Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
King Coal seems to have its days numbered as two of the most important consumers, the U.S. and China, are ready to ban the construction of new coal-fired power plants.
The U.S. Environmental Protection Agency (EPA) is reportedly set to formally announce next week a proposed rule to block the opening of more coal-fired power plants in the country, says WSJ.com. The draft, however, will make exceptions for those built with innovative and expensive technology to capture greenhouse-gas emissions.
Though such carbon-capture technologies are available, they are extremely expensive in terms of capital costs, which is not a viable option for investors at the moment.
“If reports are true, the EPA is set to issue a rule that will completely halt the development of new coal-fuelled plants by requiring they meet unachievable carbon standards,” American Coalition for Clean Coal Electricity President Mike Duncan told The Daily Caller.
“The American people should not be fooled. If the EPA overreaches, its actions could drastically reduce our nation’s fuel options, risk tens-of-thousands of jobs and destroy, not encourage, the development of new carbon capture and storage (CCS) technology,” Duncan was quoted as saying.
Meanwhile, Chinese authorities announced Thursday they won’t allow more coal-fuelled installations near Beijing, Shanghai and Guangdong, in an effort to curb air pollution in the country’s most industrial regions.
China’s dependence on coal is well known. Annual consumption exceeded 1 billion short tons per year in 1988 and has exploded since then, to an estimated 4 billion tons this year. This means the Asian giant gets about 70% of its energy from the fossil fuel, a number the government hopes to reduce to 65% by 2017.
Image from Wikimedia Commons
