Funding from state-owned Japan Bank for International Cooperation would help drive sales of the plants that cost about $3.1 billion apiece, said a senior trade ministry official involved in producing the 113-page draft plan, due to be released today. The ministry said in an e-mail it will brief the media on a report about clean coal at 4:30 p.m. in Tokyo.

Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. compete with General Electric Co. and Germany’s Siemens AG to supply plants that convert coal into gas before generating power, making it easier to trap carbon-dioxide emissions. Japan wants to benefit from new demand for clean energy after world leaders including U.S. President Barack Obama pledged to back technologies that reduce gases blamed for global warming.

“The government’s marketing campaign will be a big plus for Mitsubishi Heavy in the competition to capture the market for ‘green technology,’” said Futoshi Usui, a Tokyo-based analyst at Credit Suisse, who rates the stock “outperform”.
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Read the rest of Japan May Offer Loans to Fund Clean-Coal Power Plants (15 words)

In its Business Outlook, the Canberra economic agency says the ”spectacular fall from grace” of commodity prices will slash tax revenue and cause businesses to shelve investment in infrastructure and project development.
There are concerns that, as mines shut down or reduce capacity, the benefits of the next boom could be missed when the economy and the resource cycle turn.
“We’re amid the largest market meltdown in modern history,” Access says.
“Commodity markets came to this late but they saw the same shocking rout in pricing recently seen in many markets.
“We’ve long thought that commodity prices have had to come back, substantially so.
“We didn’t think the blow-up would come this soon or be quite this spectacular, but blow up it has.”
The Access analysis finds that spot market prices are back to the level of five to six years ago, with current weakness abolishing all of the gains.
The unprecedented rise in commodity prices delivered the Government a revenue windfall of at least $40 billion, causing the surplus to balloon.
As the credit crunch pushes the world into recession, Access forecasts that April contract coking coal and iron ore prices will be halved.
Access’s outlook is more negative than that of Goldman Sachs, which says iron ore prices will be off by up to 30 per cent as demand sours.
“Given what has happened to global steel prices, we expect coking coal and iron ore contract prices to be slaughtered come April, with steaming coal prices to also be hit hard,” Access says.
“It took four or five years for the good news to build on industrial commodity prices. It will take rather less than two years for the bad news to carve a very large and painful chunk from Australian incomes.”
In its broader outlook, Access said it believed mining output would be cut back to 7.8 per cent in the next two financial years but the greatest pain would be felt in the resources labour market.
As the national jobless rate edges up to 4.5 per cent, it is predicted that thousands of mining and resources jobs will be slashed as profits fall..
Access forecasts an 11.4 per cent decline in the number of mining jobs in the next financial year, as mining capacity is cut back.
But Access predicts the jobless figure will then rebound slightly to slow workforce growth of just 1 per cent.
“Mining has been the powerhouse of the Australian economy in recent years, with the income it earned encouraging a rapid lift in investment and firing up a bunch of other sectors,” the agency said.
The negative outlook for the Australian economy is now shared by NAB, which believes a technical recession will be narrowly avoided in the next year.
In a revised outlook, the bank’s economists tipped that the economy would contract by 0.2 per cent in the final quarter of the past calendar year.
NABCapital chief economist Robert Henderson said the prospects for the economy would be grimmer if agriculture did not strengthen after recent rains.
“Our current forecasts for Australia have the economy just missing by a whisker the shorthand recession definition of two quarters of negative growth,” Mr Henderson said.
“The forecasts include a strong contribution from the farm sector as the drought breaks and the rural economy bounces back.
“Under most definitions, Australia’s non-farm economy is in recession now and we will remain there until the middle of the year.”

Under such a scenario, Heap and Tonka expect coking coal prices to fall 50% to an annual average $150/metric ton next year. “Spot prices had gone to the moon, to record levels, before the financial meltdown,” says Jim Thompson, editor of Coal & Energy Price Report, an industry newsletter, who expects 2009 prices to settle around $200.

Spot prices for metallurgical coking coal used to make steel increased as high as $300/metric ton throughout Asia in the first half of 2008 (depending on supplier and buyer), up from an average $120 in 2007. The price was due to strong first-half steel demand in India, China and some other Asian nations-and to numerous supply problems. The regional disruption hasn’t affected prices in the European Union or North America, where the delivered price of $110 was only slightly above the 2007 average of $95.

Steelmakers in China already have begun lobbying for calendar-year pricing for iron ore, rather than fiscal-year contracts-and some analysts expect the same to happen in the coal contracts. “Many U.S. steelmakers already have settled on 2009 prices, which were phenomenally high,” says Thompson of the Coal & Energy Price Report. “I doubt those settlements will sit now and suspect they will be renegotiated.”
Heap and Tonka add that “this cycle has seen an unprecedented level of steel production cuts,” so the Citigroup analysts believe that continuing curtailments in production are likely to result in delays to price settlements. “Neither producers nor consumers see it in their interest to settle annual prices in such a turbulent market,” Heap and Tonka write.