"Coal gloom coming from activists, not genuine analysts: miners."

Australian: “Miners  say climate change cam­paigners are dressing up envir­onmental activism as fin­an­cial advice before the release of a global report on the future of coal, which predicts thermal coal demand will peak in China by 2016.”
“A report due to be released today by the Carbon Tracker Initiative, a non-profit company specialising in pricing climate risk, warns that a “domino effect­ of slowing demand growth in China’’ could spread to other markets and hit investors in major miners.
“CTI’s latest analysis highlights $112 billion of future coalmine expansion and development that is excess to requirements under lower demand forecasts,’’ the report says. “In particular, it shows that high-cost new mines are not economic at today’s prices and are unlikely to generate returns for investors in the future.’’
CTI chief executive Anthony Hobley warns that coal is “potentially a risky business for investors’’. But Minerals Council of Australia chief executive Brendan Pearson said “these groups are ­activists, not analysts”.
In the past year, the increase in coal demand from China had been 60 per cent bigger than the “entire production from solar and wind in the country’’, Mr Pearson said.
The pessimistic view of the coal outlook by CTI contrasts with recent analysis by McKinsey and Co and the World Energy China Outlook, complied by Xiaojie Xu, head of the World Energy Divis­ion at the Institute of World Economics and Politics, Chinese Academy of Social Sciences, in Beijing.
The McKinsey report, compiled in July, predicted compound annual growth in coal demand of 0.7 per cent from 2011-2030. Mr Xu predicted, also in July, that coal consumption in China would continue to grow at least until 2020 and that coal would still account for 66 per cent of electricity generation in China by 2020.
Last week, China announced tougher regulations on dirty coal but Mr Pearson said this would actually shore up coal’s position as the new measures would favour better Australian coal.
But CTI argues that new measures to cap coal use and restrict imports of low-quality coal in China means “the tide is turning’’.
It cites Institute of Economics and Financial Analysis predictions showing China’s coal demand could surprise by peaking in 2016, and decline grad­ually thereafter. The CTI report predicts that China’s desire to reduce imports will cascade through the seaborne market, impacting on prices and asset values for export mines in the US, Australia, Indonesia and South Africa.
It shows that in a low-demand scenario the seaborne coal market would account for an average 850 million tonnes per year in the next 20 years. Such a scenario would require production only up to a break-even price of $75 per tonne.
“This means mines with costs higher than this will not provide investors with a decent level of return,’’ it said. The CTI analysis finds that some of the world’s biggest greenfield coal projects in Australia’s Galilee Basin are ­already out of the money under a low-demand scenario.”