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The Future of Global Coal Production

Despite its adverse environmental impact, coal was in high demand in 2021. As economies reopened following the start of the COVID-19 pandemic, countries struggled to meet resurgent energy needs. As a readily available low-cost energy source, coal filled the supply gap, with global coal consumption increasing by 450 million tonnes or around +6% in 2021. This graphic looks at the IEA’s coal production forecasts for 2024, and the specific countries projected to reduce or increase their production over the next few years. Many of the top coal-producing countries did not commit to the COP26 pledge. China, the U.S., India, Russia, and Australia abstained, and of those five, only the U.S. is forecasted to reduce coal production in the next two years. With 15 EU countries signing the pledge, the European Union is forecasted to see the greatest drop in coal production at 82 million tonnes, along with the greatest forecasted reduction in coal consumption (101 million tonnes, a 23% reduction). Many of the top coal-producing countries did not commit to the pledge. China, the U.S., India, Russia, and Australia abstained, and of those five, only the U.S. is forecasted to reduce coal production in the next two years. With 15 EU countries signing the pledge, the European Union is forecasted to see the greatest drop in coal production at 82 million tonnes, along with the greatest forecasted reduction in coal consumption (101 million tonnes, a 23% reduction).

Banks gave more than $1.5 trln to coal sector in 2019-2021 – NGOs

Financial institutions channeled more than $1.5 trillion into the coal industry in loans and underwriting from January 2019 to November 2021, despite many having made net-zero

pledges, a report by a group of 28 nongovernment organisations showed. Cutting coal use is a key part of global efforts to slash climate-warming greenhouse gases and bring emissions down to net zero by the middle of the century, and governments, firms and financial institutions worldwide have pledged to take action. But banks continue to fund 1,032 firms involved in the mining, trading, transportation and utilisation of coal, the research showed.

“Banks like to argue that they want to help their coal clients transition, but the reality is that almost none of these companies are transitioning,” said Katrin Ganswind, head of financial research at German environmental group Urgewald, which led the research. The study said banks from six countries - China, the United States, Japan, India, Britain and Canada - were responsible for 86% of global coal financing over the period. Direct loans amounted to $373 billion, with Japanese banks Mizuho Financial and Mitsubishi UFJ Financial - both members of the Net Zero Banking Alliance - identified as the two biggest lenders. Another $1.2 trillion was channelled to coal firms via underwriting. The top 10 underwriters were Chinese, led by the Industrial and Commercial Bank of China (ICBC) with $57 billion. It did not respond to a request for comment. Institutional investments in companies still developing coal assets amounted to $469 billion, led by BlackRock with $34 billion.

Indonesian coal prices stare at downtrend amid lack of China demand: sources

Indonesian coal prices are likely to decline in the near term as Chinese buyers stay on the sidelines amid a fall in the latter’s domestic coal prices. The development comes after China’s National Development and Reform Commission, or NDRC, said that the price of 5,500 kcal/kg NAR will be considered stable below Yuan 900/mt ($142.07/mt) at ports, Platts reported. The NDRC asked coal producers to step up production and urged sellers to sell at a stable price level. The price of Qinhuangdao 5,500 kcal/kg NAR was heard at Yuan 900/mt FOB on Feb. 15, a 20% correction from Feb. 11.

China — the world’s largest producer and importer of coal — is also one of the top importers from Indonesia, accounting for 10 million-12 million mt per month on an average. The country produced 4.07 billion mt of raw coal in 2021, 4.7% higher on the year and imported 320 million mt, up 6.6% on the year, the customs data showed.

Indonesia parliament calls for bigger domestic sales of coal

Indonesian lawmakers have called on the government to raise the domestic sales requirement for coal miners to 30per cent on the expectation that energy demand in Southeast Asia's biggest economy will rise in coming years. Coal companies are currently required to sell 25per cent of their output to the local market, with a $70-per-tonne cap for power generators and a $90 cap for cement and fertiliser industries.

The world's biggest thermal coal exporter in early January suspended shipments of the fuel amid low inventories at local power generators. Exports have since been allowed to resume, except from miners who have yet to comply with the domestic sales rule. Any increase in the so-called mandatory domestic obligation is likely to worry the global energy market, already reeling from the unexpected ban earlier this year. Sugeng Suparwoto, chairperson of the parliamentary committee overseeing the energy

sector, said the current 25per cent requirement will not be enough to meet local demand as it is expected to rise. As part of its efforts to reach net-zero carbon emissions by 2060, Indonesia has said it will not build new coal power plants. But several projects are already underway and these are expected to add around 14 gigawatts of new capacity in the coming years, according to the country's 20212030 power supply strategy.

Indonesian firms sign coal cooperation agreement

Three Indonesian state-owned companies — coal producer Bukit Asam, utility PLN and rail operator Kereta Api Indonesia (KAI) — have signed an interim agreement aimed at strengthening cooperation on the country's coal supply chain. The firms will collaborate to create a comprehensive study relating to cooperation schemes, business models, technical and operational partnerships, and other factors. The result of the study will serve as a guideline for delineating each company's role in the partnership. The interim deal is a follow-up to an initial agreement signed between the three companies in August last year. Bukit Asam will be responsible for supplying coal to PLN's power plants using KAI's railway system under the proposed partnership. The three companies are planning to have an operational system ready for deployment by 2025, with Bukit Asam supplying 20mn t/yr of coal to PLN under the terms of the proposal. The additional supply from the proposal will also serve as a security net in the event of issues in the delivery of coal from private-sector producers to power plants. Indonesia narrowly avoided two power crises in a span of a year in the first quarters of 2021 and 2022 because of a lack of coal deliveries to power plants. This resulted in a month-long export ban in January this year and institutional changes in both coal supply contracting and monitoring of coal deliveries.

Australia’s Thermal coal’s record price run may end up its own worst enemy

The price of benchmark Australian thermal coal rose last week to trade near record highs, providing a short-term boost to producers but increasing the risks of longer-term pain. The Newcastle index, as assessed by commodity price reporting agency Argus, climbed to $258.59 a tonne in the week to Feb. 11, up from $246.34 the prior week and close to the all-time high of $261.11 from the week to Jan. 28.

Australia, the world’s second-biggest shipper of thermal coal used for power generation behind Indonesia, is seeing strong demand for the polluting fuel from traditional customers in north Asia, such as Japan and South Korea. It’s worth noting that the bulk of coal bought by these countries is sold under short- and medium-term contracts, and not at the weekly spot price. This doesn’t mean Japanese and South Korean utilities aren’t paying high prices for their most of their supplies, but it is unlikely they are paying the current extremely high weekly index price. To put the current price in context, this time last year the Newcastle Index was at $87.43 a tonne, having recovered strongly from its pandemiclow in 2020 of $46.94. However, between 2012 and the middle of last year, the price had never exceeded $120 a tonne and had spent much of those years between $50 and $90.

NSW coal defies odds in challenging year

Australia - With robust international demand

in 2021, the New South Wales coal sector weathered the COVID pandemic and market changes and emerged with positive export volumes and jobs.

New data from Coal Services shows 164 million tonnes (Mt) of coal was exported from NSW in 2021, one per cent down on 2020 and almost 30 per cent higher than a decade ago.

India and Thailand were major drivers of demand, with the emerging trade partners almost doubling their imports of NSW coal. India increased from 8.9Mt in 2020 to 16Mt in 2021, and Thailand jumped from 3.7Mt in 2020 to 6.7Mt in 2021.

Korea increased its imports of NSW coal by 25 per cent to 26.8Mt in 2021, while the Philippines and Malaysia both remained steady. No NSW coal was exported to China.

Australian coal largely cleared at Chinese ports ahead of festival, but no sign of further imports

China’s coal supplies strengthened amid the potentially rising demand ahead of the Chinese New Year holidays, with ports ramping up efforts to expand imports or clearance of coal from countries like Australia while domestic suppliers increased production capacity to further ensure adequate inventories.

Some industry insiders confirmed with the Global Times that coal imports from Australia that was stagnant at ports have largely been cleared.

“In December, Australian coal stranded at ports was cleared up, and the remaining Australian coal – could be less than 1 million tons – would also be cleaned up in January,” a senior industry insider told the Global Times on condition of anonymity. 66.37 million tons less than in 2020, a drop of more than 85 percent year-on-year, amid the disruption by the soured relations between China and Australia, the insider said, noting that last year, Australian coal imports took only around 3 percent of the 320 million-ton total imports.

Australian delays affect Anglo American coking coal

South African mining firm Anglo American's delay in securing regulatory approval to restart its 5mn t/yr Grosvenor mine and a below expected performance at its 6.5mn t/ yr Moranbah mine are adding to wide price premiums for Australian hard coking coal.

Anglo American produced 14.9mn t of metallurgical coal in 2021, just shy of its 15mn t target, by increasing production at its lower grade Dawson mine, offsetting lower production at the high-grade Moranbah and the delayed restart of Grosvenor. This is contributing to the shortage of high-grade hard coking coal exports from Australia and the wide premiums paid compared with lower grade metallurgical coal such as pulverised coal injection (PCI) and semi-soft coking coal.

The firm's Moranbah mine, which was restarted in June after being closed for four months because of elevated gas level has also not raised output as expected with difficult geological conditions.

This has left Anglo American reliant on its lower grade Dawson mine to come close to its 15mn t guidance for 2021, with its 20mn-22mn guidance for 2022 reliant on the government approving the restart of Grosvenor quickly and on workforce absenteeism staying under control as Queensland experiences its first major wave of Covid-19 infections.

China's daily output of coal rebounds to over 12 mln tonnes

China's coal output returned to more than 12 million tonnes per day as of Feb. 20, the country's state planner said this week, a level equal to the average daily production of the fourth quarter of last year.

Daily coal output in January and early February was affected by the Chinese New Year holiday. The National Development and Reform Commission (NRDC) did not give a figure for January output.

Production and supply of coal in China's main production areas of Shanxi, Shaanxi and Inner Mongolia are expected to stabilise as the weather warms up, the NDRC said in its official Wechat account.

Authorities have ordered coal miners to run at maximum capacity to tame red-hot coal prices and prevent a recurrence of September's nationwide power crunch that disrupted industrial operations and added to factory gate inflation.

China coking coal futures jump on tight supply, demand hopes

Inventories of the metallurgical coal at 247 steel mills and 230 coking plants covered by Mysteel consultancy stood at 21 million tonnes last week, down 4% from a week earlier.

With demand at downstream users recovering, coking plants are more willing to buy products. Resumption of production at blast furnaces and the use-up of Australian coal could keep supply tight in China.

The most-active coking coal futures on the Dalian Commodity Exchange , for May delivery, ended up 5% to 2,647 yuan ($418.07) per tonne, the highest closing price since Oct. 27. Coke prices on the Dalian bourse jumped 3.6% to 3,389 yuan a tonne at close. They gained up to 3.8% earlier in the session. Benchmark iron ore futures rose for the first time in six sessions after regulators' price-containing measures last week. They were traded range-bound in morning session and soared 4.7% to 707 yuan a tonne when market close.

China Turns To Indonesia For Coal Following Fallout With Australia

China and Australia appear to have finally moved away from each other. The relationship turned frosty after China imposed an “unofficial ban” on Australian coal imports back in November 2019. At the time, many speculated that China would suffer more. But steel prices have held steadier as well.

The dispute started sometime in 2019 after China delayed Australian coal shipments. Other factors including Covid made things worse. China hardened its stance after the Australian government called for an independent inquiry into the origins of COVID-19. In what is being interpreted as “retaliation”, China blocked imports of Australian products like copper and coal. Last year, China imported 54.7 million tons of coking coal, down by 24.6% from 2020.

The lifting of export controls of coal from Indonesia may come as good news for China. China remains one of the largest importers of Indonesian coal, importing as much as 123 million tons of it last year. China does not need to go back to Australia. When Indonesia implemented an export ban on coal and subsequently partially lifted the ban that provided more options for China.

South Africa has pledged to switch from coal to clean energy.

Gwede Mantashe stated at a coal colloquium in Pretoria that while South Africa is committed to a transition to cleaner energy, coal would continue to be important for the country's economic growth and job creation for some time.

According to media reports, Mantashe said coal accounted for around 70% of primary energy consumption, 75% of electricity generation, and 30% of petroleum liquid fuels in the country's energy mix.

"Coal's role to energy security, considerable contribution to the gross domestic product, huge workforce, and other relevant economic concerns must all be addressed in the transition. These national interests cannot be overlooked in our climate change strategy.

They must be incorporated into our strategies to transition from high to low carbon emissions "Mantashe remarked.

Ukraine imported almost 1.3M tonnes of coal since Nov 2021

Ukraine has imported almost 1.3 million tonnes of coal since November 2021, the Prime Minister said.

four more vessels with about 334 thousand tonnes of coal are expected to arrive by the end of this month and six vessels with 391 thousand tonnes in March. Two ships with 300,000 tonnes of coal are being unloaded at the port.

The Prime Minister said that as of February 16, 822,000 tonnes of coal were accumulated in thermal generation warehouses. At the same time, the consumption of this type of fuel in February 2022 is 18% less than in February 2021.

According to Shmyhal, available energy reserves will be enough to complete the heating season. Moreover, there have been no so-called "rotating outages" and there are no plans to use them.

Russian gas crisis stokes Europe’s appetite for Russian coal

Russian coal merchants are proving to be the winners as European buyers, nervous a feared Russian invasion of Ukraine could lead to disrupted gas supplies, stock up on the dirtiest fossil fuel.

Despite Europe’s ambitions to reduce carbon emissions to net zero by the middle of the century, which means weaning itself off all fossil fuels, but especially coal, the continent has been switching to coal from gas since the middle of last year.

Even before the current risk invasion and possible Western sanctions on Russia could choke off gas from Europe’s biggest gas supplier, fuel buyers responded to record high gas prices.

The European Union’s coal imports rose by 55.8% in January versus a year ago, to 10.8 million tonnes – of which Russia supplied 43.2% – analysis from shipbroker Braemar ACM, based on ship tracking data, found. EU coal imports also rose in December 2021 by 35.1% year-on-year to 9.3 million tonnes.

For 2021 as a whole, imports of Russian thermal coal into Europe, of which the majority is shipped to Germany, Belgium and the Netherlands, rose to 31.1 million tonnes, a year-on-year increase of 16.2%, Braemar analysis showed.

US coal generation share falls to 18-month low in November: EIA

Power sector coal stockpiles were 32.3% lower at the end of November than the year-ago month and the lowest for the corresponding month in

21 years, Energy Information Administration data showed.

Since hitting 20-year low 80.42 million st in September, coal inventories grew to 92.15 million st at the end of November, up 8.6% from October and a 7.31 million st build.

Bituminous coal stocks were 33.2% lower than the five-year average 55.96 million st after November and 31.9% lower than the year-ago month. Compared with October, bituminous stocks were 8.2% higher at 37.36 million st, a four-month high.

Bituminous supply at coal plants averaged 100 days of cover at the end of November, a seven-month high and 9.9% higher than October. Compared with the year-ago month, bituminous days of burn were 28.6% lower. Bituminous days of burn were nearly flat to the five-year average 99 days.

US power generation from coal totaled 57.4 TWh in November, down 8.3% on the month and 6.2% on the year. Coal represented 18.2% of the stack in November, an 18-month low. In the year-ago month, coal’s share was 20.3%. Power generation from coal was 29.6% lower than the five-year average in November.

US National Coal Council reestablished as National Advisory Committee on Coal

US - The National Coal Council will be reestablished under a new name and with a revised mandate, the Department of Energy said.

The council’s charter lapsed more than two months ago, “in light of DOE’s commitment to fully evaluate the need to expand the scope of advisory work of the committee,” read a notice published in the Federal Register. While the council will continue to advise the Secretary of Energy on “general policy matters relating to coal issues,” according to recent notice, its charter “has been modernized to reflect matters currently faced by the coal industry, workers, and communities.”

It will now be called the National Advisory Committee on Coal.

The National Coal Council had previously been criticized by environmental groups for allegedly favoring industry. Many such groups, including the Powder River Basin Resource Council, praised the DOE’s decision to update the charter instead of renewing it..

Increased PRB coal production points to ‘strong 2022’

Coal production in the Powder River Basin saw growth in 2021 after a significant pandemicrelated setback marred the extraction industry the year before.

Amid an overall downturn in the demand for thermal coal, 2022 appears poised to be another productive year for basin coal mines.

The 12 Campbell County mines produced about 230 million tons of coal last year, about a 10% increase from the 2020 yield of nearly 207 million tons, according to coal production data from the Mine Safety and Health Administration.

The decreased 2020 production came amid the early stages of the COVID-19 pandemic and resulted in about a 22% drop from the almost 267 million tons of PRB coal mined in 2019.

The “unexpected uptick” in demand for coal last year came from a confluence of factors, particularly in the third and fourth quarters of the year, that involved projections of a colder winter and increased natural gas prices throughout the country, said Travis Deti, executive director of the Wyoming Mining Association.

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