31 March 2015
Australia set to once again be the world’s largest coal exporter
Statement from Greg Evans, Executive Director – Coal, Minerals Council of Australia
The latest Resources and Energy Quarterly published by the Department of Industry confirms that coal has a bright future in Australia and is once again set to be the world’s largest coal exporter by 2017.
Data contained in the latest report emphatically refutes claims by industry detractors that coal is in decline. While lower prices will continue to present a challenge for the industry, longer term demand fundamentals remain strong.
The process of industrialisation and urbanisation in Asia underpins the positive outlook for Australian coal, with our metallurgical coal and thermal coal playing an integral role in meeting steel making demand and the provision of affordable and reliable base load energy.
Australian coal is in demand across a diversity of markets notably Japan, China, India, Taiwan and Korea while many fast growing ASEAN countries will increasingly look to Australia as a reliable supplier of thermal coal for their electricity generation requirements.
The Quarterly report notes:
- World trade of metallurgical coal is forecast to increase by 2.3 per cent to 316 million tonnes in 2015.
- While China’s imports of metallurgical coal declined by an estimated 16 per cent to 65 million tonnes in 2014, India’s imports of metallurgical coal increased by an estimated 18 per cent to 44 million tonnes in 2014.
- Further, China’s imports of metallurgical coal are forecast to increase by 6 per cent to 69 million tonnes in 2015, and India’s imports of metallurgical coal are projected to increase at an annual average rate of 2.7 per cent to 57 million tonnes in 2020.
- Both China and India are expected to strongly rely on imports to meet this demand as local production is higher cost and lower quality.
- Over the next few years, Australia’s metallurgical coal production is projected to increase at an average annual rate of 1.8 per cent to 208 million tonnes in 2019-20.
- Australia’s exports of metallurgical coal are forecast to increase by 5 per cent to 190 million tonnes in 2014-15.
- The large number of efficient and clean coal-fired power plants under construction indicates that coal will remain the cheapest, most reliable source of energy production in the world for many years to come.
- Australia’s thermal coal production is forecast to decline slightly to 243.5 million tonnes in 2014-15.
- However, Australia’s thermal coal production is expected to increase to 246.3 million tonnes in 2015-16.
- And, from 2016-17, growth in production is projected to accelerate as projects completed during 2015 and 2016 approach full capacity.
- The Report notes that despite challenging times, Australian coal producers are gaining a bigger share of the coal export market. Exports are forecast to increase by 3.3 per cent to 201 million tonnes in 2014-15, reflecting strong growth in exports in the second half of 2014.
- Over the remainder of the outlook period, Australia’s thermal coal exports are projected to increase at an average annual rate of 3 per cent to 234 million tonnes in 2019-20.
Coal will remain a major economic driver in Australia and a significant contributor to national income that helps underpin investment, jobs and growth in the mainstream economy and across our regions. The coal industry will be a key part of the world’s electricity generation for many years to come and continue to provide benefits for millions of Australians through cheap and reliable energy generation