Wouldn’t it be wonderful if clean, green virtue were rewarded with a tidy price rise?
The climate strikes back! The Australian, yesterday:
Australia’s largest coal producer, Glencore, will abandon the pursuit of large coal acquisitions and freeze production at current levels to help address climate change concerns, following pressure from institutional investors (including the Church of England and superannuation funds) for the fossil fuel to be phased out.
Death to carbon! Labor’s Richard Marles, The Australian, yesterday:
The global market for thermal coal has collapsed, and at one level that’s a good thing because what that implies is the world is acting in relation to climate change.
International Energy Agency:
While global coal demand looks set to rise for the second year in a row in 2018, it is forecast to remain stable over the next five years, as declines in Europe and North America are offset by strong growth in India and Southeast Asia.
Old King Coal, The Australian, February 6:
Coal has overtaken iron ore as the nation’s biggest export earner amid an ongoing renaissance for the contentious industry … Australia exported $66.2 billion worth of coal last year, the highest amount ever recorded.
A silver lining? The Australian, yesterday:
Glencore has conceded its decision to freeze current production levels over climate change concerns may push coal prices higher as the global miner chases value over volume. (CEO Ivan) Glasenberg said the lack of new supply coming online in countries including Australia may mean its decision boosts prices.
Not-so-ethical investment. Nick Cater, The Australian, November 12, 2018:
The attempt to starve coal producers of capital has impeded their attempts to build new coalmines but it hasn’t got in the way of profits. The price of coal has risen to a six-year high, which is good news for the coal business but bad news if you’re living in, say, India’s Bihar state, where three out of four households don’t have electricity. “Energy prices will need rise to the level at which the marginal consumer of fossil fuels is incentivised not to be a consumer,” analyst Redburn reports. “(So) the 1 to 2 billion people on the planet with zero or unreliable access to modern energy would remain priced out of the market.”
Appetite for coal, Miningmx, December 28, 2017:
No company has reflected the rehabilitation of the world’s mining sector better than Glencore and Glasenberg. He can even talk with enthusiasm about thermal coal. While the others sigh and suck their teeth about the commodity, Glasenberg generally sees upside. How else to explain his dogged pursuit of Rio Tinto’s Coal & Allied to which Glencore eventually won exposure by cutting a side deal with Yancoal … while others worry about what investors may think about global warming, Glencore has hungrily added to its 28 thermal coalmines elsewhere, entrenching its position as the world’s largest exporter of the fuel.
Bloomberg, Chris Bryant, December 4, 2018:
… investors worry that high thermal coal prices aren’t sustainable. It’s possible they’re wrong about that. Glasenberg certainly thinks so. Glencore profits from the premium that utilities pay for higher-grade coals. With India and China constructing lots of new coal capacity, demand isn’t about to fall off a cliff either, whatever climate campaigners hope.