The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Solar and non fossil power needs massive connection infrastructure which will take years to organise. In South Africa one sees very little evidence of solar panels and in this country they will at best heat your water or provide some return based on previously excessive but now reducing tariff income-not a viable alternative to centrally generated fossil powered electricity. We must not confuse what may well happen in years to come with the reality that we are currently reducing our safety margin by Governmental dithering and in the meantime Hargreaves and their ilk are in the business of making hay.
You really must see this Bev! The problems with fuel supply in South Africa last week - down to coal, no less! And what are they touting as the answer? Photovoltaics... http://www.pv-tech.org/news/green_rhino_energy_pv_power_would_help_in_solving_south_african_grid_failur?utm_source=newsnow&utm_medium=web&utm_campaign=newsnow-feed
Just a quick comment, re South Africa... Electrical grid infrastructure is nonexistent in many parts of Africa. There are schemes to get those people out of fuel poverty. What with? Solar panels. In the same way many of those places missed out on installing wired telecoms and went straight to mobile phones, it's likely they'll go straight to solar.
I daresay if we get into that position it will be due to our government's incompetent handling of the situation. In many countries, eg India, where outages particularly occur due to corruption & incompetence, businesses - including Coal India itself! are deploying industrial as I see solar to get around supply problems. With no help from the grid. US utilities are afraid of the fact that it's catching on in a big way there. They will be left having to maintain ageing grid infrastructure with dwindling revenues in such a scenario. Here's another threat, recently announced: http://www.theguardian.com/commentisfree/2014/mar/09/cheap-batteries-renewable-energy-market-big-power-companies-wind-solar-power? Elon Musk intending to boost battery supply to bring costs down. This will take out one disadvantage for many. Also, despite all the turmoil and incompetence of our government, companies and homeowners here have been getting on with installing solar plant especially, and there's plenty of capacity there yet, which is why it'll be a great area for investors to get into. It has a future expansion ahead of it which coal does not. Coal is only going to suffer by comparison. You think coal is going to save us from any future supply problems? Look at places which already suffer from such problems. One article re the situation in India spoke of how it can take a decade for a coal plant to be set up. In a far shorter time, with far fewer restrictions, less upfront outlay and ongoing operational costs, solar can be deployed. This is actually happening. Now.
All these potential developments do not alter the reality of today. The fact is we are shutting down sources of power faster than we are building them. This is compounded by an increase in industrial demand. Politicians are currently frightening off new projects, be they biomass, windpower or solar by threats of price caps and tariff freezes. Futhermore, we are stalled on nuclear by european beurocracy, while gas is too expensive. When the liklihood of power cuts, as I experienced in S,Africa last week, becomes real, minds will be concentrated by reality not futuregazing.
The myth that renewable tech gets more subsidies than fossil fuels: http://www.businessgreen.com/bg/interview/2332749/solar-subsidies-should-be-a-catalyst-not-a-crutch-says-enphase-chief
Note the sentence, "in some markets solar has begun to compete without subsidies..." Need I go on? http://cleantechnica.com/2014/03/07/iea-underestimates-solar-industry/?
Unsubsidised solar to thrive in the US: http://www.economist.com/news/united-states/21598666-future-bright-solar-power-even-subsidies-are-withdrawn-let-sun-shine?
Bear in mind, solar is only at the beginning of its development curve: http://www.renewableenergyworld.com/rea/blog/post/2014/03/its-now-official-u-s-solar-industry-has-record-shattering-year-in-2013?
http://cleantechnica.com/2013/10/18/grid-parity-low-lcoe-driving-34-global-renewables-capacity-2030/
Not true. I could post numerous articles refuting what you're saying and will if I have time. Fact: renewables have reached grid parity in many countries. Without subsidy. It is early days in renewables development, but last year and this year they make up 30% of new capacity in US, China, the two biggest consumers, and that will grow. Solar is set to expand exponentially. When that happens, coal will be the first thing to shut down. Coal is one of the most heavily subsidised fuels going. Much of that is hidden. Renewables are not subsidised to the same as extent as coal. Again I shall dig out some analyses to prove that point as time allows. Coal is collapsing in numerous countries around the globe.
Renewables only reach anything like parity with fossil fuels when massively subsidised and the latter are heavily taxed. We all know that in the very long term coal use will decline. As I write this , however, billions are being invested in new coal fired plant worldwide- far more than any other power source. Like it or not, money is talking , and in the absence of any new reliable plant in the UK in the forseeable future ,set against increased likely demand , fossil fuels will have a big part to play in the years ahead.
30 years ago this month since the miners strike started the demise of uk coal industry. It's not rocket science to work out that based on Sefton chase 47 quid ara Rotterdam coal is never gonna work even with a mix of opencast and deep mine. Look at the share price of drax power over last 12 months and you can see who is benefitting from cheap coal . I can't see coal becoming expensive in the short or medium term and long term the industry is finished. Look what's happened in last 30 years.
Energy security, huh? http://www.businessgreen.com/bg/news/2332202/uk-wind-beats-storms-to-supply-11-per-cent-of-power-in-february?
Energy
Misinformation. Renewables reaching grid parity in many countries. The recent storms hitting UK generated massive amounts of power in UK. And hey, we don't have any more energy security from coal, as most of that's imported. It's imported because digging it up locally is not economically viable and most of it's poor quality. Massive strides happening in renewables tech. That's where there's money to be made. Solar especially booming.
Been wondering same. Been hearing of US, Australian companies barely making a margin of a few cents,on a tonne, some even into negative numbers. Price only projected to decline. What's the problem? World oversupply is one. Why is oversupply happening? Suggests that at bottom, the high cost of production simply unworkable. So much for coal being a "cheap" fuel. Cheapness of coal seen as its only advantage. If true cost is reflected in the price, it has no advantage whatsoever. This industry will limp along till investors realise they'll never see returns on the loans subsidising operation, and decide to pull out. Signs that is starting to happen. Hansa Trust dumped a load of Hargreaves shares recently. Will we see that progressively increase?
Those who would write off coal have been dealt a shock with the sudden threat to the security and cost of our imported gas supply . All that quantifiable coal just below the surface within our shores might not be such a bad bet after all! On top of this we hear that carbon tariffs are likely to be frozen thus hammering future investment in wind power.Ask yourself how we suddenly replace the 40% of cheap reliable coal powered electricity at an affordable price.
The price of ARA Coal (coal shipper to N.W. Europe and therefore near the UK spot price) has slipped from c £67 in January 2013 to c£47 by Thursday last week. ATH Resources and Scottish Coal went bust when the coal price was c £60. Any views about what this decline in coal prices might mean for HSP?
Right again moneybags our friend bev 88 is not reading between the lines on Hsp. It's an amazing acheivement to start as a bulk transport company to evolve into what it has but who made that happen? The current management Or people who have sold up and retired or moved on. Mr banham has been left holding the baby, yes he is very wealthy in his own right but how does he now get out himself and sell the remainder of his stock? He has to deliver a pipeline of probably 3 years guaranteed growth numbers in both sales a nd profit and give good reason why at such a young age he wants out health is usually a good one. Can Hsp do that and who takes the reins as the old guard all gone a new CEO from a completely different background appointed by the city. The industry they operate in is old school. There are no books or manuals on how to run bulk tippers or sell coal it's in the blood and that's why it's a company from the north east that is trying to be the last man standing. The management team that transformed it from transport to today need to do the same again and transform from coal other logistics/energy whatever or reverse into something big before it's too late and I don't think this management team has demonstrated their ability to do that it's a huge task and messing about in opencast is a last ditch attempt at buying more timekeeping paid big money for tinkering with shareholders investments. Best days unfortunately IMO are behind this company. Right again moneybags hansa trust has bailed out. Last I have to say on this company wonder what the founder and the fd that built this thing are upto? They were the real clever ones
Probably my final word on this...see the last line of this article in particular. The cold, hard facts of investing in coal are what you must consider, not what any persuasive salesman might tell you: http://www.businessgreen.com/bg/news/2330346/has-chinas-coal-boom-hit-the-buffers?
There has been some chatter here on the future fortunes of the UK Coal Industry. If you want to read a free analysis of the future of the UK Coal Industry, based on figures / statements provided by the Department of Energy and Climate Change, Michael Fallon, The Energy Secretary and the Coal Authority then download 'Assessing the Need for Coal' (21pgs, 12 References) (Jan 2014) from: http://coalaction.org.uk/wp-content/uploads/2014/01/Finak-C1-ASSESSING-THE-NEED-FOR-COAL.pdf This summarises the current situation. However things may be changed by the Budget as various groups, the Coal Forum, the Carbon Capture and Storage Association and the TUC amongst others, have been lobbying hard to be allowed to continue by means of the subsidy system in the new Energy Act and by means of freezing any more increases in the Carbon Floor Price / Carbon Tax to ensure that some of the existing coal fired power stations have a longer life than anticipated. This would result in more Carbon Dioxide emissions , Acid Rain Sulphur Dioxide emissions, various Nitrous Oxide emissions associated with causing premature death let alone more environmental damage caused by opencast mines. On the latter point Scotland has 32 un-restored opencast mines that will cost the taxpayer,it seems ,c£200m to restore and in Wales, the estimated cost of restoring just one site, East Pit, is £115m. Such is the nature of the industry you are investing in if you hold shares in this Company.
Two further thoughts. Coal is not declining more gradually. It is in fact accelerating. The other, I believe Hansa Trust have in fact sold a sizeable block of shares recently...
You seem to be living in a disconnect with reality. I'm not sure what the consensus is, that you suggest exists. Why any investor wants to put their cash into an operation that is not growing but declining, I cannot imagine. You appear to have a lot of personal faith in these individuals. You appear to have been charmed by their words. I would have said a more sensible position for any investor is to look at the market with cold hard detachment. You come across as a bit of a fanboy, viewing things from an emotional position, rather than making a considered analysis. I hope you've got lucky pants too... However, I think the clever money is getting out. You're going to find yourself in the same position as the shareholders of SC and ATH. You've had the benefit of some valuable free advice from a couple of us here. Use it wisely and don't repeat the mistakes of others!
We seem to be nearing a consensus of sorts. The delivery on opencast will,of course be key,and yes,we know that coal generation is in decline-possibly more gradual than generally assumed.My standpoint is that this management has demonstrated the capability to meet challenges in it's areas of expertise and has delivered consistently on it's promises. Furthermore they have a strong and loyal institutional backing eg Hansa Trust,Artemis,Odey etc. My various conversations with the Board ,and other seasoned observers, gives me the strong feeling that they will have the last laugh on the doubters. As always time will tell but so far the market appears to side with me!