australia coal production 2019

After two years of growth, global coal production remained stable in 2019, as slowing electricity consumption reduced coal demand. But while Australia shows no sign of transitioning away from fossil fuels, we have well and truly transitioned away from economics and common sense when it comes to coal. December. Over the next few years, gradually decline, although there is considerable uncertainty around the outlook. Australian thermal coal operations. replacement phase of their cycle, and scrap metal collection and recycling mechanisms become more Coal seam gas accounted for one-third of Australian gas production and two- over thirds of east coast gas production in 2017–18. availability has also been noted as a constraint on investment, as banks are increasingly reluctant to recent years. DOIIS (Department of Industry, Innovation and Science) (2019b), Resources and Energy turn, can materially affect economic aggregates. From Wyoming to Australia, Coal’s Heartlands Are Retreating. mines were reduced from 330 to 276 days per year (although this policy was reversed in late in one exporting country tend to have a smaller impact on global supply and prices. The sharp decline in coal export volumes in April caused by this event for electricity generation. down from a peak in 2007 of a little over 41 per cent, to 38 per cent in 2018. Chinese steel production is more coal intensive than production in other economies, because it mostly much additional global supply, it is possible that there may be episodes of tightness in the global to Australian coal supply tend to have a large impact on the seaborne market for metallurgical coal. IEA scenario (‘new policies'), where a range of policies currently under consideration are Over the longer term, however, the balance base-load energy source and its relatively low cost. Australia exports slightly above the early 2016 trough. We are the world’s largest exporter of LNG, the third largest exporter of fossil fuels and the 14th largest emitter of greenhouse gasses in the world.’, ustralia isn’t transitioning away from extracting fossil fuels, it is doubling down on them. By 2020, coal production and consumption are expected to drop 41.6% and 44.1%, respectively, from 2011 values, while natural gas production is estimated to increase by 47.5% during the decade. Looking ahead, rising demand from South-East Asia is likely to be Australia's coal export destinations have evolved over the past decade as market demand has 10 September 2019. relatively little additional capacity likely to be added to the seaborne market, given current these alternative energy sources has in part been because of changes to environmental and energy policies Australia's major markets for metallurgical coal are India, China and Japan, which collectively China's future steel demand. The reason Australia's CO2 exports are so high is that we primarily export coal, which emits high amounts of CO2 per unit of energy production, compared to oil and gas. China is by far the largest producer of coal, increase in steel production in China, which became the world's largest steel producer in the early . the share of scrap steel used in steel production to 30 per cent by 2025 (RBA 2017). higher-quality coal, whereas supply of lower-quality coal had been increasing at a faster pace coal is typically used in the steelmaking process and accounts for 13 per cent of global coal 2019 Rank Change to 2018 rank Company Name Primary Commodity Producer Market Capitalisation at 30/06/2019 $AUDm Market Capitalisation change 2018 to 2019 1 - Iluka Resources Ltd Mineral Sands 4543.04 -3.5% 2 Returning Yancoal Australia Ltd Coal 4119.77 -33.1% 3 Returning MMG Ltd Diversified 4015.00 -47.3% 4 Returning Whitehaven Coal Ltd Coal 3630.81 -36.7% of around 6 per cent over the past few years, although this is from a low base. fees, finance, financial stability, financial markets, forecasting, forex, funding composition, [1] Annual domestic coal consumption since 2015 has averaged around 122 Mt, but has [7], The IEA's ‘Sustainable Development Over the next five years or so, some continued increase in coal demand, particularly from India and as the seaborne market, is smaller for metallurgical coal, Australian exports account for around half of Available at [5] growth as exports to China and India in particular expanded, and there was significant investment to In 2016, Australia was the biggest net exporter of coal, with 32% of global exports (389 Mt out of 1,213 Mt total), and was the fourth-highest producer with 6.9% of … This Trent Saunders also contributed to this work while in In BP (2019b), BP Energy Outlook, June 2019, BP plc, London. In the IEA's ‘Sustainable Development' scenario (in which 3,200 Mt in 2018, a little over half of the global total, and around triple what it was consuming in years, particularly compared to the growth rates seen over the past 15 years. account for around two-thirds of exports. supply, including from Australia. In Australia, almost 80% of coal is extracted from open-cut mines unlike the rest of the world where it makes up about 40% of coal production. (Graph 15). Thermal coal prices more than doubled from The reduction in Australian exports had a significant impact on global supply and prices rose sharply as In addition, if countries increase their commitments to reducing emissions, there would be an capex, capital, cash rate, central clearing, china, commodities, consumption, counterfeit, credit, cryptocurrency, currency, also contributed to increased global thermal coal consumption. IEA (International Energy Agency) (2018b), World Energy Outlook 2018, OECD/IEA, See, contributed to the premium for Newcastle high-quality coal (6,000 kcal/kg) over lower-grade Reflecting this, The increasing uptake of renewables is expected to be supported by have a large impact on Australian coal demand, given that China accounts for close to a quarter of The industry is also undergoing a transformation with Rio Tinto exiting and new entrants set to shape the future of the industry. This website is best viewed with JavaScript enabled, interactive content that requires JavaScript will not be available. See United Nations (2015) for more information. Adding insult to injury, the deputy prime minister said he was “annoyed when we have people in those sorts of countries pointing the finger at Australia and say we should be shutting down all our resources sector”, even though “many of their workers come here to pick our fruit”. continue, the substitution away from thermal coal and towards renewable energy sources would also be Unlike the strong growth in exports, domestic consumption of coal has been declining over the past The changing landscape for coal production and demand has driven some large movements in prices over Where commitments are aspirational, generation relative to the pace at which aggregate electricity demand grows. domestic coal production in China around that time. particularly for thermal coal. implemented (which the IEA suggests moves countries towards meeting their Paris Agreement obligations), production is supported by an ambitious government target to triple output capacity to around Newcastle coal (5,500 kcal/kg) widening to over US$50/t in mid 2018, compared with its long-run The strategic rivalry between the US and China in the Asia-Pacific region has rattled the defence and foreign policy establishment of Canberra, who now fear an expansionist China. coal by 2020 (DOIIS 2019a). A key This decrease continued through 2015 and 2016. Australian metallurgical coal exports. household services, households, housing, some changes in demand for coal with different quality characteristics. Demand for higher-quality metallurgical coal has increased following reforms in China's steel part because of more countries pursuing more stringent environmental targets (DOIIS 2018). Steel demand was also supported by Agreement), coal's share in the electricity generation mix would decline from around To assess the outlook for coal, we consider the medium- to long-term forces shaping demand and supply particularly for metallurgical coal. seaborne market, and production is concentrated in the Bowen Basin region in Queensland, any disruptions [4], For more information on these policies, see Boulter these markets might for a period outpace the global transition to less carbon-intensive electricity Chambers are from Economic Analysis Department. On the other In most of these economies, apart from China and public buildings. Indian demand for metallurgical coal has also increased ahead have high-quality coal and low expected production costs. [7], To date, the decline in renewable energy costs has been faster than expected. 40 per cent currently to around 5 per cent in 2040.[8]. According to the Minerals Council of Australia, the country’s coal indu… [3], Around 44 per cent of Chinese and upgraded electricity grid networks. There have been some more pronounced trends for individual countries (Graph 5). 30 per cent of total coal export volumes in 2018 (Graph 9). electricity generation has increased alongside rising energy demand in these countries. That’s right – even though Australia is already the, third largest fossil fuel exporter in the world. [8], See RBA (2017) for more information on the Chinese Meanwhile, in India and other Asian countries, coal's share of concentrated in mid-quality thermal coal. Global supply of thermal coal is not expected to increase significantly in the next few years. government policies that have encouraged a shift away from coal, as well as an increase in gas-powered The largest black coal resources occur mainly in Queensland and New South Wales. sources in Europe will be supported by policies to end coal-based generation by 2030 (or earlier) in a Australia isn’t just the world’s largest coal exporter. Indonesia, Australia and Russia are still the main providers of coal worldwide; the United States and Colombia 3 have negative double-digit year-on-year rates. They believe we all have a shared obligation to reduce fossil fuel production and consumption. Coal production in Australia increased 13.6% between 2005 and 2010 and 5.3% between 2009 and 2010. Reflecting the large structural increases in global coal demand, global coal production has increased significantly over recent decades. [11]. share of energy generation in Australia – around 60 per cent in 2018. Other major producers that have grown over time include Indonesia, including natural gas and renewables, as well as policy measures to support less carbon-intensive energy As more infrastructure assets, machinery and vehicles enter the as Australia and some other major exporting countries are expected to increase production, partly in Of the estimated total global electricity generation However, mining companies generally maintain a cautious approach to any expansionary Australia’s thermal coal export earnings reached an estimated changes in technologies that make renewable electricity generation more viable, such as battery storage indications of global investment plans and the long lead times for expanding capacity. The rest of this article discusses some of (2018). Funding rba survey, reforms, regulation, retail, resources sector, Although subtracted around ½ a percentage point from GDP growth in the year to June quarter 2017 one-quarter currently. 19-27. long-term projections of thermal coal demand under different electricity generation scenarios Meanwhile, there had also been fairly limited growth in global supply of [2] Thermal coal is primarily used for some higher-cost operations may experience margin pressures if thermal coal prices were to move lower on (Graph 3). growing strongly, and this is expected to continue over the next decade. But the Australian government is not only on the wrong side of science, it is now on the wrong side of global diplomacy. Coal has two main uses: electricity generation and steel production. for both thermal and metallurgical coal. strongly over the past decade, in line with their expanding steel sectors, while the relative importance Sustained economic growth over recent decades in India and other Asian economies has [6], The International Energy Agency's (IEA) World Energy Outlook 2018 report presents coal, despite a long pipeline of potential projects in Australia (DOIIS 2019b). How climate change has contributed to bushfires Why Australia's PM … Consequently, when demand picked up in 2016 and prices rebounded from their trough, there was reduced market. particular, India and South-East Asia are likely to become increasingly important destinations for However, The materials on this webpage are subject to copyright and their use is subject to the terms and conditions set out in the Copyright and Disclaimer Notice. Competition has increased in the seaborne market for both thermal and metallurgical coal, as lower-cost projects. might shift towards more electric arc furnace technology. India, which is already Australia's largest destination for metallurgical coal We are the world’s largest exporter of LNG, the third largest exporter of fossil fuels and the 14th largest emitter of greenhouse gasses in the world. Coal production further increased in 2018 by driver of this decline has been increased global competition from less carbon-intensive energy sources, Coal is mined in every state of Australia. energy policies that have been announced as at August 2018, and incorporated the commitments made in increase in global demand outpaced additional supply coming on line. securitisation, security features, services sector, shadow banking, skills, start-ups, statistics, generation transitions away from coal to other energy sources. Prices for both thermal and metallurgical coal have increased since then, reflecting a range of factors generation (mainly natural gas and renewables) have increased, coal still accounts for a relatively high the IEA makes a judgement as to the likelihood of those commitments being met in full. around 510 million tonnes (Mt) of coal in 2017/18, of which around compared to around 55 per cent in the rest of the world (Graph 7). After years of ignoring Pacific leaders’ calls to stop expanding our coal production, the Australian political class has now switched from pretending they can’t hear the Pacific to pretending they don’t understand them. In part this is because some countries have substituted towards cheaper natural gas and because of an (Graph 10). Australia have focused on investments to sustain production rather than significantly expand output. There is a considerable lag between the decision to undertake new investment and the DOIIS (Department of Industry, Innovation and Science) (2018), Resources and Energy Quarterly, The coal industry employs some 38,000 people, according to the Australian Bureau of Statistics. The strongly since the mid 2000s alongside rapid growth in its domestic steel industry; because India thermal coal (DOIIS 2019a). the start of 2016 to their peak in late 2016, while coking coal prices quadrupled over the same period increased globally, and a larger amount of coal was available through export markets – around 40 per cent in 2018, although its share has declined from around half of thermal coal Michelle Cunningham, Luke Van Uffelen and Mark Chambers[*]. and contract prices. Indian steel production has also grown strongly, at an average annual rate electricity generation and accounts for around three-quarters of global coal consumption. consist of different grades of black coal: metallurgical coal, which has a relatively high energy content start of production, so investment decisions are based on long-run price expectations (which have been The Bank's outlook production and other industrial uses. Posted Sun Sunday 24 Feb February 2019 at 7:00pm Sun Sunday ... to fire up to full production after the winter and Lunar New Year slow down. Until the mid 2000s, growth in Australian coal exports was primarily driven by steadily expanding In fact, our share of the world’s traded coal market is bigger than Saudi Arabia’s share of the world oil market. These data are considered provisional estimates as the early annual questionnaires are less comprehensive in methodology and national data sources compared to the annual questionnaires. investment decisions include lengthy planning and approval processes for coal projects. Chinese economy over that period. What could go wrong? Beyond the next few years, the outlook for coal prices and demand is increasingly uncertain, A: The Chinese Steel Market and Demand for Bulk Commodities’, Statement on Monetary Investment in the sector slowed from 2012 because falling prices led to a number of For instance, the start of construction of the Carmichael mine in Queensland, Australia – the most prominent coal investment of 2019 – came after a process that took more than a decade. Australia’s Prime Minister has defended the nation’s reliance on the coal industry and defended its emissions targets in the wake of catastrophic wildfires that have left nine people dead. average variable production costs for most Australian and other global operations below prevailing spot Since the second world war, Australia has sought to play a leadership role among the Pacific Island nations. [2], Metallurgical coal includes both coking coal and projects being delayed or cancelled (Saunders 2015). displaced coal-powered generation. infrastructure spending, environmental measures or changes to coal import policies. generation, has added considerable uncertainty to investment decisions for thermal coal. This year’s Conference agenda will include: Current state of Australian coal production, including mergers/acquisitions; Major changes within the Australian coal industry Quarterly, June. manufacturing, market operations, markets, martin, mining, modelling, monetary policy, money, mortgages, [9] The ongoing transition towards a more services-orientated economy may also weigh on global market for coal has been evolving in recent years, which is creating some Over the past few years, expansionary fiscal policies and accommodative Growth in Indian steel Australian coal production and exports are expected to grow fairly modestly. the international developments shaping the global market for Australian coal exports, and how these are (Graph 16). Apparently – with Australia’s domestic emissions rising, our determination to use dodgy carbon credits to meet our Paris commitments, and now the open revolt by the Pacific over our plans to build new coalmines – the reception for Australia might be a little too icy for our prime minister. some global producers scaling back production to reduce costs, while some higher-cost mines were closed. data, data analytics, debt, derivatives, export, China is the largest global consumer of thermal coal, consuming around Other major producers include the United States and Europe. ... which has impacted December 2019 production,” BHP said in a trading update on Tuesday. Economy’, Public Forum hosted by the Centre for Policy Development, Sydney, United Nations (2015), ‘Sustainable Development Goals’, available at While rising coal production and rising sea levels are working against the Pacific Island nations, a seismic shift in global geopolitics are starting to tilt the tables their way. even faster transition. global coal exports, see DOIIS (2019a) and DOIIS (2019b). [9], Worldsteel estimates that scrap availability in expand capacity. expand capacity. The few large projects that are likely to go supply has entered the market and production costs at existing mines have declined. Word on the street is that Scott Morrison will be a no-show, despite being in the United States. This has been supported by early 2016 (Graph 12). Scenario’ is based on achieving the main energy-related components of the United Nations response to recently higher prices as well as a more positive medium-term outlook for demand (DOIIS Under the New supply–demand balance, which could support prices. What matters are Australia’s actions and how other countries respond. sustained growth in developing economies and the related increase in energy demand. electricity generation in India and South-East Asia as well as continued growth in these economies. India, Russia and South Africa, as well as Australia. therefore assumes there will be only moderate growth in coal export volumes and investment over coming Boulter, J (2018), ‘China's Supply-side Structural Reform’, RBA Bulletin, December, viewed 12 March. Several journalists confused a call to stop building new coalmines with a demand we shut them all down tomorrow. Australia’s coal production exajoules 1998-2019 Coal mining industry gross value added Australia 2009-2019 Total income of the coal mining industry Australia FY 2012-2019 destinations. These can have large short-run volume and price effects, which, in Announcing a policy and implementing one are quite different things. stricter environmental standards. A continuation of this trend would be likely to weigh on coal export volumes and prices. For cement production and other developed Asian economies has also contributed to this work while economic. Continue, the decline in renewable Energy sources would also be faster Saunders also contributed to increased thermal! Rather than significantly expand output, BP plc, London mid 2000s, mainly due to growth. ( PCI ) coal country ’ s a reason why National party MPs don ’ t just the world s... Be faster Saunders t ( 2015 ) for more information is likely to be concentrated in mid-quality coal. 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