PERTH (miningweekly.com) – Diversified major BHP Billiton on Wednesday reported that despite the recent decline in coal prices, the miner remained positive on the commodity’s outlook.

Speaking in Brisbane, BHP president of the global coal business Dean Dalla Valle said over the next few decades, BHP expected global demand growth for energy coal and metallurgical coal.

“China is the largest producer of metallurgical coal but it is still expected to remain a significant importer. However, most future demand growth is likely to come from outside China, with the likes of India, a country not overly endowed with metallurgical coal, anticipated to be the most significant source of new demand,” Dalla Valle said.

He noted that demand for energy coal was also expected to grow.

Dalla Valle pointed to information from the International Energy Agency‘s modelling, which showed that energy coal demand was expected to continue to grow at a compound annual growth rate of 2.4% through to 2035.

“That translates to growth from 5.4-billion tonnes produced today to 6.3-billion tonnes over the next 20 years.”

He added that while growth rates for energy coal would likely be lower than other energy sources, including gas and renewables, energy coal would still be the source of around 35% of the world’s electricity needs.

“Coal is expected to remain the centrepiece of Asia’s energy portfolio into the foreseeable future, where coal is the cheapest and most readily available source of energy.”

Dalla Valle noted that while the price of coal had declined in recent times, with metallurgical coal prices halving from $300/t in 2009 to $150/t in 2014, coal had not been the only commodity affected by the price decline.

He added that in response to the lowering prices, which had been driven by significant supply growth, many coal miners had moved to rapidly decrease cost and maximise production in order to stay profitable.

“Over the past 18 months we have focused on our cost base throughout our operations and there is still more we need to do as we continue to look for ways to improve the productivity and competitiveness of our mines,” Dalla Valle said.

BHP currently operated 20 metallurgical and energy coal operations across five countries, and produced about 154-million tonnes of coal during 2013.

In the 2013 financial year, Queensland accounted for around 27% of BHP’s total coal production and 79% of its metallurgical coal production. Combined with the Illawarra, that accounted for approximately 25% of the world’s seaborne metallurgical coal.