• 1 day PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 1 day Syrian Rebels Relinquish Control Of Major Gas Field
  • 1 day Schlumberger Warns Of Moderating Investment In North America
  • 1 day Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Alt Text

Gold Prices Could Spike As India Resumes Imports

Gold purchases in India imploded…

Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

Alt Text

Copper Prices Ignited By Chinese Demand Growth

Copper prices saw some gains…

Here’s An Unexpected Shift In Global Coal Dynamics

Here’s An Unexpected Shift In Global Coal Dynamics

Prices in the worldwide thermal coal market appear to be stabilizing. Leading to the question: is there any hope of a recovery in sight soon?

To find out, it’s critical to keep an eye on the supply dynamics unfolding globally. And one particular event may signal a big change coming, according to news emerging this week.

That comes from important global coal producer South Africa. Where Platts reports that local producers may be getting a financial incentive to halt exports.

That’s because state-owned South African electricity generator Eskom is looking for coal feed to its power plants. And may be willing to pay a premium in order to get it. Related: A “Wave of Bankruptcies” About To Hit Coal Industry

The test case here is the Optimum coal mine, in South Africa’s eastern Mpumalanga basin. A facility owned by Glencore — which was placed on care and maintenance in January due to currently-low export prices for thermal coal.

Eskom however, badly needs coal supply from mines like Optimum. Power shortages have been rife throughout South Africa of late, and electricity prices have been steadily pushing upward.

Given such, Eskom has pitched Glencore a deal: restart the Optimum mine and sell the output domestically. Related: Is China Exporting Its Pollution?

In return for the supply, Glencore would reportedly be able to save on transport costs for its coal. With Eskom instead picking up the charges for shipping coal by rail out of Optimum.

According to local experts quoted by Platts, the result would be a cost savings of about $27 per ton for Glencore. Bringing the effective price received by the company for domestic sales to as much as $36 per ton. Related: Can Utilities Survive 21st Century Energy Market?

This is significantly higher than the approximately $16 per ton that Eskom usually pays for domestic coal. Giving a producer like Glencore a significant advantage in selling locally.

If this deal becomes more-widely offered to South Africa’s coal producers, it could have a notable effect on export supply. More miners could choose to sell their product locally — meaning less coal sailing out of the country to buyers in big markets like India and eastern Asia.

Given that South Africa is one of the few swing suppliers for these markets, that would be a significant shift. Watch for export figures over the coming months from South Africa’s key Richards Bay terminal.

Here’s to buying local,

Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News