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

Friday, April 9th, 2021

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.

https://www.miningweekly.com/article/coal-output-but-poised-for-growth-this-year-after-2-fall-in-2020-2021-04-08/rep_id:3650
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