https://www.miningweekly.com

Coal output poised for growth this year after 2% fall in 2020

8th April 2021

By: Marleny Arnoldi

Deputy Editor Online

     

Font size: - +

Research agency GlobalData expects global coal output to have declined by 2% in 2020 owing to Covid-19-related lockdowns and restrictions.

Notably, significant reductions have been observed in the US at 23.6%, Indonesia at 13.1%, Russia at 8.1% and Australia at 5.5%.

GlobalData says these were only partially offset by increases in China of 4% and India of 0.7%.

Additionally, there was an estimated 3.5% reduction in global thermal coal demand, and an estimated 5.9% decrease In metallurgical coal demand In 2020.

However, global coal production is set to recover by 3.5% to eight-billion tonnes this year.

With the US coal industry already challenged by high production costs and low natural gas prices, the country’s output was severely impacted by the Covid-19 pandemic, with key companies halting their operations as part of preventive measures.

Additionally, a decline in domestic demand as well as export market demand affected output from Indonesia and Russia.

GlobalData anticipates global coal production to grow at a compound annual growth rate (CAGR) of 2.3% between 2021 and 2025 to reach 8.8-billion tonnes in 2025.

While thermal coal production is expected to have a relatively marginal 2% CAGR to reach 7.5-billion tonnes, metallurgical coal is forecast to register stronger growth of 4.2% a year, to reach 1.2-billion tonnes in 2025.

GlobalData associate project manager Vinneth Bajaj believes India will be the largest contributor to this growth. Its production is expected to increase from 777-million tonnes in 2020 to 1.2-billion tonnes in 2025.

This will be followed by China, Indonesia, Australia and South Africa, whose combined production is expected to increase from an estimated five-billion tonnes in 2021 to 5.43-billion tonnes in 2025.

Other countries that are expected to record a strong rebound this year are the US and Russia. In contrast, production from Australia is expected to decline by around 4% in 2021, mainly because of concerns over the future of China-Australia trade.

Looking ahead, the research agency expects 2.5% growth in China in 2021, supported by the start of projects including Dahaize and Xinjiang Zhundongs.

In addition, India, which, after flagging coal as an essential commodity, reported 0.7% growth in 2020, is expected to deliver 9% growth in output to reach 827-million tonnes this year.

GlobalData points out that the commercial auction of coal mines in India is expected to be a key production booster for the world’s second-largest coal producer; in early 2020, the Indian government allowed ten coal projects to start operations.

 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION