Australia is one of the world's largest coal producers as well as one of the largest net exporters. The Australia coal market is expected to grow at a CAGR of more than 1.4% during 2020 - 2025. Factors such as an increase in demand for power generation and the presence of large coal reserves are driving the growth of the coal market in Australia. However, shift to alternative sources of energy such as natural gas and renewables for power generation, and environmental impacts of coal at coal mines are likely to restrain the growth of the coal market in Australia over the forecast period.
- The growing demand for bituminous coal reserves that have a major share in the Australia coal market is expected to drive the market studied.
- Adopting new technologies such as geospatial data, 3D mapping, and hyperspectral core imaging in the coal mining operations are expected to provide an opportunity for the Australia coal market in the near future.
- Increasing demand from the power generation industry is expected to drive the Australia coal market over the forecast period.
Key Market Trends
Demand for Bituminous Coal to Drive the Market
- Coal production in Australia reached 503 million tonnes in 2019, positioning it at number six in the world. The country exported about 27.4% of its coal in 2019, coming in second after Indonesia, and also it exported 393 million tonnes.
- Australian terminology for bituminous coal is black coal. Bituminous coals are largely used for power generation and to produce coke, which is mainly used in the production of iron and steel. Bituminous coal is also used also in other metallurgical applications, cement manufacturing, alumina refineries, paper manufacture, and a range of industrial applications.
- In 2018, the production of bituminous coal for Australia was 253,420 thousand short tons. Production of bituminous coal of Australia increased from 113,450 thousand short tons in 1999 to 253,420 thousand short tons in 2018 growing at an average annual rate of 4.48%.
- Black coal resources occur in New South Wales, Queensland, South Australia, Tasmania, and Western Australia but New South Wales and Queensland have the largest share of Australia's total identified resources. These two states are also the largest coal producers.
- Hence, with abundant bituminous coal reserves, and highest production and exports, demand for bituminous coal is likely to drive the Australia coal market over the forecast period.
Demand from Power Generation Industry to Drive the Market
- Growth in power generation is expected to drive the coal market in Australia. This is mainly due to the increased demand for electricity, and increased use of coal in power generation in the country.
- As of 2019, the electricity production rose to 265.1 TWh from 247.6 TWh in 2014 with a growth rate of 1.3%. Thus, the rise in demand for power generation is expected to boost the market for coal in the country since coal is the primary energy source.
- Coal remains the major energy source for electricity production in the country, and coal power generation accounted for about 56% of the total electricity produced in the country in 2019. Australia’s electricity generation from coal was 149.5 TWh in 2019.
- Australia has 149079 million tonnes of coal in its reserves. Among which the black coal, which is mainly used for coal power generation accounts for the largest share in the Australian coal market. Hence, coal power generation is expected to drive the market during the forecast period.
The Australia coal market is fragmented. Some of the major players in the market include Bloomfield Collieries Pty Ltd, BHP Group Ltd, Centennial Coal Company Ltd, HardRock Coal Mining Pty Ltd, and Yancoal Australia Ltd.
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