissions by an estimated 90%. CCS technology, and it is not “Ongoing economic uncertainties in The plant is expected to be in operation commercially available yet,” says Hann. (XURSHDQGWKH86DQGOHVVUREXVW by early 2014, and will capture

“Governments must support work on growth rates in China, India and other 1 million tpa of CO2, making it the largest technology that is applicable to power emerging markets have impacted both such operation in the world.1 plants, and it must accelerate that demand and prices for some of our 6HYHUDOQHZKLJKWHFKFRDOÀUHG technology. Even then, it is unlikely that it products,” the company said. plants are being built by Canadian will be available by 2018.” Walter Energy, which purchased utilities. Capital Power Corp.’s Rather than install costly technologies Vancouver-based Western Coal Corp. Keephills 3 (K3) unit features a that are unproven at a commercial level, for C$ 5.3 billion in 2011, announced a supercritical boiler and supercritical some jurisdictions and utilities are 86ELOOLRQLPSDLUPHQWFKDUJHLQLWV pressure turbine that operates at 39.5%

SKDVLQJFRDOÀUHGJHQHUDWLRQRXW Q3 2012 report. Analysts noted that the HIÀFLHQF\DQGUHGXFHV&22 emission by

18 | World Coal | February 2013 ®

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