Adaro eyes $291 million from unit IPO to spin off coal arm
Adaro is spinning off the coal mining unit valued at $2.45 billion to focus on developing cleaner energy, with an aluminum smelter being built in Kalimantan.
The Tennessee Valley Authority, one of the US five largest users of coal for electricity generation, said Thursday it would close down eight coal-fired power units with 3,300 megawatts of capacity.
The decision, said the local authorities, was driven by a combination of environmental requirements, the age of the plants, competition from natural gas and declining electricity consumption in the TVA’s service area.
The plant closures include two coal-fired units in Kentucky, despite an appeal from Senate Minority Leader Mitch McConnell (R-Ky.), who tried to persuade TVA President Bill Johnson to leave them open, as their closure would lead to massive job losses.
Coal plants face solid competition from natural gas-fired plants. Another major challenge is the Environmental Protection Agency (EPA) recently released draft rules on carbon emissions from new coal-fired power plants.
According to figures from the National Mining Association (NMA), about 40% of the U.S’s electricity comes from coal-generated power plants.
The country’s coal industry has been struggling as of late. Total production is on track to fall to a 20-year low of a little more than 1 billion tons this year. And the lack of interest from investors is more evident than ever before. As a prove, the government held an auction for mining rights to a hot, coal-rich tract of land in Wyoming in August, and didn’t attract a single bid.
Despite Obama’s administration efforts to reduce carbon emissions, a recent report says that King Coal should continue to reign for years, as it is set to overtake oil as the world’s main source of energy by 2020.
Image from Wikimedia Commons.
