Coal news and updates

Coal exports overtake iron ore as energy crisis ignites prices

However, the longer-term outlook for Australia’s coal industry remains deeply uncertain. Power generation from renewable energy continues to rise, large resources companies are increasingly divesting or announcing closures of their coal assets, and financial institutions are pledging not to make new investments in the sector, citing concerns about its future demand and global warming.

The benchmark price of high-quality thermal coal traded at the Port of Newcastle is expected to fall from $US360 a tonne to $US200 by 2024, but is not expected to drift back to pre-coronavirus levels for “any forseeable timeframe”, reducing its competitiveness.

“Thermal coal remains subject to challenges with finance, insurance and long-term global demand, all of which have made supply side responses slow and difficult to manage,” the federal trade report says. “These factors will likely become more forceful over time, putting the sector into a permanent higher-price phase.”

Earnings from Australia’s other major energy commodity export, liquefied natural gas (LNG), have been revised up by $1 billion this financial year. It is now expected to account for $90 billion in export earnings, up from $71 billion a year earlier.

Earnings from iron ore, the key steel-making raw material that usually ranks as the nation’s most valuable commodity, were revised down for the financial year, and are set to slip from $130 billion to $113 billion in the past financial year. Outbreaks of COVID-19 and a property market slowdown in China, by far the biggest customer of Australian iron ore, have continued to weaken demand for steel.

Meanwhile, demand for Australian supplies of raw materials that will be needed in increasingly vast quantities to build clean energy technologies including copper, nickel and lithium, are set to reach almost $33 billion in 2022-23 compared with $22 billion in 2021-22.