Energybuild Share Discussion Threads

[jonwig] 12/2/2010 10:46

Slap - the problem seems to be planning delays with the opencast mine extensions, rather than 'year of transition'.
However, they could have better aligned the statement which can with the FY results with today's, and equally could have said something at the AGM in December.
So they are certainly guilty of not keeping the market informed.

Write out one hundred times: 'euphemisms'.

[slapdash] 12/2/2010 08:30

well love the euphanisms these companies use... " a year of transition"
means we messed up big time but hopefully next year should be allright...

[jonwig] 09/2/2010 16:52

From WTN's Q3 results:

On July 13, 2009, the Company acquired a 50.6% interest in Energybuild Group Plc ("Energybuild") which owns the Aberpergwm underground mine and the Nant Y Mynydd open-cast coal site. 100% of the results of the UK coal operations are included in the Company's results from July 14, 2009. Energybuild's results also include its 50% portion of the operations of its tip processing joint venture. On December 16, 2009, the Company participated in Energybuild's equity fund raising which increased the Company's ownership to 54.7% ("Acquisition - Energybuild Group Plc"). The funds were raised to increase production to approximately 750,000 tonnes per year.

Revenues for the three month period ended December 31, 2009 reflect the sale of 42,000 tonnes at a realized price of $97 per tonne or £55 per tonne. The price realized is consistent with the price in fiscal second quarter 2010.

Cost of goods sold for the three months ended December 31, 2009 reflect a unit cost of $75 per tonne, which is 17% lower than costs in fiscal second quarter 2010.
...
In Wales, where the Company has a 54.7% interest in Energybuild, considerable interest is being expressed in the Aberpergwm anthracite product for use in the steel sector. Energybuild's major customers are an energy plant and steel mill within 25 miles of the mine. Both of these customers are importing almost all of their thermal and PCI coal. This captive market provides a competitive advantage for Energybuild. Energybuild, with its recent fundraising will be increasing production to meet its customer's needs.

The first time, I think, that Corus has been described as "a customer". Good news, if it is.
On the other hand, realised sale prices are lower than the last EBG numbers, but so are costs.

[lasata] 09/2/2010 10:04

FT Today - China's power needs fuel rise in coal prices.............

And closer to home


"Thermal coal spot prices are soaring" analysts at Credit Suisse said. "The market is very tight due to the severe winter across Europe, China and the eastern US."

[lasata] 14/1/2010 08:30

There's a reason that coal exchange traded funds (ETFs) were true standouts in 2009: There doesn't seem to be enough coal to go around and coal prices are shooting up as a result. Companies trying to capitalise may benefit from the greater efficiency brought on by mergers and acquisitions.

Among the activity in the industry right now includes:

Coal Miner Consol Energy (NYSE: CNX) has budgeted $500 million for coal operations this year and $100 million for additional activities, reports Kishori Krishnan for Coal Investing News. Consol Energy has 12 coal mines in six states and has around 4.5 billion tonnes in coal reserves.

Global miner BHP Billiton (NYSE: BHP) has bid on Australian state of Queensland's coal freight business.

Vancouver-based Tech Resources paid $14-billion to take over Foding Canadian Coal Trust, which will pass along ownership of the massive metallurgical coal resource in BC's Elk Valley.

Leighton Holdings Ltd was awarded a 12-month contract extension at Tarong Energy's Meandu coal mine in Queensland state that is worth around $140 million. Queensland-based Macarthur Coal could soon become Australia's leading independent coal producer if it succeeds in purchasing Australian Gloucester Coal, which would give Macarthur Coal a market capitalization of $3.4 billion.

Chief executive Michael Roche of Queensland Resources Council says coal export records are likely to set new highs this year.

The colder weather is helping in pushing coal prices higher, and some analysts believe the rising price will lead to more merger and acquisition activities, writes Wang Xinyuan for Alibaba. Coal inventories in China are diminishing on the increased power demand and coal consumption. Power companies are loath to lock in year-long coal contracts because of volatility in coal prices, and they are now considering acquiring coal suppliers instead for their energy sources.

[lasata] 08/1/2010 09:51

World coal prices improving steadily

I guess they are burning alot of coal down in Wales............

[lasata] 04/1/2010 14:23

I am most encouraged by that IC article and volumes beginning to move again on this share as people recognise good value here..........

[lasata] 04/1/2010 09:59

cheers Jon - 2010 looks very positive for coalies like EBG

[jonwig] 04/1/2010 09:44

Nothing on the web page about that.

[lasata] 04/1/2010 09:17

Thanks Jon - can you add right hand column by Tim Dudley on domestic coal production costs erc?

[jonwig] 04/1/2010 08:56

Lasata. You have free access this week if you register. Removed article.

[lasata] 04/1/2010 08:16

Could someone kindly post very positive article on coal and EBG from page 39 of last week's Investor Chronicle?

[septimus quaid] 30/12/2009 13:42

Typical Sulfur Content in Coal

* Anthracite Coal : 0.6 - 0.77 weight %
* Bituminous Coal : 0.7 - 4.0 weight %
* Lignite Coal : 0.4 weight %



Seems like the only way to get around fitting FGD is to rely on dodgy supplies of Indonesian coal (bit of a non-starter according to the article).



(i) Sulphur Dioxide
There are two routes to complying with the ELV SO2 requirements of 400mg/Nm3: desulphurisation(operating FGD) or switching to very low sulphur fuels. FGD-equipped coal stations will achieve the ELV target, even burning high sulphur UK coals. A 1.8% sulphur coal (on a 24GJ/t CV) burned in a standard coal unit with FGD with an average removal rate of 90% will produce about 400mg/Nm3 of SO2. Non-FGD coal stations will be able to comply with the 400mg/Nm3 standard, if they can obtain an average sulphur content of about 0.2% (0.18% on 24GJ/t CV). Slightly higher sulphur coals could be used if the installation were fitted with gas over-firing, sorbent injection or biomass co-firing equipment.
Very low sulphur coals are available in significant tonnages only from Indonesia, which presents several challenges for coal generators.

• These coals will be priced at a premium over standard import grades, which may be very high when the international coal market is in short supply or when freight rates are very high

• Indonesian coals are characterised by high volatile matter which is likely to requiresignificant plant modifications (new refractory linings for boilers, mill redesign, etc which could cost £5/kW) and possible de-ratings

• There is no alternative supply source to Indonesian coal, should supplies be disrupted.

These factors would indicate that reliance on very low sulphur coals as a compliance option would be extremely risky.

Generators, which did not fit FGD, but sought to comply with the ELV standard, would be required to burn compliance coal almost on a continuous basis. This is because the ELV standard is applied on a calendar month mean value, with an additional constraint that 97% of all the 48-hourly mean values cannot exceed 110% of the ELV value. This effectively means that installations can exceed the limit only 11 days a year. Plant operators can therefore burn non-compliance coals (>0.2% S) only as part of a continuous blend (either on-belt, from stockpile or homogenised).

Fitting FGD provides the safest compliance option for generators, as it does not require that the unit is fed a continuous diet of ultra low sulphur diet. Generators with FGD have more options both as to where they source coal as well as to burn other fuels. In particular, FGD stations can run on a high sulphur diet, which will be available from local and international suppliers at a significant discount to very low sulphur coals (VLSC). For some inland stations, once transport costs are factored in, there may also be savings from using local coal versus standard grade imports. In addition, there may be opportunities to burn low cost high sulphur fuels, such as petcoke.

However, FGD will itself cost a considerable amount to install (c £40-55/kW) and also to operate. The projected benefits of the extra flexibility on fuelling and the additional operating hours will need to offset these costs, if generators are to invest in FGD.

[jonwig] 30/12/2009 12:36

EBG's underground coal is mostly anthracite which has a very low sulphur content.
The opencast won't be as consistent in quality but will become less important to EBG as the underground operations scale up.

[septimus quaid] 30/12/2009 12:14

Bit of a war and peace but may interest some by way of background information. Ref conclusions, does anybody know the sulphur content of EBG's coal?

7.4 Conclusions on demand for UK produced coal: 2008-16
In simple tonnage terms, under most scenarios the projected demand for coal in the UK is likely to exceed the potential production from UK mines. Only in the very lowest demand scenarios and then late in the period, does demand fall below the projected potential national output.

However, when one takes into account the coal consumers' preference for low sulphur coals, which are required to comply with the various emission standards, the situation is very different. The need to comply with the National Emission Ceilings, station mass limits and ambient air quality limits all require that large combustion installations will increasingly need a diet of coal much lower in sulphur than standard UK coal grades. In these cases, demand is likely to be lower than potential production under most sceanrios.

[lasata] 29/12/2009 14:04

Thinking of making this share my nap for 2010.........

[lasata] 29/12/2009 10:11

Beginning to look good on the chart too

[lasata] 29/12/2009 09:43

Well spotted Jonwig - EBG rises from the ashes..........and more to come i reckon.

[jonwig] 29/12/2009 09:33

Yes, a pretty bullish scenario reported in yesterday's Telegraph:

[lasata] 29/12/2009 09:19

Yes - Coalies look to be a theme for the start of new decade

[jwilson1975] 29/12/2009 09:16

This is climbing back up very nicely - Indeed, 2010 could very well be a good year for EBG.

[lasata] 23/12/2009 14:58

Thanks Jon


2010 could be a good year down in those Welsh valleys

[jonwig] 23/12/2009 14:22

Here's confirmation of that, Lasata:



The near-time thing about EBG is that WTN don't seem to be too grasping!

[lasata] 23/12/2009 13:44

With thermal coal prices improving around the world EBG should return to previous 30p high. Weak £ makes imports expensive too.

[lasata] 22/12/2009 20:00

Scotiabank's top pick for 2010 is coking coal with the price expected to climb 32% to US$169 or possibly more in the Japanese fiscal year, beginning in April.

In her analysis, Mohr noted that supplies of "premium-grade hard coking coal" are tightening. Port and rail constraints continue to inhibit Australian shipment, which has likely increased the demand for B.C. and Alberta coal.


Should please a few coalies