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Aurizon Holdings is confident of the long-term demand for Australian coal from international markets despite a 10 per cent drop in exports during the second half of last year.

Australia exported 183 million tonnes of coal during the period, comprising 86 million tonnes of metallurgical coal and 97 million tonnes of thermal coal, down 6 and 12 per cent, respectively, on the prior year.

Aurizon also experienced interruptions to its export contracts with Australian coal miners due to COVID-19-related disruptions to steelmaking, particularly in China.

The company was unable to retain its 3.2 million tonne a year export contract with Stanwell Corporation, which ended in December 2020, and is also saying goodbye to a 5.2 million tonne per annum contact for New Acland this December.

This caused Aurizon’s coal revenue to drop by 8 per cent, or $73.2 million, to $644.5 million.

Aurizon managing director and chief executive Andrew Harding reiterated that the company remained confident for long-term demand for Australia’s high-quality coal.

“Steel production has now resumed to pre-COVID levels, though the challenging trade environment with China will continue to impact near-term export volume,” Harding said.

“We expect continued coal growth export of 1 per cent per year over the next decade, supported by steel-intensive growth in India and a relatively young fleet of coal-generation power plants in Asia.”

India was Australia’s largest metallurgical coal export market during the second half of last year, with an export volume of 27 million tonnes, followed by Japan at 16 million tonnes and China at 12 million tonnes.

Japan topped Australia’s thermal coal export market with an export volume of 37 million tonnes during the same period, with South Korea coming in second at 16 million tonnes and Taiwan at 10 million tonnes.

Aurizon’s iron ore transport increased by 2.4 million tonnes, thanks to commencing new contracts with Rio Tinto and Mineral Resources during 2020.