GLG News by Mining Equipment Experts
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Thomas ShewskiOwnerHigh Energy Services
Fuel Switching from Coal- to Natural Gas-Fired Electricity Generation
December 8, 2008
Oil Price Drop Forces Big Energy to Retreat | www.time.com
Current natural gas prices of approximately $6.00/MMBtu allow electricity generation on natural gas to be more economic compared to coal in certain areas of the U.S. This is further favored by the time of the year.
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Thomas ShewskiOwnerHigh Energy Services
U.S. Thermal Coal Exports for 2009
December 8, 2008
U.S. Coal Export Boom Over for Now | www.guardian.co.uk
U.S thermal coal exports will be down in 2009 versus 2008 since the U.S.’s coal is no longer competitive into Europe and other world locations.
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Thomas ShewskiOwnerHigh Energy Services
CSX Tariff Rate for Export Steam Coal to Rise January 1, 2009
December 8, 2008
CSX Tariff for Export Bituminous Coal | www.csx.com
The CSX is raising tariff rates for export steam coal on January 1, 2009
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Bradford MillsChief Executive OfficerMANDALAY RESOURCES CORPORATION
Metal prices have more to fall before the correction is over
December 5, 2008
Metal prices fall further than during Great Depression | www.telegraph.co.uk
Despite the 50%+ falls in the prices of copper, nickel, zinc, lead, Pgms, and Aluminium since early 2008, most metal prices are only just now reaching the average cash cost of industry production. After the 9/11 event, demand destruction in the Western Economies was some 10% within 2 months and commodity prices fell, in most cases, below 90% of all producers cash costs. Since the third quarter of this year estimates of demand destruction are between 15-30% in the Western Economies. Supply in most cases has not yet adjusted anywhere near enough to rebalance this reduced demand. Expect inventories of raw metals to rise rapidly in the first half of 2009 and prices to fall another 25-50% forcing producers to take more decisive action to reduce supply. Comparisons with the Great Depression make interesting headlines but are highly misleading.
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Bradford MillsChief Executive OfficerMANDALAY RESOURCES CORPORATION
BHP/RIO Deal Collapse Should Be No Surprise.
December 1, 2008
ASIA-Death of a Megadeal: BHP Ends Its Pursuit of Rio | online.wsj.com
The BHP/Rio deal was always a long shot. Antitrust issues were formidable and the success of the deal was always going to be hugely dependant of regulator demanded asset sales requirements. Given the collapse in asset values in the last three months, any value for synergies would have been overwhelmed by the prospect of low realizations on assets sales over the next two years. Other factors were undoubtedly the proposed list of asset sales from the EU which apparently had a lot more Iron ore on it that BHP hoped. Finally, Rio's large debt and unfunded pension position look decidedly more risky in the current commodity price environment. The bottom line is that a difficult deal in good times became impossible in difficult times and BHPB rightly pulled the plug. Investors should be concerned that BHP ever pursued this as a hostile transaction given the enormous complexity and regulatory risks of the proposed transaction.
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George DorkhomExecutive ChairmanGREENKOTE PLC
Bailout the automakers ..no way
November 24, 2008
‘Peak-oil’ doomsayers catch Wall St.’s attention | www.iht.com
The problem with Detroit is arrogance and know it all..for years now the leadership at Detroit three auto makers insisted on not briniging new and fresh blood from the outside..you do not the autombile industry , you are no good. Yet there are tremendous talents out there that can can help bring about new ideas and approaches for automaking.Except for A. Mullaly and by accident Nardelli..look at who is running Detroit...they keep producing ineffecient cars ,not to the liking of the current generation of Americans and for that matter the global markets, and un-negotiated labor contracts that are unbelievably expensive and putting the US automakers at a $2000 disavantage per car than the competition, yet they come to DC and say they employ 3.0 people, they pay health care to current employees and retirees...and I ..I.. I.. and you owe. No the tax payer does not owe you and you should run your business as most companies do and let the free market forces decide...Detroit needs a revamp
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Bradford MillsChief Executive OfficerMANDALAY RESOURCES CORPORATION
Consolidation will Shorten Industry Price Cycle in Mining.
November 18, 2008
The recent announcement that FCX is significantly reducing molybdenum production is a rapid response to the recent price declines in Mo. This indicates that things are very different in the mining world than in past cycles. Historically companies have held on to production in down cycles for long periods with the hope that other producers would curtail production first. This became a war of attrition and often prolonged down cycles as large inventories of metals were built up that had to be worked off before prices responded. Consolidation in the mining industry has changed the production response behavior significantly with major producers rapidly curtailing production to rebalance supply and demand before massive inventories build up. In addition to FCX's move, Xstrata (XTA.L) and Norilsk (OTC:NILSY) have curtailed nickel production. Rio Tinto (RIO.L) and Fortescue Metals (ASX:FMG) have announced iron ore curtailments. Expect copper cuts soon.
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Thomas ShewskiOwnerHigh Energy Services
Rate Case Demonstrates Coal Transportation’s Attractiveness to Union Pacific and Other Railroads
November 14, 2008
Oklahoma Gas & Electric Files Rate Case Against Union Pacific Railroad for Coal Transportation | www.stb.dot.gov
The most recent Surface Transportation Board Rate Case filed by Oklahoma Gas & Electric (OG&E) against the Union Pacific Railroad (UP) for coal transportation from the Powder River Basin to the Muskogee coal plant actually shows the attractiveness of this move to the Union Pacific Railroad and other railroads. The commentary section describes the positive economics around this Rate Case to the UP.
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Thomas ShewskiOwnerHigh Energy Services
Surface Transportation Board Rate Case Process and Why it is Biased for the Railroads
November 14, 2008
Oklahoma Gas & Electric Files Rate Case Against Union Pacific Railroad for Coal Transportation | www.stb.dot.gov
Another coal-transporting utility has filed a Rate Case at the Surface Transportation Board (STB) alleging excessive rates for coal transportation. This most recent case was filed by Oklahoma Gas & Electric (OG&E) against the Union Pacific Railroad (UP) for coal transportation from the Powder River Basin to the Muskogee coal plant. The commentary section describes the STB Rate Case process using the OG&E situation and its bias to the railroads.
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Thomas ShewskiOwnerHigh Energy Services
Railroad Fuel Surcharge Court Case to Proceed – Potential Costly Outcome to Four Class I Railroads
November 12, 2008
Railroads Face Price-Fixing Suit on Surcharges | money.cnn.com
The suit alleges four of the Class I Railroads violated Federal antitrust laws with respect to fuel surcharge. The four Class I Railroads in the suit are CSX, Norfolk Southern, BNSF Railway, and Union Pacific Railroad. The time period is July 2003 through June 2007
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