CDS comdek limited.

something to read while you wait

  1. 1,266 Posts.
    lightbulb Created with Sketch. 1
    all we need is the minister ti sign and all this

    is waiting for cds




    Breaking Views

    With coal prices at $US135 per tonne, double their level a year ago, miners are enjoying a bonanza. Since India and China, the two major engines of world growth, are both heavy coal users, this will not stop soon. However much environmentalists may prefer other energy sources, the World Coal Institute’s 2030 production target seems very conservative.

    Coal production is running way ahead of forecasts. In 2005, the WCI reported production of 4,970m tonnes, up 78 per cent over 25 years. At that point, its 2030 forecast of 7,000m tonnes seemed reasonable – 44 per cent above 2005’s level, suggesting a modest slowdown on environmental concerns. However, 2006 saw an 8.8 per cent production increase and 2007 was another excellent year. At current growth rates the WCI’s 2030 production target would be achieved by 2010.

    That is probably unreasonable; economic growth should slow even in India and China. Nevertheless, with 80 per cent of China’s power needs and 65 per cent of India’s coming from thermal sources, other alternatives are not big enough to supply their rapidly growing economies. Nuclear power plants offer their own safety dangers, and take a long time to construct, while solar power is hopelessly short of the scale needed. The world’s largest solar plant, to be built in Victoria, Australia, will cost $US270m and when fully operational supply 354 MW of power – 0.1 per cent of Australia’s needs, which are modest compared to those of India and China.

    The arithmetic is thus clear. Both India and China are expected to quadruple their power consumption by 2030, and most of that increase must come from coal-fired stations. With modern clean coal technology, the new plants’ environmental impact can be lessened, but no reasonable carbon pricing will significantly slow the rapid rise of coal usage.

    That’s good news for coal stocks, some of which have doubled in the past year. Furthermore, while oil supplies depend on the whims of tyrants and madmen, coal is abundantly available in countries with a healthy respect for private property. Thus coal stocks, not oil stocks, are probably the optimal long-term energy play.



    Share This Story

 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.