The Sierra Club on Aug. 19 applauded the fact that a proposed coal export terminal at the Port of Corpus Christi, Texas, has been canceled.
The club said cited a termination agreement attached to the port commission’s Aug. 13 meeting agenda, which said in part: “This Lease Termination Agreement (‘Termination Agreement’) is made and entered into as of the 13th day of August, 2013, between the Port of Corpus Christi Authority of Nueces County, Texas, a navigation district and political subdivision of the State of Texas (‘Authority’), and New Elk Coal Company, LLC, a limited liability company (‘Lessee’).”
In 2011, Colorado-based New Elk Coal, a unit of Canada-based Cline Mining, signed a five-year lease with the port to develop 18 acres of land for a coal export terminal. The company had revived a long-shut deep mine in the Colorado end of the Raton Basin, with ambitious plans to expand this metallurgical coal operation, but that mine has been idle for about a year now due to slack coal markets.
“In the past two years, a pet-coke fired power plant proposal and a massive new coal export terminal have been canceled, saving Corpus Christi residents from major increases in air and water pollution,” said Hal Suter, chair of the Lone Star Chapter of the Sierra Club. “Now a second coal export project has been canceled, marking a clear shift away from this dirty and dangerous fuel. Big coal companies thought they would have a cake walk through the Gulf, but we’re proving them wrong, and the global economy is our strongest ally. Coal has no future in the Gulf.”
Previously, the Port Authority had considered a development called La Quinta Trade Gateway for a possible new coal export terminal. But the club said the proposal was put on hold after it released a negative report and grassroots activists rallied against it in early 2012. In January 2013, Chase Power LLC canceled its proposed Las Brisas pet coke-fired plant, the only major power plant proposed to be built within city limits in years.
Cline Mining has reworked management, finances
Said Cline Mining in a July 24 financial report: “New management at Cline and at New Elk continues to identify, control and reduce its operating costs across the group. While the Company’s New Elk coal mine is on care and maintenance, Cline will develop a new Life of Mine plan (‘LOM’) to be consistent with market realities and opportunities for a long-term sales agreement and a financial investment from either a private placement or joint venture.”
The company said it is initially working within the parameters of utilizing existing underground mining equipment on site, which includes 10 continuous miners, 10 roof bolters, 10 scoops, 15 shuttle cars, 17 power centres, three feeder breaks plus associated equipment. A longwall system has also been planned for integration into the operation, once markets and sales justify that higher level of production.
The third quarter 2013 premium low-vol benchmark coking coal price declined by 13.4% to $145/tonne from second quarter pricing levels, with some analysts forecasting that this will remain unchanged moving into the fourth quarter, said Cline Mining about overall market factors for its coal. Spot pricing is in the range of $120 to $130 per tonne heavily impacted by falling domestic Chinese market pricing. Global steel demand remains weak, with European plate and strip steel product prices falling throughout the first half of 2013 and Chinese steel prices ending the second quarter lower following a sharp fall at the start of that quarter.
“While economic problems in the Eurozone continue and China still faces corporate sector and local government structural problems, signs of economic recovery in the U.S.A. provide some upside for global markets,” Cline noted. “Prices for coking coal are now below the breakeven point for many coal producers and there have been several reports from major coal producers of coal operations/projects being idled. This should establish a good platform for stronger prices moving into 2014. It has been reported that prices are expected to remain at current levels until supply is removed from the market. Steel markets in Europe and Asia and the U.S.A. are anticipated to stabilize in Q4 which will also assist in price recovery.”