How a Climate Hazard Turned to Disaster Due to Unchecked Infrastructure Development in Northern India

Article by Elizabeth Colebourn in the Wall Street Journal

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The devastation in Uttarakhand in northern India this week was the result of a climate hazard – sudden and extreme rainfall.

But human actions and decisions are what turned a hazard into a disaster.

Climate change and development are combining to create a potent mix increasing the risk of disasters from extreme weather events, which are happening with greater frequency.

The Intergovernmental Panel on Climate Change (IPCC) published a report in 2012 on Managing the Risks to Extreme Events and Disasters , which concluded that even without taking climate change into account, the risk of disasters will continue to increase as more people, infrastructure and businesses – are exposed to weather extremes.

Rapid, unchecked development is making India’s people and its economy vulnerable.
Hasty construction of buildings on the banks of rivers in Uttarakhand, which have now been swept away by the floods, is a tragic example of this.

The state’s draft action plan to tackle climate change recognized the risks of poor planning. It noted that the blasting and excavation when constructing the 40,000km of roads in the state disturbed the land, as has the deforestation required to make room for such infrastructure.

“These operations often create geological disturbances in the mountains, and set into motion dynamic force causing the movements of slip zones, cracks, fissures and weak planes,” the action plan said.
Many thousands of people are stranded after landslides, triggered by heavy monsoon rains, destroyed roads and blocked access routes in the mountainous region.

The state had an average annual growth rate of over 12% between 2004-2012, driven largely by new manufacturing, transport, warehousing and hotels. Some environmental activists are now asking why this construction was allowed to happen in eco-sensitive zones,  including along the Bhagirathi River that burst its banks on Saturday June 15.

Disaster risk reduction measures are in evidence across India, but not at the scale needed. Uttarakhand has an extensive training and communication programme, focused on building awareness for disaster preparedness. Guidelines and regulations for disaster-resilient construction are in place. However, like all states, the funding and political capital available for such preventative actions is dwarfed by that banked for relief efforts.

The real lesson from Uttarakhand’s tragedy is that reducing the risk of an extreme weather event becoming a disaster is not the responsibility of just those with ‘disaster’ in their job title.
A new approach is needed which takes a long-term perspective and sees disaster risk and adaptation to climate change as completely integral to development

Uttarakhand should not be singled out for this apparent lack of foresight. Every state in India is at risk of different climate extremes – whether an especially fierce heat wave, cyclone, drought, flooding or sea level rise – and there are examples from across the country of planning and investment decisions that do not take these risks into account.

Climate change is projected to make the situation even more severe and uncertain.  The IPCC report also states that by 2050 we should expect not only more regular extreme weather events, but also unprecedented extremes;  Cyclones will hit areas that they have not reached in the past, the report says.

Increasing the resilience of communities to the slow, steady onset of the impact of climate change, such as unpredictable rains and high temperatures, should be the aim.

The Government of Uttarakhand has in fact taken the first step, by drawing up a State Action Plan on Climate Change across sectors which includes managing the risks of disasters. It is titled “Transforming crisis into opportunity” and aims to build the resilience of the state’s development plans to the effects of climate change. However, the challenge now is to implement the plan.

Scientists have to work with uncertainties and policy makers have to plan for an unclear future. But, what we know for sure is that if development does not take into account the risk of natural disasters, then the loss of life from extreme weather, will continue to increase.

Elizabeth Colebourn, is Project Manager and India Lead at the Climate Development Knowledge Network, an alliance of organizations led by PricewaterhouseCoopers and based in London working on climate change compatible development.

15yr High for Air Quality Index in Singapore - Worsening due to Forest Fires in Indonesia

Watch BBC News article

Haze in Singapore has soared to hazardous levels, prompting government health warnings. At 13:00 local time (05:00GMT) Singapore's pollution standards index (PSI) reached 371, breaking all previous records.

Visit National Environment Agency for current pollution levels in Singapore.

The smog is caused by illegal forest fires in Indonesia's Sumatra island. Emergency talks between Singapore and Indonesia are taking place in Jakarta.

 BBC World presenter Rico Hizon says taxi drivers in Singapore are reporting an increase in the number of passengers going to hospital.

More in News at BBC

Air Pollution News & Alerts - June 20th, 2013

Last on May 1st, 2013

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Environmental Expert, June 20th, 2013
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Bloomberg, June 19th, 2013
Chinese City Proposes Vehicle Restrictions to Reduce Smog.

Live Mint, June 18th, 2013
High diesel, mercury pollution linked to autism risk.

The Energy Collective, June 18th, 2013
Indian Coal Plant Standards Weaker on Pollution Than China.

The guardian, June 18th, 2013
China launches new measures to tackle air pollution.

The New York Times, June 15th, 2013
China Sets New Rules Aimed at Curbing Air Pollution.

The Washington Post, June 14th, 2013
Under pressure from public, China approves measures to curb air pollution in its cities.

Phys.Org, June 14th, 2013
California's efforts to clean up diesel engines have helped reduce impact of climate change on state.

Xinhua Net, June 14th, 2013
Cabinet introduces tough measures to curb air pollution.

Environmental Health News, June 14th, 2013
Black carbon linked to attention problems in boys.

China Daily, June 13th, 2013
Clearing the air.

City of Bejing, June 13th, 2013
Artists share perspectives on climate change.

Energy Tribune, June 12th, 2013
European Coal Pollution Causes 22,300 Premature Deaths a Year.

The Nation, June 12th, 2013
New software lets people check pollution at home.

Mongolia News, June 12th, 2013
Modun Resources wins preferred coal briquettes supplier to Mongolian Govt.

The Guardian, June 12th, 2013
European coal pollution causes 22,300 premature deaths a year.

Global Times, June 12th, 2013
Changing winds blow away pollutants.

Tehran Times, June 11th, 2013
Tehran experiences air pollution 200 days annually.

Huffington Post, June 11th, 2013
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Raising air pollution awareness ‘of key importance.

Indian Express, June 10th, 2013
Effects of pollution on monsoon to be studied by experts in Nepal.

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Green Week: Europe's cities call for far greater ambition in tackling air pollution.

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Smog gets in their eyes.

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Shanghai will put a lid on coal-fired boilers.

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Strict measures to check air pollution.

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Airlines agree to curb their greenhouse gas emissions by 2020.

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Economic growth behind air pollution.

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New tourist vehicle rules Thursday.

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China Launches Measures to Address Urban Air Pollution

Link to the article on The Guardian

China's cabinet has outlined measures aimed at improving the country's air pollution problems, which have plagued many of its larger cities over recent years.
 
One of the main measures, announced in state media over the weekend, is a target to reduce emissions from heavily polluting industries by 30% by the end of 2017. In statement after a meeting chaired by Premier Li Keqiang, the State Council said there would be "tough measures for tough tasks".

In January and February 2013 air pollution levels in the capitial Beijing and a number of other cities rose to what are believed to have been record levels. Dubbed the 'airpocalypse', Beijing was shrouded in a thick cloud of smog. On more than one occasion the US embassy in the city, which monitors air quality and publishes the results on a Twitter feed, described the levels as "beyond index".
The new measures do not outline which industries would be included in the 30% target. However, in February in response to the air pollution crisis and a high level of public outcry, the government announced that six heavily polluting industries including iron and steel, cement and petrochemicals would have to comply with "special" emission limits from the start of March. Details of the limits were unclear.

Another of the new measures announced is to "enhance control" of PM2.5 pollution, which are fine particulates that measure less than 2.5 microns in diameter. The Chinese authorities only started to measure this type of pollution in Beijing in October 2012. This type of pollution is considered particularly dangerous to health as the fine particles can lodge deep within the lungs and enter the bloodstream. The statement said that a ranking of air quality in major cities should be made public.
Ten measures were outlined by the State Council including:

Emergency response plans to be carried out by local governments during periods of bad pollution which include restricting traffic and limiting emissions from industry.

"Strict controls" for heavily polluting industries that are looking to expand.

Ensuring that construction projects pass environmental evaluations before they are given permission to go ahead.

Previously concerns have been raised about the enforcement of environmental policies and regulations by local officials. Under the new measures, the State Council said that local governments will be held accountable and their performance assessed on reducing air pollution.
The statement acknowledged that air pollution is an increasingly "conspicious and discussed problem". It also stated that:

"Curbing air pollution is a complicated and systematic project that requires long and arduous efforts."

The Chinese administration under President Xi Jinping has pledged to deal with the problem of pollution. Earlier this in June, Vice Premier Zhang Gaoli in a speech at the Fortune Global Forum in Chengdu said the government would take action, especially in relation to reducing PM2.5 pollution.
He said:

"We will attach greater importance to addressing problems resulting from environmental pollution, and strike a proper balance between optimizing economic structure, boosting development that is driven by science and technological innovation, and conserving resources and protecting the environment. We are determined to make long-term and unremitting efforts to solve the problem."

Meanwhile, Greenpeace has released results of tests they carried out earlier in 2013 on air pollution in Beijing to analyse what it contained. The analysis was carried out during one of the worst periods of air pollution in the capital. They found that the concentration of arsenic in the PM2.5 particles in Beijing's air contained a concentration of arsenic that is "above the norm".
The study found:

the average daily concentration median of heavy metal arsenic in Beijing's PM2.5 was 23.08 nanograms per metre cubed. According to Ambient Air Quality Standards issued in February 2012, the annual mean reference concentration limit value is 6 ng/m3, meaning the concentration detected during the course of this research is 3.85 times the limit. During heavy pollution days, the concentration median reached 34.68 ng/m3, and the highest average daily concentration during this period reached 70.91 ng/m3.

It also found that for four days during the 15-day testing period the concentration of cadmium rose above the annual limit value and two days in which lead concentration rose above the limit level.
Beijing did not fare well in comparison to other cities around the world:

Compared to previous research, the arsenic concentration of PM2.5 in Beijing is constantly at a high level. And while the levels of this period are lower than previous, it is still significantly higher than other international cities.

Ammonia Pollution in China - Linking to Air Pollution from Energy Generation

Read the full article at China Energy Group, Princeton University
By Kang Sun

It has been four years since the Beijing Olympic. At that time I was in a big research team to monitor the air quality of Beijing during the Olympic games. However, my work was not that exciting as it sounds. I had to stay in a small windowless room on top of the science building in Peking University, taking liquid samples exactly every 10 minutes for at least 4 hours per day. It took me even more time to analyze these samples afterwards. We were trying to measure ammonia (NH3), a very important atmospheric component, but we only had this tedious way to do it.

Ammonia plays a critical role in the atmosphere because it contributes to the formation of aerosols, or particulate matter. Aerosols affect the earth’s radiation budget and climate through their effects on cloud formation and precipitation. Moreover, smaller aerosols have been associated with adverse health effects. I have heard many friends complaining that they are more susceptible to colds and flu when staying in the northern China due to polluted air. If you take a look at the satellite image (a MODIS image on October 18, 2011 is shown here), you can find that the huge aerosol plume covers the entire north China plains and extend to the Pacific Ocean. When you land on the Beijing Capital International Airport, often times you can see the whole city is immersed in a milky, sometimes bluish haze. These aerosols can stay in the atmosphere for more than a week, enough time for them to travel across the Pacific when the atmospheric condition is favorable for transport.

These hazes or plumes generally consist of secondary aerosols, or aerosols formed in the air. In other words, they are not directly emitted, but generated by reactions of gas phase components, like SO2, NOx (NO, and NO2), ammonia, and VOCs (volatile organic compounds). The composition of these aerosols is well known: about two thirds are ammonium salts, such as ammonium sulfate, ammonium nitrate, etc. Nitrate and sulfate in the aerosols come from some notorious pollutants: SO2, NO, and NO2. These pollutants are now routinely measured in most air quality monitoring stations and the regulation standards have been well established in both China and the US. However, it is very difficult to get aerosol formation if only SO2 and NOx are present. Ammonia is the key step to neutralize SO2 and NOx to aerosols, because SO2 and NOx are acidic gases and ammonia is the only alkaline readily available in the atmosphere.

Considering its importance in atmospheric chemistry, our knowledge on atmospheric ammonia is extremely limited. There are not many efficient and cheap ways to measure it. Otherwise, we would not sacrifice our time during the Olympic to do the boring sampling. In the US and Europe, some universities and research institutes use very expensive instrument to monitor ammonia, but there are very few measurements in China. Given the heavy aerosol load, we would expect very high ammonia emissions in north China plain. Power plants and auto vehicles can generate SO2 and NOx, but serious aerosol pollution can only happen when enough ammonia is provided. Comparing to SO2 and NOx, the regulations on ammonia emissions are very weak even in the US. When you go to the emission test of your car, generally CO, SO2 and NOx are all tested, but not ammonia. Nevertheless car emission is a significant ammonia source. I have tested the ammonia emission from my own car using sensors in my lab, and I did see a lot.

The diversity and variety of ammonia sources also complicates the problem. Livestock and fertilizer are among the largest sources. A dairy farm is to ammonia as a power plant is to SO2. Modern power plants have scrubbers to eliminate SO2 emission, but dairy farms have little control on their ammonia emission. Just go to a dairy farm and smell it! On-road vehicles are another significant ammonia source, especially in China, where more vehicles are sold per month than in the US.

The environment and climate concerns are always associated with energy issues. SO2 and NOx emitted in energy generation have been emphasized for a long time, but ammonia is rarely discussed equally. Controlling ammonia actually can be a more efficient way to mitigate the environment impact from energy generation.

Air Pollution from Coal Combustion Responsible for 22,300 Premature Deaths Annually in Europe

Link to the article in The Guardian

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Air pollution from Europe's 300 largest coal power stations causes 22,300 premature deaths a year and costs companies and governments billions of pounds in disease treatment and lost working days, says a major study of the health impacts of burning coal to generate electricity.

The research, from Stuttgart University's Institute for energy economics and commissioned by Greenpeace International, suggests that a further 2,700 people can be expected to die prematurely each year if a new generation of 50 planned coal plants are built in Europe. "The coal-fired power plants in Europe cause a considerable amount of health impacts," the researchers concluded.

Analysis of the emissions shows that air pollution from coal plants is now linked to more deaths than road traffic accidents in Poland, Romania, Bulgaria and the Czech Republic. In Germany and the UK, coal-fired power stations are associated with nearly as many deaths as road accidents. Polish coal power plants were estimated to cause more than 5,000 premature deaths in 2010.

The cumulative impact of pollution on health is "shocking", says an accompanying Greenpeace report. A total of 240,000 years of life were said to be lost in Europe in 2010 with 480,000 work days a year and 22,600 "life years" lost in Britain, the fifth most coal-polluted country. Drax, Britain's largest coal-powered station, was said to be responsible for 4,450 life years lost, and Longannet in Scotland 4,210.

According to the study, Polish coal power plants have the worst health impact in the European Union. The Polish government and Polish utilities are planning to build a dozen new power plants. The utility companies with the worst estimated health impacts, according to the report, are PGE (Poland), RWE (Germany and UK), PPC (Greece), Vattenfall (Sweden) and ČEZ (Czech Republic).

Acid gas, soot, and dust emissions from coal burning are, along with diesel engines, the biggest contributors to microscopic particulate pollution that penetrates deep into the lungs and the bloodstream. The pollution causes heart attacks and lung cancer, as well as increasing asthma attacks and other respiratory problems that harm the health of both children and adults.

"Tens of thousands of kilogrammes of toxic metals such as mercury, lead, arsenic and cadmium are spewed out of the stacks, contributing to cancer risk and harming children's development," says the Greenpeace report, which does not emphasise the impact of coal burning on climate change.

The 300 plants produce one-quarter of all the electricity generated in the EU but are responsible for more than 70% of the EU's sulphur dioxide emissions and more than 40% of nitrogen oxide emissions from the power sector. The Greenpeace report notes that coal burning has increased in Europe each year from 2009 to 2012.

"The results are staggering. The only way to eliminate the health impacts associated with burning coal in Europe is to phase out these dirty power plants and replace them with clean renewable energy. The current EU renewable energy target has been proven to boost renewable energy and help modernise energy systems and the economy. Europe must continue down the path of clean renewable energy by setting an ambitious, binding 2030 renewable energy target," said Greenpeace International energy campaigner Lauri Myllyvirta.

The air pollution from coal burning comes on top of transport emissions that are still increasing despite attempts by the EU to force reductions. According to the European Environmental Agency, more than 90% of urban population in the EU is exposed to fine particle (PM2.5) and ozone pollution levels above the World Health Organisation guidelines.

Greenpeace International is calling on the European commission to come forward with proposals for a binding renewable energy target of 45% and a greenhouse gas reduction target of at least 55% by 2030.

What’s Good for the Climate May Not be Good for the Air

today..

From Mr. Lalloobhoy Battliwala

Repeat after Kirk Smith: "If one is going to put carbon in the atmosphere anyway, CO2 is the least harmful of all.. "

Even Obama and Xi accepted as much two days ago.

IEA says we can't afford 20 years of listlessness. 

No, we can't afford 20 years of hysteria, circus, jumping up and down, screaming and tears. 

Health first. Save lives and enhance productivities, employment. Empower people to defend themselves; save them from the saviors of the earth. 

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An article from Euractiv

Trade-offs: What’s good for the climate may not be good for the air

From wood stoves to diesel engines, the European Union has promoted fossil fuel alternatives and technology to help meet its obligations to reduce carbon dioxide emissions blamed for climate change. But these are also contribute to dirty air, leaving regulators to figure out some legislative repair work.

Some efforts appear to be paying off. In a new report, the European Environment Agency (EEA) says the EU’s greenhouse gas emissions fell 3.3% in 2011 and were 18.4% below 1990 levels. That would put the EU well on its way of achieving a 20% reduction from 1990 levels by the end of this decade.
The Eurostat statistical agency, meanwhile, reported that carbon dioxide (CO₂₎ emissions fell 2.1% in 2012 after declining 4.1% a year earlier.

But numbers on carbon emissions aren’t necessarily good news for air quality – the focus of the EU’s Green Week this week.

A ‘major’ environmental problem

The EU’s achievements mean little while the rest of the world still pumps out record levels of carbon, and Europe’s methods for cutting greenhouse gases come with side effects, including higher emissions of nitrogen oxides (NOx), particulate matter (PM), ground-level ozone (O₃), soot and sulphur that have both short- and long-term effects on human health.

“Air pollution remains one of the major environmental problems in Europe, affecting health and well-being of European citizens,” the EEA says in a new report on the impact of pollution on human health.

Air pollution was ranked as one of the top-10 risk factors for health globally, according to a global review of the burden of diseases published in December last year by the British medical journal The Lancet.

According to the study, over 430,000 premature deaths and over 7 million years of healthy life were lost across Europe in 2010 from exposure to fine particulate matter (PM_2.5), with 166,000 premature deaths in Western Europe, 95,000 deaths in Central Europe, and 169,000 deaths in Eastern Europe, which includes Russia.

“Everyday exposure to outside air pollution in Europe is now recognised as one of the big factors affecting our health,” said Anne Stauffer, deputy director of Health and Environment Alliance (HEAL). “For the first time, the Global Burden of Disease assessment has ranked an environmental factor among the more widely discussed ‘life-style’ risk factors, such as tobacco and alcohol.”

Trade offs

Markus Amann, an expert on air pollution and greenhouse gases, said European policies show there are trade-offs in reducing greenhouse gases. “Ill-designed climate policies can result in higher particulate matter emissions,” he told a recent air quality conference in Brussels.

Amann, who works at the International Institute for Applied Systems Analysis in Austria, mentioned support for diesel engines as a case in point.

While diesel engines were promoted in Europe for their lower carbon emissions, they are blamed for stubbornly high levels of gases like nitrogen oxides (NOx) that contribute to ozone and acid raid.

Technological advances using advanced selective catalytic reduction (SCR) of NOx in vehicles, industrial smokestacks and ships are now required or are being phased in under EU and international standards to help deal with the problem. The technology can cut NOx emissions by as much as 90%, yet because older vehicles and some industrial plants are exempt, it could be years before the benefits of these technologies are realised.

Another example are biofuels and biomass, which have been promoted though European policies, including the Renewable Energy Directive, as part of the bloc’s carbon-cutting efforts. Yet their impact is far from benign.

Spurred by a combination of concerns over high food prices and doubts about the climate benefits of plant-based vehicle fuels, the European Commission last October made a U-turn on its policies that set targets to encourage the use of ethanol and biodiesel.

Where there’s smoke, there’s pollution

Mark Lawrence, the scientific director of the Institute for Advanced Sustainability Studies (IASS) in the German city of Potsdam, says biomass is considered green and advertised as such.

“If you think about the grey, brown and black smoke plumes above chimneys, you will see that this is not so green,” Lawrence told the science conference co-sponsored by his institute.

“But probably nobody I’ve talked to in the public is aware of the pollution that comes out of their chimneys. They are aware of the smoke that comes out, but they think it’s something that is just an irritant to their neighbours.”

Wood stoves are considered climate friendly because they emit relatively little carbon, but they contribute to air quality problems because the produce black carbon – an ingredient of soot – and NOx, which health officials say contribute to respiratory and cardiovascular problems, and environmental campaigners say contribute to ozone and affects plants and wildlife when they mix with rain to produce acidic deposits.

Lawrence was among the speakers at the conference on air quality and climate change, held on 21 May in Brussels, who pointed to the often divergent policies where efforts to combat climate change without considering the effect on air quality.

“If the policies are enforced, I think they are adequate to meet the limit values. With the human health concerns, science tells us that there are no thresholds, so they benefit from reducing it to very low concentrations.”

Scandinavian countries in general have been leaders in reducing CO₂ emissions, and in using biomass for heating and energy, but they also exceed the Air Quality Directive’s annual mean value of NOx, which is 30 micrograms per cubic metre.

NOx emissions decline

Overall, NOx emissions have fallen since the 1990s, though at a much slower pace than other leading pollutants. When exposed to solar radiation, NOx reacts with other chemicals and gases to form ozone, which is harmful to humans and ecosystems and acts as a greenhouse gas. It also mixes with rain and is carried through the air, affecting areas well beyond its source of emission.

Health and environmental experts point to another culprit in NOx and soot pollution: biomass, or the use of wood and plant waste for home and water heating. Figures show that about half of the EU’s renewable energy targets are set to be achieved through the use of biomass.

Wood stoves, which are billed as a renewable energy and have grown in popularity across Scandinavia and in Central Europe, produce soot and high levels of NOx, black carbon – fine particulates that create soot - that are culprits in ground-level pollution and acid rain. Black carbon also contributes to climate change.

Experts at the Brussels conference said more effort needs to be put into coordinating climate and pollution policies to avoid the policies that address one problem but may create another.

IEA sees stalled progress

But Europe’s climate and pollution efforts, no matter how divergent, still put it ahead of other regions of the globe. The International Energy Agency reported recently that CO₂ emissions have changed little since 1990, despite regulatory efforts and the rise in renewable energy production.

“The drive to clean up the world’s energy system has stalled,” IEA Executive Director Maria van der Hoeven said when the Paris-based organisation released its clean energy monitoring report. “Despite much talk by world leaders, and despite a boom in renewable energy over the last decade, the average unit of energy produced today is basically as dirty as it was 20 years ago.”

“As world temperatures creep higher due to ever-increasing emissions of greenhouse gases like carbon dioxide – two thirds of which come from the energy sector – the overall lack of progress should serve as a wake-up call,” van der Hoeven said.

“We cannot afford another 20 years of listlessness. We need a rapid expansion in low-carbon energy technologies if we are to avoid a potentially catastrophic warming of the planet, but we must also accelerate the shift away from dirtier fossil fuels.”

Coal Briquettes in Ulaanbaatar, Mongolia

Link to the articl

Modun Resources is on the road to commercialising the wholly-owned Nuurst Coal Project in central Mongolia, with the company's subsidiary (Modun Resources LLC) being selected as a preferred supplier of coal briquettes to the Mongolian Government.

Modun was one of four tenderers through the Mongolian National Committee for Air Pollution Reduction which  sought domestic and international expressions of interest to establish a new cleaner fuel production facility.
The next step for Modun is that the key terms and conditions of the Product Sale and Purchase Agreement will be negotiated directly with the Mongolian Government, with the briquette plant to have an initial name plate capacity of 200,000 to 250,000 tonnes per annum.

Rick Dalton, managing director for Modun, commented: “Discussions with the Mongolian Government about formalising this arrangement into an off-take agreement for the supply of Nuurst coal briquettes will commence immediately."

Mongola is targeting around October / November 2014 to be using the cleaner coal. The government is committed to reducing pollution as evidenced by the Presidential election campaign where it has become a centerpiece of Tsakhiagiin Elbegdorj re-election campaign.

Modun was selected as one of four preferred suppliers as part of the government's 'Clean Air Initiative' to reduce air pollution in Ulaanbaatar.

The company's successful proposal was based on using thermal coal from its Nuurst Project and creating briquettes using a binderless coal briquetting process, which after being independently tested in Australia and Mongolia, have resulted in a substantial increase in energy and decrease in emissions.

This proven technology crushes the raw coal and uses hot gas to dry the coal to extract moisture.  The dry coal is then compressed under extreme pressure to bind it together into briquettes.  This is a low cost mechanical solution.

This combined with the low costs to run the briquette plant will ensure that Modun can supply a low emission, low cost and high performing product at a competitive price.

Ulaanbaatar ranked No.2 of world city pollution list

Ulaanbaatar is the second most polluted city in the world according to the World Health Organisation, following Ahwaz in Iran.

The majority of the pollution in Ulaanbaatar stems from the burning of low grade, high moisture raw coal in the Ger district and local power stations, with the establishment of the National Committee for Air Pollution Reduction (Committee) set-up to specifically focus on the issue.

With Mongolian energy demands continuing to rapidly grow - with energy demand forecast to grow 1000mw to 4000mw in the next 10 years - the county needs to tackle the pollution issue immediately.


Nuurst coal briquettes within the 'Clean Air Guidelines'Importantly - the emissions produced from Nuurst Project coal briquettes fall within the 'Clean Air Guidelines' required by the government, which enabled Modun to be successful with the tender and become a preferred supplier.

Dalton added, "We have been through an extensive testing process and we are excited to be the only international company selected as a preferred supplier of coal to the Mongolian Government under their Clean Air Initiative."

Modun is the only preferred supplier who owns their coal reserve, which importantly guarantees coal supply for making the briquettes and greater control, while also placing the company in a position to have compelling economics by reducing the coal acquisition costs over its competitors.

The Modun licenced area is large and has room for the briquette plant to be built on site right next to the coal mine, which will further reduce costs and logistics, with the binderless coal briquetting process a proven technology and a very cost effective way of upgrading coal quality

Another plus for the company is that its relationship with Mongolian Government is strong, with Modun hosting two government delegations to Australia to learn about the technology and continue to have discussions at high levels within the government.

This also places Modun in a position to potentially expand the size of the agreement after the first year.

The Nuurst Coal Project has a 478 million Resource of sub-bituminous coal, and is close in infrastructure - including being six kilometres to existing rail.

Mongolia dependent on coal

Mongolia has vast untapped coal resources and is dependent on coal, due to not having large known gas reserves, while only having limited funds to import power from Russia or China - while there is also a reluctance to be dependent on either of these neighbours for their power supply.

Even with the Mongolian Government continuing to look at alternative options for power generation, the majority of their future power needs will be from a coal source, which is why the government is keen to identify a “clean coal” solution.
Modun is positioned to tap this demand.

Over the last few years the government have trialled semi-coke briquettes, however the results have been unsatisfactory from a government point of view, resulting in the Committee seeking expressions of interest to establish a new cleaner coal production facility earlier this year.


Public support for Modun

Modun has received and been encouraged by public support for the company displayed by the Office of the Mongolian President, along with the various representatives of the Mongolian Government in recent weeks.

Dalton added, "we look forward to working with the government to help achieve the objectives of the Clean Air Initiative."


Key terms of the Product Sale and Purchase Agreement

The key terms and conditions of the Product Sale and Purchase Agreement will be negotiated directly with the Mongolian Government.

Modun was provided with the following information that was used to help support its proposal:

- The briquette plant is to have an initial name plate capacity of 200,000 to 250,000 tonnes per annum;

- Total demand for domestic raw coal usage in the Ger District is between 700,000 to 900,000 tonnes per annum; and

- The pricing for domestic briquettes approved by the Committee for last year's winter was between MNT150,000 to MNT170,000 per tonne (approx. $US105 to $US119 per tonne) (source: www.air.president.mn). Pricing for next years and future winters are to be negotiated as part of the Product Sale and Purchase Agreement.

Analysis

This is a significant achievement for Modun as the only international company selected as a preferred supplier of coal to the Mongolian Government under their Clean Air Initiative.

The differentiating factor for Modun's Nuurst Coal Project over other thermal coal companies within Mongolia is its access to infrastructure - including being six kilometres to existing rail and 35 kilometres from 220kv main power grid, which provides for low CAPEX when compared to other projects.

Another plus is low production operating costs of $US13/tonne, with a 2.3:1 ROM stripping ratio.

This combined with the low costs to run the briquette plant will ensure that Modun can supply a low emission, low cost and high performing product at a competitive price.

The size of Modun's resource also opens up options of export to China as well as any growth in domestic supply.
This is a valuation enhancing win for Modun in the short and medium term.