Australia is the world's fourth-largest coal producer as well as one if its largest net exporters – accounting for close to 24% of total world steam coal exports in 2015. Australia mainly exports non-coking coal to China, India, Japan, South Korea and Taiwan. IHS Markit predicts the continent will continue to play a key role supplying Asia's top demand centers, with steam coal exports reaching 232MMT by 2020 and steadily increasing through 2040.
Australia presents massive export potential. In 2014, Australia's combined bituminous, subbituminous and lignite reserves amounted to 76BMT. Coal quality differs by geography, with the premium hard-coking coals located in the northeast Bowen Basin and Queensland areas, and low-volatility hard-coking coals in the southeastern New South Wales and Southern Basin regions. The country remains the only supplier with significant volumes of high-calorific value coals that can be brought to market, which should provide a competitive advantage as Asian countries have begun to shift toward using higher CV coal.
Despite its abundant reserves, Australia's coal industry faces several hurdles. Future limits to export potential could include rail and port infrastructure, which currently satisfies market demand but could become costly as mining companies move inland to expand reserves. Similarly, while the government has taken recent steps to repeal several taxes involving mineral resource rents and carbon emissions, future legislation appears likely. Environmental opposition to the Newcastle and Hunter Valley mines and to port access through the Great Barrier Reef poses yet another limitation. Indeed, many proposed developments have been shelved as they require prices well above current levels to promise a reasonable rate of investment return.
You can find the latest Australian coal market data, news and insight through two IHS Markit weekly reports – The Australian Coal Report and Coalfax. Available through our APAC and African Coal Market News & Analysis service, the reports provide:
- Key price indices – NEX (Newcastle Thermal Coal Export) Index
- Australian import and export statistics for metallurgical, steam and petcoke
- Australian production and consumption data for metallurgical, steam and petcoke
- Analysis of major producers, producing regions, transportation costs, infrastructure, policy
- Analysis of the latest Australian coal market news: briefs, tenders, stocks, contracts
Visit APAC and African Coal Market News and Analysis Service to view the latest reports.