Uk Coal

[Vicarious]

Following on from the drax thread, I've been flicking through the DTI's quarterly Energy Trends report here

 

The chart for the uk is quite interesting:

 

 

it shows a drop in gas production/consumption which seems to have been replaced by an increase in coal production/consumption. I've been holding this stock for around 6 months and its done quite well. Could we see a return to the UK’s mining glory days?

[No6]

it shows a drop in gas production/consumption which seems to have been replaced by an increase in coal production/consumption. I've been holding this stock for around 6 months and its done quite well. Could we see a return to the UK’s mining glory days?

 

Except that in the 80's in the war on Union power, the mining industry with Mr Scargill hoping to fight one last class war ensured the tory revenge, just about killing off this industry between them. How many mines were closed because they were deemed "un-economical" by the tories, but would now be very economical given very different times and energy requirements? The industry suffered because you had two very different political animals determined to fight until the end. No way could the miners defeat the state, but equally the tories chose to sacrifice the industry. Those pits can't just be re-opened. Many are gone for good and they probably have years of coal production in them, but it would now be expensive to get at it. And anyway, who the hell in their right mind would want to work down pit today? If the industry had survived as it could have been, it would probably be largely manned by eastern european labour today - non-unionised of course.

 

So, probably no return to the glory days, but some companies will probably do very well as the need for coal builds up again.

[drbubb]

SOME ARE being reopened.

 

I have shares in a company called Coal International (CLN.L),

and they are involved in reopening a coal mine in Wales.

 

They already have an operating coal mine in the USA, purchased out of bankruptcy

[No6]

An interesting article from the Daily Wealth in which UK Coal gets a mention.

 

 

An army marches on its stomach said Napoleon...

 

That may be so but years later Hitler knew Tiger tanks and Heinkel bombers needed fuel as well.

 

And this was something of a problem for Nazi Germany.

So when they lost access to the Romanian oilfields it had to get creative. It turned to an invention developed in the 1920s by Franz Fischer and Hans Tropsch.

 

These two boffins came up with something very important - a way of making petrol from coal. This proved vital for the coal-rich oil-poor Nazi war machine and by 1944 they had 25 plants producing 124,000 barrels/day.

 

Scrolling forward to today a $70 oil price is forcing oil dependent nations to ‘get creative’ once again...

 

And the Fischer-Tropsch process is again making the news.

 

One who is keen to explore its potential is Montana governor, Brian Schweitzer.

 

“Why should we fork out $70 for a barrel of oil, produced by regimes that hate our guts?” he reasons as he promotes much-needed investment in the state.

 

In a country boasting 30% of the world’s coal reserves, Montana alone contains 11% of it. Enough reckons governor Schweitzer to supply US fuel requirements for 40 years using coal-to-oil technology. This is a more economic solution for America as long as the oil price stays north of $30 he argues.

 

Even the Pentagon has calculated the US could produce more oil using coal than that available in the entire Middle East.

 

Amongst the world’s companies that have commercialised their coal-to-oil Fischer-Tropsch technology is South Africa-based Sasol, again by force of necessity. South Africa shared Germany’s dilemma of being coal-rich oil-poor and needed to develop an alternative fuel supply during sanctions in the Apartheid era.

 

This has led today to the company producing much of South Africa’s diesel and even its jet fuel. The chances are if you fly out of Johannesburg today, your plane will be powered by a mix of kerosene and pulverised coal.

 

What’s more if the oil price stays above $50 your plane could soon become 100% coal powered. Sasol has a new version due to be offered for international approval later this year.

 

Here in the UK, particularly for anyone who remembers the 1980’s Miner’s Strike, it takes some adjustment to think of coal as anything other than a byword for industrial strife and a symbol of decline.

 

A view not shared by mining entrepreneur Richard Budge of UK Coal. He has recently spent £37m on new equipment as part of his plans to re-open the Hatfield colliery in South Yorkshire next year. It is the biggest mining machinery order in 20 years.

 

And this year, UK Coal expects to make a profit for the first time in years.

 

Coal is on the comeback trail.

[No6]

UK Coal is beginning to attract some friends amongst the mainstream financial press. Questor from the Telegraph is tipping it. Does that mean if you are a contrarian that it is now too late to get on board?

 

Some interesting points though.

 

"Is it a coal company or a property business – or even a takeover target? UK Coal, the remants of a business that brought in £815m at privatisation and is currently capitalised at just over £300m, meets all three criteria."

 

http://www.telegraph.co.uk/money/main.jhtm...mp;targetRule=1

[No6]

UK Coal, a property company in disguise?

 

As yesterday's trading statement showed, the group's coal business is in a poor state. For the year to 31 December 2006, the Doncaster-based firm will post a pre-tax loss of £33m which, although an improvement on the £62m deficit it revealed in 2005, is still pretty bad. In the year just gone the business has suffered from production problems at two of its remaining deep mines and legacy contracts which mean it gets much less than the market price for coal.

 

However, UK Coal's property portfolio more than makes up for this. It owns 50,000 acres of land which constitute one of the biggest brownfield land banks in the country. Over the next six years the group plans to develop a part of this to provide 14,000 new homes and over 25 million square feet of industrial and office space. Most of the vacant land is on disused open cast and deep mine sites along the M1/A1 corridor from Newcastle to Leicester. Re-development work has already begun at a site near Sheffield.

 

http://news.independent.co.uk/business/ana...icle2145157.ece

[No6]

UK Coal (UKC) had a good day today, 517.00p +5.83%. It doesn't mean they have actually dug some coal up though. Appears to be on the back of another rumour.

 

From ADVFN

 

Meanwhile, Wall Street turned mixed in early deals as concerns about a market correction dampened initial investor enthusiasm over a 45 bln usd buyout of electric utility TXU. Before the opening, the group confirmed it is to be bought by a consortium led by Kohlberg Kravis Roberts and Texas Pacific Group in a deal believed to be the biggest leveraged buyout in US corporate history.

 

By London's close, the DJIA was 3.00 points higher at 12,650.0, but the Nasdaq was 7.37 lower at 2,507.37.

 

Back in London, the TXU news fired up utilities with International Power 5-1/4 pence higher at 384-1/2, National Grid added 9 at 791-1/2 at, Scottish & Southern rose 30 at 1,518, while second line UK Coal jumped 28-1/2 to 517.