According to ACIL Allen Consulting coal in New South Wales is currently valued at around $2 per gigajoule. This low price cuts the dividends shareholders can expect to receive. It also reduces the valuation of coal reserves on the which the price of their shares depends.
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| Photo: Sam Walsh has faced investors at his first AGM as Rio's chief executive. (AAP) |
It can only be a matter of time before shareholders' complain of inaction by coal mining directors to substantially increase the value of coal and coal reserves.
Shareholders have a right to know why coal mining directors are selling coal for just $2 per gigajoule instead of converting it to natural gas that can be sold at $9 per gigajoule.
Update February 4, 2017
Australian thermal #coal sold in 2015-16 for just $2.69 per GJ.— Askgerbil Now (@Askgerbil) February 4, 2017
The LNG export price fell from $13.20 per GJ in 2014-15 to $8.60 in 2015-16
Update, 15 February 2016
Chinese LNG demand falls for the first time on record
Innovation pushing #CSG out of natgas market. Chinese LNG demand falls for the first time on record https://t.co/BHY4v57Es3 via @ABCNews— Askgerbil Now (@Askgerbil) February 5, 2016
World’s largest SNG plant goes on-stream in China. #Innovation @DennisJensenMP @p_hannam https://t.co/zjHjH3NWrj | https://t.co/4KKY6MtxPU— Askgerbil Now (@Askgerbil) February 5, 2016
Update, 19 January 2015
- POSCO, South Korea's top steelmaker, said April 3 it has set up a subsidiary to operate a synthetic natural gas business to trim its LNG consumption.
The subsidiary, POSCO Green Gas Technology, was established in POSCO's Gwangyang complex on the country's southern coast, where it is building a synthetic natural gas plant with a capacity of 500,000 metric tons per year.
The plant will produce SNG by processing low-cost coal. It will be completed by August and start up in January 2015.
South Korean steelmaker sets up synthetic natural gas subsidiary
Latest Oil and Gas News: April 7, 2014- POSCO, South Korea's top steelmaker, said April 3 it has set up a subsidiary to operate a synthetic natural gas business to trim its LNG consumption.
The subsidiary, POSCO Green Gas Technology, was established in POSCO's Gwangyang complex on the country's southern coast, where it is building a synthetic natural gas plant with a capacity of 500,000 metric tons per year.
The plant will produce SNG by processing low-cost coal. It will be completed by August and start up in January 2015.
.@YourSayAGL South Korea's POSCO grabs market lead converting cheap Aus coal to natural gas. Beats #LNG, uses no #csg http://t.co/0TR6zU5ign
— Askgerbil Now (@Askgerbil) January 28, 2015
.@YourSayAGL Coal-to-SNG - Synthetic Natural Gas - avoids #CSG costs and headaches. South Korea grabs market lead: http://t.co/DF1urQ6rYv
— Askgerbil Now (@Askgerbil) January 28, 2015
Update, 15 February 2016
One year later the message sinks in...
One year later the message sinks in...
"In the interest of our shareholders and customers AGL will not proceed with the Gloucester Gas Project and will cease production at the Camden Gas Project."
AGL to exit gas exploration and production; Gloucester Gas Project will not proceed. More info here https://t.co/Lq6glrzo2O— AGL Energy (@aglenergy) February 3, 2016
Energy retail giant #AGL reports a statutory loss after #tax of $449 million on gas asset write-downs https://t.co/PGQcn7W016— ABC News (@abcnews) February 10, 2016
Update, 20 January 2015
Leaders of Australia's biggest businesses have blasted the nation's Senate as obstructive and demanded reform to restore order to government.
Leading businesses call for senate reform to restore order
Tony Boyd and Michael Smith : January 6, 2015Leaders of Australia's biggest businesses have blasted the nation's Senate as obstructive and demanded reform to restore order to government.
What leaders of Australia's biggest businesses have blasted is democracy working properly. Its review body is putting the brakes on outlandish and unreasonable decisions by the Abbott Government.
Any similar review on corporate decision-making is clearly lacking in Australia's leading businesses:
- Natural gas exporting business executives are pressing ahead blindly with expensive coal seam gas fracking technology and
- coal mining executives insist on the correctness of their absurd decisions to export increasing volumes of coal at steadily falling prices.
- Both decisions lack the common sense shown by South Korean business leaders who have done the sums and realised it is in their shareholders' interests to buy cheap coal from Australia and manufacture their own natural gas from it.
@RioTinto shareholders were most angry about the $14 billion worth of writedowns and a $3 billion annual loss. http://t.co/cl74Y4AaZQ #coal
— Askgerbil Now (@Askgerbil) September 10, 2014
High priced natural gas from bargain priced coal http://t.co/7Sk4mmPbEe
— Askgerbil Now (@Askgerbil) September 10, 2014
Gas and coal prices
Natural gas and coal prices used in 2013 emissions projections work
Source:
ACIL Allen Consulting, Electricity Sector Emissions:
Modelling of the Australian Electricity Generation Sector, September 2013
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