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Coal resources, production and use in established markets
5 Coal resources, production and use in established markets A. FIKKERS, Xstrata Coal Sales Pte. Limited, Singapore
DOI: 10.1533/9781782421177.2.105 Abstract: This chapter covers the coal industry in countries in which the coal market has long been established. The countries in question are Australia, Canada, Germany, Hungary, Poland, South Africa, Turkey, the UK, Ukraine and the USA. Coal supply aspects are discussed first, followed by aspects of coal demand for each territory. Key words: established coal markets, coal production, coal use, coal export, Australia, Canada, Germany, Hungary, Poland, Turkey, the UK, Ukraine, the USA.
5.1
Introduction
Coal, of which world production was 7.2 billion tonnes in 2010, is a major source of primary energy globally, ranking second after only oil. It plays a key role in power generation, in particular enabling power generation at an affordable cost. In general over the last decade the use of coal has increased by 28%, more strongly than any other primary energy source; however, trends vary from region to region. Broadly speaking coal consumption has been stable in OECD countries over the last decade; however, in the EU, there was a 14% drop. The demand for coal in developing countries has increased dramatically over the same period. Countries demonstrating particular increases in demand for coal have been China and India (www.euracoal.be). Table 5.1 shows the top ten coal consumers in 2010. Table 5.2 shows proven coal reserves at the end of 2009. Table 5.3 shows the world’s top ten coal producers as of 2010. Some countries feature in both Tables 5.1 and 5.3, however not all; so it is evident that some coal is traded internationally. In 2010, only 14.8% of the coal produced globally was traded, indicating that coal is mainly used near the site of mining. In general, it can be cost effective to export coal from mines located near sea ports with low production costs to customers overseas. Imported coal can play a major role in increasing a country’s 105 © Woodhead Publishing Limited, 2013
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The coal handbook Table 5.1 Top ten coal consumers in 2010 PR China USA India Russia Japan
2516 Mtce 733 Mtce 434 Mtce 177 Mtce 165 Mtce
South Africa Germany Korea Poland Chinese Taipei
141 Mtce 105 Mtce 103 Mtce 87 Mtce 60 Mtce
Source: World Coal Association. Table 5.2 Proven reserves at end of 2009 Country
Billion Tonnes
Russia Australia Ukraine South Africa Brazil USA PR China India Kazakhstan Poland
157 76.2 33.9 30.4 7.1 238.3 114.5 58.6 31.3 7.5
Source: World Coal Association. Table 5.3 Top ten hard coal producers as at 2010 PR China USA India Australia South Africa
3162 Mt 932 Mt 538 Mt 353 Mt 255 Mt
Russia Indonesia Kazakhstan Poland Colombia
248 Mt 173 Mt 105 Mt 77 Mt 74 Mt
Source: World Coal Association.
Table 5.4 Top coal exporters as at 2010
Australia Indonesia Russia USA South Africa Colombia
Total
Steam
Coking
298 Mt 162 Mt 109 Mt 74 Mt 70 Mt
143 Mt 160 Mt 95 Mt 23 Mt 68 Mt
155 Mt 2 Mt 14 Mt 51 Mt 2 Mt
68 Mt
67 Mt
1 Mt
Source: World Coal Association.
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energy security (www.euracoal.be). Table 5.4 shows the world’s top ten coal exporters in 2010. Coal flows from country to country are often determined by geography; for example; markets in Asia are mainly supplied by Australia and Indonesia. This chapter reviews the coal industry in countries in which the market for coal has long been established: Australia, Canada, Germany, Hungary, Poland, South Africa, Turkey, the UK, Ukraine and the USA. Coal production is discussed first, followed by aspects of coal demand for each territory. Coal supply and demand in emerging economies is discussed in the chapters which follow.
5.2 5.2.1
Australia Coal production
Total coal production in Australia has been growing at 2.2% per annum over the past 5 years to reach 405 million tonnes (Mt) in financial year 2010–2011 (The Australian Coal Association; http://www.australiancoal.com.au/, 2012).1 This figure was down from 471 Mt in 2009–2010. The drop was largely as a result of the Queensland floods of January 2011 where production in that state fell by some 30%. After processing, 326 Mt of black (bituminous) coal was available for both domestic use and for export in 2010–2011. Again, this represented a drop in production of some 14% from the 366 Mt produced in 2009–2010. New South Wales and Queensland remained the main producing states with around 97% of Australia’s saleable output of black coal, and almost all of Australia’s black coal exports. (Exports from Western Australia commenced in 2007.) Australia has $26.5 billion in advanced coal mining projects and associated infrastructure, involving more than 74 million additional tonnes of coal production by 2014. ‘Less advanced’ coal mine and coal infrastructure projects have a potential capital expenditure of $46.6 billion, if all projects were to proceed.
5.2.2
Role of coal in Australia
Black coal plays a major role in Australia’s electricity, steel, cement and other manufacturing industries. Black coal generates more than 54% of Australia’s electricity used by business, industry and households; 4.7 Mt of metallurgical coal are used each year by the Australian steel industry and coal is an essential ingredient in cement making.
1
The material in Section 5.2 is directly quoted from http://www.australiancoal.com.au/ and is used with permission.
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5.2.3
Coal exports
Black coal is Australia’s second-highest export commodity and Australia is the world’s leading coal exporter. Over the past 10 years, black coal exports have increased by more than 50%. Japan takes 39.3% of Australia’s black coal exports – the largest share, with a total of 115.3 Mt exported last financial year. China is the second largest market with 42.4 Mt in 2009–2010, almost double that of the previous year. The Republic of Korea accounts for 40.7 Mt, India for 31.92 Mt and Taiwan for 26.53 Mt, rounding out the top five destinations for coal from Australia. Together these five countries accounted for 88% of all black coal exports with a further 28 countries taking the remaining 12%. Demand for coal in China and India is expected to increase dramatically over the next decade in line with these countries’ projected need for coal for energy and manufacturing. Australia was the only one of the world’s 33 advanced economies to grow in 2009 during the worst global recession since the Great Depression. The principal reason for this was the country’s continued coal exports. The importance of coal in the economy is also evident in its growing share of Gross Domestic Product. This share has more than doubled, from 1.7% in 2006–2007 to 3.5% in 2008–2009, making it the largest contributor to the mining sector. In 2011, Australia’s thermal coal exports grew by 4%, relative to 2010, to total 148 Mt. Projections for 2012 see an increase of 10% in 2012 to 162 Mt, then growing at an average annual rate of 11% between 2013 and 2017, to total 271 Mt by the end of the period. Australia’s exports of metallurgical coal are forecast to increase at an average annual rate of 8%, reaching 218 Mt in 2017, with total earnings forecast at $40 billion in current Australian dollars.
5.3 5.3.1
Canada Coal production
Canadian coal production has been around 66 Mt over the last 10 years.2 However in 2010, coal production increased to almost 68 Mt. Forty Mt was thermal coal and 28 was steel-making coal. In 2010, overall coal production increased by 8% compared to 2009.
5.3.2
Role of coal in Canada
Canada consumed 48 Mt of coal in 2009 and most of this was for coal-fired electricity. 42 Mt was used by 19 coal-fired power generation plants in Canada, 3 Mt was transformed into coke and used in the iron and steel industry and 3 Mt was used for industrial energy and non-energy uses. 2
The material in section 5.3 is directly quoted from http://www.coal.ca/ and is used with permission.
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Some provinces rely heavily on coal-fired electricity. The following shows the per cent of electricity generation which comes from coal: • • •
Alberta – 74% Nova Scotia – 73% Saskatchewan – 60%
Cost-effective and reliable coal-fired electricity contributes to a strong economic advantage for Alberta and Saskatchewan because of the abundance of locally sourced coal which is harnessed through a ‘mine-mouth’ operation where coal is removed from the earth and moved to a nearby power generation plant to be converted to electricity.
5.3.3
Coal exports
Coal mining is an important contributor to Canada’s GDP – contributing an estimated $5.2 billion in direct and indirect impacts in 2011. In recent years the industry has seen remarkably strong growth in revenue and capital investment. Between 2001 and 2010, revenue grew by 14.6% and during the same time frame capital investments grew by 19.3%. The industry benefits Canadians through employment, investment in physical infrastructure and taxes and royalties which help to pay for roads, schools and hospitals. 40% of the coal produced in Canada is exported. In 2010, exports totalled 33 Mt, a 22% increase from the previous year. The majority of the coal exported was steel-making coal. The percentage of total exports in 2010 was as follows: • • •
Asia – 73% Europe and the Middle East – 14% US – 13%
To meet its rapid infrastructure growth and consumer demand for things such as vehicles and home appliances, Asia has turned to Canada for its high-quality steel-making coal. As Canada’s largest coal-trading partner, coal exports to Asia accounted for 73% of total exports in 2010.
5.4 5.4.1
Germany Coal production
Germany has considerable reserves of hard coal (2500 Mt) and lignite (40 500 Mt).3 Subsidised hard coal production is to be phased out by 2018, 3
The material in sections 5.4, 5.5, 5.6, 5.8, 5.9 and 5.10 is directly quoted from http://www. euracoal.be and is used with permission.
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in agreement with national and European regulations. Restructuring of the hard coal industry continues in Germany which still has five operating deep mines, namely the collieries West, Prosper-Haniel and Auguste Victoria (and Ost until its closure in October 2010) located in the Ruhr area, the Saar mine in the Saar coalfield and another deep mine near Ibbenbüren. Production in 2010 from these three coalfields can be broken down as follows: 75% from the Ruhr area, 10% from the Saar and 15% from the Ibbenbüren coalfield. Lignite production, which totalled 169.4 Mt (52.3 Mtce) in 2010, was centred in four mining regions, namely the Rhineland around Cologne, Aachen and M ö nchengladbach, the Lusatian mining area in south-eastern Brandenburg and north-eastern Saxony, the Central German mining area in the south-east of Saxony-Anhalt and in north west Saxony as well as the Helmstedt mining area in Lower Saxony. In these four mining areas, lignite is exclusively extracted in opencast mines.
5.4.2
Role of coal in Germany
Hard coal and lignite are Germany’s most important indigenous source of energy. In 2010, the German hard coal market amounted to 57.8 Mtce, of which 39.7 Mtce were used for power and heat generation, whilst 16.6 Mtce went to the steel industry. The remaining 1.5 Mtce were sold to the residential heat market. Germany was the EU’s largest hard coal importer in 2010, as well as one of the world’s largest coke importers. Some 45 Mt of hard coal (steam coal and coking coal) or 77% of the national consumption were imported in 2010. The biggest suppliers of hard coal to Germany were Russia, with a market share of more than 22%, followed by Colombia with more than 14%. Exports from the USA and Poland each accounted for 11% and most coke was also imported from Poland. Lignite availability in 2010 totalled 51.5 Mtce, with a domestic output accounting for 52.3 Mtce and imports of approximately 80 000 tce. Lignite exports amounted to 0.9 Mtce of pulverised lignite and briquettes. Lignite is currently an indispensable energy source for Germany because it is abundantly available for long-term use and is competitive. Furthermore, the lignite industry is an important employer and investor, adding major economic value to the mining regions. More than 90% of lignite production is used for power generation (154.6 Mt), accounting for nearly 24% of the total power generation in Germany. Lignite use, according to the scenarios, remains stable until 2020, but practically disappears as an energy source by 2050.
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5.5 5.5.1
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Hungary Coal production
Hungary’s most important indigenous coal reserves comprise approximately 8.5 billion tonnes of coal. Lignite and brown coal account for about 80% of the country’s total coal reserves, making these the most important indigenous sources of energy. Hungary’s lignite and brown coal resources are concentrated in the regions of Transdanubia and in northern and north-eastern Hungary. MÁTRAI ERÖMÜ ZRT’s (MÁTRA’s) 1000 square kilometre lignite field, which has proven mineral reserves of approximately 800 Mt, is located 90 km to the east of Budapest. Extraction here is concentrated at the two opencast mines of Bükkábrány and Visonta. In 2010, MÁTRA produced approximately 8.2 Mt of lignite after removing some 67 million cubic metres of overburden. The lignite mined at Bükkábrány, some 60 km away from Visonta, is transported to the power station by rail. Currently total lignite output in Hungary is about 9 Mt.
5.5.2
Role of coal in Hungary
In 2010, electricity produced from coal had a share of 17% in national gross electricity generation. Most of the coal-based electricity was generated by MÁTRA. MÁTRA is Hungary’s biggest lignite-based power generator, with a market share of about 15%. Due to an environmental moratorium on coal-fired power stations, which affects coal-fired power generation installations not fitted with flue-gas desulphurisation systems, MÁTRA’s opencast mines at Visonta and Bükkábrány and the deep mine supplying the Vértes power station group are the only coal production sites still in operation since 2005. The Vértes power station is planned to be shut down, so the associated mining operations will be also phased out in the coming years. However, political considerations may override this economic decision. 95% of the total lignite output is used for heat and power generation. The remaining coal goes to municipalities, households and other consumers. Annual lignite production in Hungary is expected to remain more or less at the current level until the end of the second trading period under the EU Emissions Trading Scheme. For the following period, from 2013, it remains to be seen how carbon-trading regulations and the development of prices will affect lignite-based power production in Hungary.
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5.6 5.6.1
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Poland Coal production
Poland has hard coal reserves totalling 16.9 billion tonnes, mainly located in the Upper Silesia basin and in the Lublin basin in the east of Poland. These are also the locations for the commercially workable hard coal reserves, with the Upper Silesian coalfield accounting for 93% of the total. The coal reserves in this region contain some 400 coal seams with thicknesses of 0.8– 3.0 m, about half of which are economically workable. Some 56% of the workable coal reserves consist of steam coal, while the remaining 44% are coking coal. Mineable lignite reserves amount to almost 15 billion tonnes. Poland’s lignite deposits are exclusively mined in opencast mines. Two of these operations are located in central Poland and a third one lies in the southwest of the country. In 2010, total lignite production reached 56.3 Mt (15.2 Mtce). Poland’s lignite mining areas are expected to maintain their annual production output at current levels of around 60 Mt, and lignite is expected to play an important role in Poland’s energy supply until at least 2030.
5.6.2
Role of coal in Poland
Coal and lignite are key strategic fuels for power generation in Poland, where indigenous supplies of these solid fuels have underpinned growth in electricity output. The contribution of coal and lignite to total power generation is dominant today, and is expected to be maintained in the medium term. In recent years, however, Poland has become a net importer of coal. In 2010, imports of coal amounted to 13.4 Mt. Imports were dominated by deliveries from Russia, with minor volumes originating from other sources, including the Czech Republic, Colombia and Kazakhstan. 99.3% of Poland’s lignite production in 2010 was used by mine-mouth power plants. Lignitefired power stations generated 48.7 TWh of electricity, representing 30.9% of the total power generated in Poland.
5.7
South Africa
5.7.1
Coal production
According to Wood Mackenzie, South African coal reserves (i.e. the forecast of future marketable coal production for the duration of each mine/project) amount to a total of 7.8 billion tonnes, 97% of which is thermal coal, with the remaining 3% made up of metallurgical coal. The majority of these reserves
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(5.2 billion tonnes; 66% of the total) are in Mpumalanga Province, largely in the form of thermal coal reserves in the Witbank, Highveld and Ermelo coalfields. Mpumalanga also contains 1% of the total amount of metallurgical coal, principally as pulverised coal injection (PCI) coal, but the largest reserves of this type of coal are found in Limpopo province, which holds 92% of metallurgical coal marketable reserves, and 27% of the total marketable coal (2.1 billion tonnes). In terms of total annual output, Wood Mackenzie estimates that the South African coal industry produced 239 Mt in 2011, of which 234 Mt was thermal coal and 5 Mt metallurgical coal, which represents a reduction of more than 2% compared to the previous year’s output. As might be expected from the total reserves data above, the vast majority of coal was produced in Mpumalanga (196 Mt; 82%), followed by Limpopo (19 Mt; 8%), with the remainder from Free State and KwaZulu Natal provinces (http://www. woodmacresearch.com).
5.7.2
Role of coal in South Africa
Coal plays a major role in South Africa’s electricity, steel, cement and other manufacturing industries. Coal generates approximately 93% of South Africa’s electricity used by business, industry and households (World Coal Association).
5.7.3
Coal exports
In 2011, approximately 29% of the total coal produced in South Africa was exported, amounting to 71.5 Mt. This represents an increase over the previous year, when 67.6 Mt were exported; however, South Africa’s increase in exports in 2010 was largely offset by a decline in domestic production. India has been the largest importer of South African coal since 2009, and imported 18.9 Mt in 2011. The second largest importer was China, with 11.6 Mt, an increase of 63% compared to 2010. The Netherlands, which was the largest importer in 2008, fell to only the ninth place in 2011. Thanks to the substantial imports from India and China, Asia was the region with the largest imports of South African coal in 2011, with a total of 42.7 Mt, accounting for 60% of total exports, compared to 39.7 Mt (59%) in 2010. The largest increase in imports came from the Middle East, which imported 42% more coal from South Africa in 2011 than in 2010. At the opposite end of the scale, exports to the Americas declined by 43%, while exports to Europe also fell, from 15.3 Mt to 15.1 Mt (21% of South Africa’s total coal exports) (http://www.woodmacresearch.com).
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5.8 5.8.1
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Turkey Coal production
Turkey has around 1.3 billion tonnes of hard coal and 11.5 billion tonnes of lignite resources, of which 0.5 billion tonnes and 9.8 billion tonnes respectively are proven reserves. Turkey’s main hard coal deposits are located in the Zonguldak basin, between Eregli and Amasra on the Black Sea coast in north-western Turkey. Hard coal resources in the basin are estimated at some 1335 Mt of which 534 Mt are in the proven category. The Turkish coal sector produces both hard coal (2.8 Mt in 2010) and lignite (69.0 Mt). Lignite is Turkey’s most important indigenous energy resource. Deposits are spread across the country, with proven reserves of 9837 Mt. The most important lignite deposits are located at the Afsin-Elbistan lignite basin of south-eastern Anatolia, near the city of Maraš, where the geological and economically mineable reserves are estimated at around 5000 Mt of low quality lignite. The Soma basin is the second largest lignite area in Turkey. Other important deposits are located in the Tunçbilek, Seyitömer, Bursa, Çan, Muğla, Beypazarı, Sivas and Konya Karapınar basins. The quality of Turkish lignite is generally very poor and only around 6% of the reserves have a heat content of more than 3000 kcal/kg. In 2010, lignite output totalled 69.0 Mt. Almost 90% of Turkey’s total lignite production is from opencast mines. However, there are some underground mining activities, mainly in the Soma, Tunçbilek and Beypazarı basins. The scale of the surface operations allows lignite to be produced at a relatively low cost, making it competitive with imported energy resources.
5.8.2
Role of coal in Turkey
As Turkey’s indigenous energy resources consist almost exclusively of lignite and small amounts of hard coal, the country is heavily dependent on imports of hard coal, oil and gas. The country imports approximately 72% of total primary energy needs. In 2010, Turkey imported 26.9 Mt of hard coal for thermal power plants, steel production, industry and domestic heating purposes, 38.3% from Russia, 10.6% from Colombia, 9.0% from the USA and 7.6% from South Africa. Coal imports to Turkey are expected to increase over the next years. Turkey’s domestically-produced hard coal is mainly used for power generation. At present only a small power station (300 MW) is fed with domestic hard coal from the Zonguldak basin, while the larger Iskenderun power plant (1200 MW) uses imported hard coal. The other power plants use lignite. In total, Turkish coal-fired plants have a capacity of approximately 10.6
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GW. The main market for Turkey’s lignite is lignite-fired power plants which had a total capacity of 8334 MW in 2009.
5.9 5.9.1
UK Coal production
The UK has significant, potentially economic, hard coal resources estimated at 3000 Mt. About 600 Mt of reserves are available in existing deep mines or in shallow deposits capable of being extracted by surface mining. In addition, currently inaccessible resources have the potential to provide many years of future production at present levels. There is also about 500 Mt of lignite resources, mainly in Northern Ireland, although none is mined or consumed at present. Indigenous production of coal in 2010 was split between deep mines with 7.4 Mt, surface mines with 10.4 Mt, and 0.6 Mt from other sources, such as tip washing
5.9.2
Role of coal in the UK
In 2010, the UK hard coal supply totalled 44.9 Mt, with 18.4 Mt covered by indigenous production and 26.5 Mt by imports. There was a significant stock reduction of 7.1 Mt. Imports supplied virtually the whole of the coking coal market, as the UK no longer produces significant quantities of coal suitable for use in coke ovens. The UK also exported 0.6 Mt of hard coal. Power generation in the UK reflects a diverse energy mix. In 2010, net electricity supplied was 363.7 TWh, dominated by natural gas (47.2%), hard coal (28.1%) and nuclear power (15.5%). Hydropower and renewables contributed 7.3%, oil 1.2% and net imports provided 0.7% of electricity supplied. Coal consumption in 2010 was 51.5 Mt, of which 41.5 Mt was used for electricity generation. Hard coal consumption in the steel industry was 6.6 Mt.
5.10 5.10.1
Ukraine Coal production
Ukraine’s total coal resources are estimated at 54 billion tonnes. Economically mineable coal reserves are estimated at a further 34 billion tonnes, of which 6.1 billion tonnes are located in active mines. Of these reserves, 3.5 billion tonnes are steam coal and 2.6 billion tonnes coking coal. Ukraine also has some lignite reserves. The main coal reserves (45.6%) are concentrated in the Donetsk coal basin. A further 34.2% of reserves are located in the
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Luhansk region, 15.3% in the Dnipropetrovsk region and the remaining 4.9% in the regions of Lviv, Volyn and Kirovograd. The ‘Energy Strategy of Ukraine’ plans an increase of indigenous coal extraction, in order to secure the country’s energy supply, which for the moment is too dependent on imported gas. The long-term development of the coal industry will be implemented in three stages. The first stage (2011–2015) aims to restructure the coal industry. State-owned mines will be privatised and uncompetitive mines closed or restructured, in order to make them attractive for investors. Total coal output will not be allowed to decrease because there are no other energy sources able to bridge any shortfall. The second step (2015–2020) foresees the upgrading and modernisation of privatised coal mines by their new owners. In the third step (2020–2030), stable growth of the coal industry will be achieved. Currently, 149 mines are operating in Ukraine, including 120 state-owned and 29 private mines. The coal industry in Ukraine employs about 271 000 people. Ukraine’s coal sector includes projects on coal-mining processes, such as coal preparation, the development of new mines and mining engineering. Scientific and research institutes, development laboratories and technological institutes also work for the coal industry. The total coal output can be increased to 115 Mt in 2030 (including up to 75 Mt of steam coal) as a result of implementing the three-stage development strategy. Ukraine figures amongst the top ten coal-mining countries of the world. However, its technical and economic parameters, and its occupational health and safety situation, must still be improved. The main factors that influence health and safety in Ukrainian coal mines are difficult geological conditions and outdated equipment.
5.10.2
Role of coal in Ukraine
Until 1970, three-quarters of Ukrainian electricity was generated by coalfired thermal power plants. Today, only one-third of electricity is produced from solid fuels. The national economy is highly dependent on imported energy, in particular on natural gas and oil. Therefore, taking into account Ukraine’s considerable reserves, coal will remain the main indigenous energy source for decades to come, securing the country’s energy supply, as well as its economic and political independence.
5.11 5.11.1
USA Coal production
Wood Mackenzie examined the total marketable thermal coal reserves in the US in January 2012 and put the total at nearly 24 billion short tons, while
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the US Geological Survey has estimated the Demonstrated Reserve Base in the US at over 300 billion short tons. Thermal coal production in the US fell by 6.4 million short tons in 2011, with the most significant reductions observed in the Powder River Basin and Northern Appalachia, as a result of both increased competition from natural gas and growing regulatory pressure. In addition, a number of producers from Central and Northern Appalachia are choosing to use higher quality thermal coals with coking properties in the metallurgical coal market in order to obtain higher margins, although this was less in evidence in 2011 than in 2010. Metallurgical coal production in the US showed considerable growth in 2011, partly as a result of the global coal shortage caused by flooding in Australia, rising to 90.7 million short tons, an increase of 19% compared to 2010, and 60% compared to 2009. The majority of metallurgical coal was produced in Central Appalachia (64% of the total), with 26% and 11% produced in Northern and Southern Appalachia respectively. The trend mentioned above for thermal coals being used in the metallurgical market meant that the Appalachian region produced significantly more metallurgical coal in 2011 than in 2010, as thermal coals from the Pittsburgh seam crossed over to the metallurgical market (http://www.woodmacresearch.com).
5.11.2
Role of coal in the USA
The US domestic market for thermal coal showed no significant changes in 2011; however, exports have shown significant increases, with a total of 40.8 million short tons in 2011 compared to 12.7 million short tons in 2010 and 9.2 million short tons in 2009. The largest proportion of thermal coal exports in 2011 came from Central Appalachia, with a total of 13.3 million short tons compared to 3.4 million short tons in 2010. This substantial increase can be explained by a high demand for coal, combined with low ocean freight rates, which has made coal from Appalachia more appealing and more economical for European utilities, particularly because traditional European supplies are tending to shift towards Asian markets. The high international demand for coal also led to growth in other coal-producing areas in 2011, such as the Powder River and Illinois Basin (http://www. woodmacresearch.com).
© Woodhead Publishing Limited, 2013
DOI: 10.1533/9781782421177.2.105 Abstract: This chapter covers the coal industry in countries in which the coal market has long been established. The countries in question are Australia, Canada, Germany, Hungary, Poland, South Africa, Turkey, the UK, Ukraine and the USA. Coal supply aspects are discussed first, followed by aspects of coal demand for each territory. Key words: established coal markets, coal production, coal use, coal export, Australia, Canada, Germany, Hungary, Poland, Turkey, the UK, Ukraine, the USA.
5.1
Introduction
Coal, of which world production was 7.2 billion tonnes in 2010, is a major source of primary energy globally, ranking second after only oil. It plays a key role in power generation, in particular enabling power generation at an affordable cost. In general over the last decade the use of coal has increased by 28%, more strongly than any other primary energy source; however, trends vary from region to region. Broadly speaking coal consumption has been stable in OECD countries over the last decade; however, in the EU, there was a 14% drop. The demand for coal in developing countries has increased dramatically over the same period. Countries demonstrating particular increases in demand for coal have been China and India (www.euracoal.be). Table 5.1 shows the top ten coal consumers in 2010. Table 5.2 shows proven coal reserves at the end of 2009. Table 5.3 shows the world’s top ten coal producers as of 2010. Some countries feature in both Tables 5.1 and 5.3, however not all; so it is evident that some coal is traded internationally. In 2010, only 14.8% of the coal produced globally was traded, indicating that coal is mainly used near the site of mining. In general, it can be cost effective to export coal from mines located near sea ports with low production costs to customers overseas. Imported coal can play a major role in increasing a country’s 105 © Woodhead Publishing Limited, 2013
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The coal handbook Table 5.1 Top ten coal consumers in 2010 PR China USA India Russia Japan
2516 Mtce 733 Mtce 434 Mtce 177 Mtce 165 Mtce
South Africa Germany Korea Poland Chinese Taipei
141 Mtce 105 Mtce 103 Mtce 87 Mtce 60 Mtce
Source: World Coal Association. Table 5.2 Proven reserves at end of 2009 Country
Billion Tonnes
Russia Australia Ukraine South Africa Brazil USA PR China India Kazakhstan Poland
157 76.2 33.9 30.4 7.1 238.3 114.5 58.6 31.3 7.5
Source: World Coal Association. Table 5.3 Top ten hard coal producers as at 2010 PR China USA India Australia South Africa
3162 Mt 932 Mt 538 Mt 353 Mt 255 Mt
Russia Indonesia Kazakhstan Poland Colombia
248 Mt 173 Mt 105 Mt 77 Mt 74 Mt
Source: World Coal Association.
Table 5.4 Top coal exporters as at 2010
Australia Indonesia Russia USA South Africa Colombia
Total
Steam
Coking
298 Mt 162 Mt 109 Mt 74 Mt 70 Mt
143 Mt 160 Mt 95 Mt 23 Mt 68 Mt
155 Mt 2 Mt 14 Mt 51 Mt 2 Mt
68 Mt
67 Mt
1 Mt
Source: World Coal Association.
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energy security (www.euracoal.be). Table 5.4 shows the world’s top ten coal exporters in 2010. Coal flows from country to country are often determined by geography; for example; markets in Asia are mainly supplied by Australia and Indonesia. This chapter reviews the coal industry in countries in which the market for coal has long been established: Australia, Canada, Germany, Hungary, Poland, South Africa, Turkey, the UK, Ukraine and the USA. Coal production is discussed first, followed by aspects of coal demand for each territory. Coal supply and demand in emerging economies is discussed in the chapters which follow.
5.2 5.2.1
Australia Coal production
Total coal production in Australia has been growing at 2.2% per annum over the past 5 years to reach 405 million tonnes (Mt) in financial year 2010–2011 (The Australian Coal Association; http://www.australiancoal.com.au/, 2012).1 This figure was down from 471 Mt in 2009–2010. The drop was largely as a result of the Queensland floods of January 2011 where production in that state fell by some 30%. After processing, 326 Mt of black (bituminous) coal was available for both domestic use and for export in 2010–2011. Again, this represented a drop in production of some 14% from the 366 Mt produced in 2009–2010. New South Wales and Queensland remained the main producing states with around 97% of Australia’s saleable output of black coal, and almost all of Australia’s black coal exports. (Exports from Western Australia commenced in 2007.) Australia has $26.5 billion in advanced coal mining projects and associated infrastructure, involving more than 74 million additional tonnes of coal production by 2014. ‘Less advanced’ coal mine and coal infrastructure projects have a potential capital expenditure of $46.6 billion, if all projects were to proceed.
5.2.2
Role of coal in Australia
Black coal plays a major role in Australia’s electricity, steel, cement and other manufacturing industries. Black coal generates more than 54% of Australia’s electricity used by business, industry and households; 4.7 Mt of metallurgical coal are used each year by the Australian steel industry and coal is an essential ingredient in cement making.
1
The material in Section 5.2 is directly quoted from http://www.australiancoal.com.au/ and is used with permission.
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5.2.3
Coal exports
Black coal is Australia’s second-highest export commodity and Australia is the world’s leading coal exporter. Over the past 10 years, black coal exports have increased by more than 50%. Japan takes 39.3% of Australia’s black coal exports – the largest share, with a total of 115.3 Mt exported last financial year. China is the second largest market with 42.4 Mt in 2009–2010, almost double that of the previous year. The Republic of Korea accounts for 40.7 Mt, India for 31.92 Mt and Taiwan for 26.53 Mt, rounding out the top five destinations for coal from Australia. Together these five countries accounted for 88% of all black coal exports with a further 28 countries taking the remaining 12%. Demand for coal in China and India is expected to increase dramatically over the next decade in line with these countries’ projected need for coal for energy and manufacturing. Australia was the only one of the world’s 33 advanced economies to grow in 2009 during the worst global recession since the Great Depression. The principal reason for this was the country’s continued coal exports. The importance of coal in the economy is also evident in its growing share of Gross Domestic Product. This share has more than doubled, from 1.7% in 2006–2007 to 3.5% in 2008–2009, making it the largest contributor to the mining sector. In 2011, Australia’s thermal coal exports grew by 4%, relative to 2010, to total 148 Mt. Projections for 2012 see an increase of 10% in 2012 to 162 Mt, then growing at an average annual rate of 11% between 2013 and 2017, to total 271 Mt by the end of the period. Australia’s exports of metallurgical coal are forecast to increase at an average annual rate of 8%, reaching 218 Mt in 2017, with total earnings forecast at $40 billion in current Australian dollars.
5.3 5.3.1
Canada Coal production
Canadian coal production has been around 66 Mt over the last 10 years.2 However in 2010, coal production increased to almost 68 Mt. Forty Mt was thermal coal and 28 was steel-making coal. In 2010, overall coal production increased by 8% compared to 2009.
5.3.2
Role of coal in Canada
Canada consumed 48 Mt of coal in 2009 and most of this was for coal-fired electricity. 42 Mt was used by 19 coal-fired power generation plants in Canada, 3 Mt was transformed into coke and used in the iron and steel industry and 3 Mt was used for industrial energy and non-energy uses. 2
The material in section 5.3 is directly quoted from http://www.coal.ca/ and is used with permission.
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Some provinces rely heavily on coal-fired electricity. The following shows the per cent of electricity generation which comes from coal: • • •
Alberta – 74% Nova Scotia – 73% Saskatchewan – 60%
Cost-effective and reliable coal-fired electricity contributes to a strong economic advantage for Alberta and Saskatchewan because of the abundance of locally sourced coal which is harnessed through a ‘mine-mouth’ operation where coal is removed from the earth and moved to a nearby power generation plant to be converted to electricity.
5.3.3
Coal exports
Coal mining is an important contributor to Canada’s GDP – contributing an estimated $5.2 billion in direct and indirect impacts in 2011. In recent years the industry has seen remarkably strong growth in revenue and capital investment. Between 2001 and 2010, revenue grew by 14.6% and during the same time frame capital investments grew by 19.3%. The industry benefits Canadians through employment, investment in physical infrastructure and taxes and royalties which help to pay for roads, schools and hospitals. 40% of the coal produced in Canada is exported. In 2010, exports totalled 33 Mt, a 22% increase from the previous year. The majority of the coal exported was steel-making coal. The percentage of total exports in 2010 was as follows: • • •
Asia – 73% Europe and the Middle East – 14% US – 13%
To meet its rapid infrastructure growth and consumer demand for things such as vehicles and home appliances, Asia has turned to Canada for its high-quality steel-making coal. As Canada’s largest coal-trading partner, coal exports to Asia accounted for 73% of total exports in 2010.
5.4 5.4.1
Germany Coal production
Germany has considerable reserves of hard coal (2500 Mt) and lignite (40 500 Mt).3 Subsidised hard coal production is to be phased out by 2018, 3
The material in sections 5.4, 5.5, 5.6, 5.8, 5.9 and 5.10 is directly quoted from http://www. euracoal.be and is used with permission.
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in agreement with national and European regulations. Restructuring of the hard coal industry continues in Germany which still has five operating deep mines, namely the collieries West, Prosper-Haniel and Auguste Victoria (and Ost until its closure in October 2010) located in the Ruhr area, the Saar mine in the Saar coalfield and another deep mine near Ibbenbüren. Production in 2010 from these three coalfields can be broken down as follows: 75% from the Ruhr area, 10% from the Saar and 15% from the Ibbenbüren coalfield. Lignite production, which totalled 169.4 Mt (52.3 Mtce) in 2010, was centred in four mining regions, namely the Rhineland around Cologne, Aachen and M ö nchengladbach, the Lusatian mining area in south-eastern Brandenburg and north-eastern Saxony, the Central German mining area in the south-east of Saxony-Anhalt and in north west Saxony as well as the Helmstedt mining area in Lower Saxony. In these four mining areas, lignite is exclusively extracted in opencast mines.
5.4.2
Role of coal in Germany
Hard coal and lignite are Germany’s most important indigenous source of energy. In 2010, the German hard coal market amounted to 57.8 Mtce, of which 39.7 Mtce were used for power and heat generation, whilst 16.6 Mtce went to the steel industry. The remaining 1.5 Mtce were sold to the residential heat market. Germany was the EU’s largest hard coal importer in 2010, as well as one of the world’s largest coke importers. Some 45 Mt of hard coal (steam coal and coking coal) or 77% of the national consumption were imported in 2010. The biggest suppliers of hard coal to Germany were Russia, with a market share of more than 22%, followed by Colombia with more than 14%. Exports from the USA and Poland each accounted for 11% and most coke was also imported from Poland. Lignite availability in 2010 totalled 51.5 Mtce, with a domestic output accounting for 52.3 Mtce and imports of approximately 80 000 tce. Lignite exports amounted to 0.9 Mtce of pulverised lignite and briquettes. Lignite is currently an indispensable energy source for Germany because it is abundantly available for long-term use and is competitive. Furthermore, the lignite industry is an important employer and investor, adding major economic value to the mining regions. More than 90% of lignite production is used for power generation (154.6 Mt), accounting for nearly 24% of the total power generation in Germany. Lignite use, according to the scenarios, remains stable until 2020, but practically disappears as an energy source by 2050.
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Hungary Coal production
Hungary’s most important indigenous coal reserves comprise approximately 8.5 billion tonnes of coal. Lignite and brown coal account for about 80% of the country’s total coal reserves, making these the most important indigenous sources of energy. Hungary’s lignite and brown coal resources are concentrated in the regions of Transdanubia and in northern and north-eastern Hungary. MÁTRAI ERÖMÜ ZRT’s (MÁTRA’s) 1000 square kilometre lignite field, which has proven mineral reserves of approximately 800 Mt, is located 90 km to the east of Budapest. Extraction here is concentrated at the two opencast mines of Bükkábrány and Visonta. In 2010, MÁTRA produced approximately 8.2 Mt of lignite after removing some 67 million cubic metres of overburden. The lignite mined at Bükkábrány, some 60 km away from Visonta, is transported to the power station by rail. Currently total lignite output in Hungary is about 9 Mt.
5.5.2
Role of coal in Hungary
In 2010, electricity produced from coal had a share of 17% in national gross electricity generation. Most of the coal-based electricity was generated by MÁTRA. MÁTRA is Hungary’s biggest lignite-based power generator, with a market share of about 15%. Due to an environmental moratorium on coal-fired power stations, which affects coal-fired power generation installations not fitted with flue-gas desulphurisation systems, MÁTRA’s opencast mines at Visonta and Bükkábrány and the deep mine supplying the Vértes power station group are the only coal production sites still in operation since 2005. The Vértes power station is planned to be shut down, so the associated mining operations will be also phased out in the coming years. However, political considerations may override this economic decision. 95% of the total lignite output is used for heat and power generation. The remaining coal goes to municipalities, households and other consumers. Annual lignite production in Hungary is expected to remain more or less at the current level until the end of the second trading period under the EU Emissions Trading Scheme. For the following period, from 2013, it remains to be seen how carbon-trading regulations and the development of prices will affect lignite-based power production in Hungary.
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5.6 5.6.1
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Poland Coal production
Poland has hard coal reserves totalling 16.9 billion tonnes, mainly located in the Upper Silesia basin and in the Lublin basin in the east of Poland. These are also the locations for the commercially workable hard coal reserves, with the Upper Silesian coalfield accounting for 93% of the total. The coal reserves in this region contain some 400 coal seams with thicknesses of 0.8– 3.0 m, about half of which are economically workable. Some 56% of the workable coal reserves consist of steam coal, while the remaining 44% are coking coal. Mineable lignite reserves amount to almost 15 billion tonnes. Poland’s lignite deposits are exclusively mined in opencast mines. Two of these operations are located in central Poland and a third one lies in the southwest of the country. In 2010, total lignite production reached 56.3 Mt (15.2 Mtce). Poland’s lignite mining areas are expected to maintain their annual production output at current levels of around 60 Mt, and lignite is expected to play an important role in Poland’s energy supply until at least 2030.
5.6.2
Role of coal in Poland
Coal and lignite are key strategic fuels for power generation in Poland, where indigenous supplies of these solid fuels have underpinned growth in electricity output. The contribution of coal and lignite to total power generation is dominant today, and is expected to be maintained in the medium term. In recent years, however, Poland has become a net importer of coal. In 2010, imports of coal amounted to 13.4 Mt. Imports were dominated by deliveries from Russia, with minor volumes originating from other sources, including the Czech Republic, Colombia and Kazakhstan. 99.3% of Poland’s lignite production in 2010 was used by mine-mouth power plants. Lignitefired power stations generated 48.7 TWh of electricity, representing 30.9% of the total power generated in Poland.
5.7
South Africa
5.7.1
Coal production
According to Wood Mackenzie, South African coal reserves (i.e. the forecast of future marketable coal production for the duration of each mine/project) amount to a total of 7.8 billion tonnes, 97% of which is thermal coal, with the remaining 3% made up of metallurgical coal. The majority of these reserves
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(5.2 billion tonnes; 66% of the total) are in Mpumalanga Province, largely in the form of thermal coal reserves in the Witbank, Highveld and Ermelo coalfields. Mpumalanga also contains 1% of the total amount of metallurgical coal, principally as pulverised coal injection (PCI) coal, but the largest reserves of this type of coal are found in Limpopo province, which holds 92% of metallurgical coal marketable reserves, and 27% of the total marketable coal (2.1 billion tonnes). In terms of total annual output, Wood Mackenzie estimates that the South African coal industry produced 239 Mt in 2011, of which 234 Mt was thermal coal and 5 Mt metallurgical coal, which represents a reduction of more than 2% compared to the previous year’s output. As might be expected from the total reserves data above, the vast majority of coal was produced in Mpumalanga (196 Mt; 82%), followed by Limpopo (19 Mt; 8%), with the remainder from Free State and KwaZulu Natal provinces (http://www. woodmacresearch.com).
5.7.2
Role of coal in South Africa
Coal plays a major role in South Africa’s electricity, steel, cement and other manufacturing industries. Coal generates approximately 93% of South Africa’s electricity used by business, industry and households (World Coal Association).
5.7.3
Coal exports
In 2011, approximately 29% of the total coal produced in South Africa was exported, amounting to 71.5 Mt. This represents an increase over the previous year, when 67.6 Mt were exported; however, South Africa’s increase in exports in 2010 was largely offset by a decline in domestic production. India has been the largest importer of South African coal since 2009, and imported 18.9 Mt in 2011. The second largest importer was China, with 11.6 Mt, an increase of 63% compared to 2010. The Netherlands, which was the largest importer in 2008, fell to only the ninth place in 2011. Thanks to the substantial imports from India and China, Asia was the region with the largest imports of South African coal in 2011, with a total of 42.7 Mt, accounting for 60% of total exports, compared to 39.7 Mt (59%) in 2010. The largest increase in imports came from the Middle East, which imported 42% more coal from South Africa in 2011 than in 2010. At the opposite end of the scale, exports to the Americas declined by 43%, while exports to Europe also fell, from 15.3 Mt to 15.1 Mt (21% of South Africa’s total coal exports) (http://www.woodmacresearch.com).
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Turkey Coal production
Turkey has around 1.3 billion tonnes of hard coal and 11.5 billion tonnes of lignite resources, of which 0.5 billion tonnes and 9.8 billion tonnes respectively are proven reserves. Turkey’s main hard coal deposits are located in the Zonguldak basin, between Eregli and Amasra on the Black Sea coast in north-western Turkey. Hard coal resources in the basin are estimated at some 1335 Mt of which 534 Mt are in the proven category. The Turkish coal sector produces both hard coal (2.8 Mt in 2010) and lignite (69.0 Mt). Lignite is Turkey’s most important indigenous energy resource. Deposits are spread across the country, with proven reserves of 9837 Mt. The most important lignite deposits are located at the Afsin-Elbistan lignite basin of south-eastern Anatolia, near the city of Maraš, where the geological and economically mineable reserves are estimated at around 5000 Mt of low quality lignite. The Soma basin is the second largest lignite area in Turkey. Other important deposits are located in the Tunçbilek, Seyitömer, Bursa, Çan, Muğla, Beypazarı, Sivas and Konya Karapınar basins. The quality of Turkish lignite is generally very poor and only around 6% of the reserves have a heat content of more than 3000 kcal/kg. In 2010, lignite output totalled 69.0 Mt. Almost 90% of Turkey’s total lignite production is from opencast mines. However, there are some underground mining activities, mainly in the Soma, Tunçbilek and Beypazarı basins. The scale of the surface operations allows lignite to be produced at a relatively low cost, making it competitive with imported energy resources.
5.8.2
Role of coal in Turkey
As Turkey’s indigenous energy resources consist almost exclusively of lignite and small amounts of hard coal, the country is heavily dependent on imports of hard coal, oil and gas. The country imports approximately 72% of total primary energy needs. In 2010, Turkey imported 26.9 Mt of hard coal for thermal power plants, steel production, industry and domestic heating purposes, 38.3% from Russia, 10.6% from Colombia, 9.0% from the USA and 7.6% from South Africa. Coal imports to Turkey are expected to increase over the next years. Turkey’s domestically-produced hard coal is mainly used for power generation. At present only a small power station (300 MW) is fed with domestic hard coal from the Zonguldak basin, while the larger Iskenderun power plant (1200 MW) uses imported hard coal. The other power plants use lignite. In total, Turkish coal-fired plants have a capacity of approximately 10.6
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GW. The main market for Turkey’s lignite is lignite-fired power plants which had a total capacity of 8334 MW in 2009.
5.9 5.9.1
UK Coal production
The UK has significant, potentially economic, hard coal resources estimated at 3000 Mt. About 600 Mt of reserves are available in existing deep mines or in shallow deposits capable of being extracted by surface mining. In addition, currently inaccessible resources have the potential to provide many years of future production at present levels. There is also about 500 Mt of lignite resources, mainly in Northern Ireland, although none is mined or consumed at present. Indigenous production of coal in 2010 was split between deep mines with 7.4 Mt, surface mines with 10.4 Mt, and 0.6 Mt from other sources, such as tip washing
5.9.2
Role of coal in the UK
In 2010, the UK hard coal supply totalled 44.9 Mt, with 18.4 Mt covered by indigenous production and 26.5 Mt by imports. There was a significant stock reduction of 7.1 Mt. Imports supplied virtually the whole of the coking coal market, as the UK no longer produces significant quantities of coal suitable for use in coke ovens. The UK also exported 0.6 Mt of hard coal. Power generation in the UK reflects a diverse energy mix. In 2010, net electricity supplied was 363.7 TWh, dominated by natural gas (47.2%), hard coal (28.1%) and nuclear power (15.5%). Hydropower and renewables contributed 7.3%, oil 1.2% and net imports provided 0.7% of electricity supplied. Coal consumption in 2010 was 51.5 Mt, of which 41.5 Mt was used for electricity generation. Hard coal consumption in the steel industry was 6.6 Mt.
5.10 5.10.1
Ukraine Coal production
Ukraine’s total coal resources are estimated at 54 billion tonnes. Economically mineable coal reserves are estimated at a further 34 billion tonnes, of which 6.1 billion tonnes are located in active mines. Of these reserves, 3.5 billion tonnes are steam coal and 2.6 billion tonnes coking coal. Ukraine also has some lignite reserves. The main coal reserves (45.6%) are concentrated in the Donetsk coal basin. A further 34.2% of reserves are located in the
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Luhansk region, 15.3% in the Dnipropetrovsk region and the remaining 4.9% in the regions of Lviv, Volyn and Kirovograd. The ‘Energy Strategy of Ukraine’ plans an increase of indigenous coal extraction, in order to secure the country’s energy supply, which for the moment is too dependent on imported gas. The long-term development of the coal industry will be implemented in three stages. The first stage (2011–2015) aims to restructure the coal industry. State-owned mines will be privatised and uncompetitive mines closed or restructured, in order to make them attractive for investors. Total coal output will not be allowed to decrease because there are no other energy sources able to bridge any shortfall. The second step (2015–2020) foresees the upgrading and modernisation of privatised coal mines by their new owners. In the third step (2020–2030), stable growth of the coal industry will be achieved. Currently, 149 mines are operating in Ukraine, including 120 state-owned and 29 private mines. The coal industry in Ukraine employs about 271 000 people. Ukraine’s coal sector includes projects on coal-mining processes, such as coal preparation, the development of new mines and mining engineering. Scientific and research institutes, development laboratories and technological institutes also work for the coal industry. The total coal output can be increased to 115 Mt in 2030 (including up to 75 Mt of steam coal) as a result of implementing the three-stage development strategy. Ukraine figures amongst the top ten coal-mining countries of the world. However, its technical and economic parameters, and its occupational health and safety situation, must still be improved. The main factors that influence health and safety in Ukrainian coal mines are difficult geological conditions and outdated equipment.
5.10.2
Role of coal in Ukraine
Until 1970, three-quarters of Ukrainian electricity was generated by coalfired thermal power plants. Today, only one-third of electricity is produced from solid fuels. The national economy is highly dependent on imported energy, in particular on natural gas and oil. Therefore, taking into account Ukraine’s considerable reserves, coal will remain the main indigenous energy source for decades to come, securing the country’s energy supply, as well as its economic and political independence.
5.11 5.11.1
USA Coal production
Wood Mackenzie examined the total marketable thermal coal reserves in the US in January 2012 and put the total at nearly 24 billion short tons, while
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the US Geological Survey has estimated the Demonstrated Reserve Base in the US at over 300 billion short tons. Thermal coal production in the US fell by 6.4 million short tons in 2011, with the most significant reductions observed in the Powder River Basin and Northern Appalachia, as a result of both increased competition from natural gas and growing regulatory pressure. In addition, a number of producers from Central and Northern Appalachia are choosing to use higher quality thermal coals with coking properties in the metallurgical coal market in order to obtain higher margins, although this was less in evidence in 2011 than in 2010. Metallurgical coal production in the US showed considerable growth in 2011, partly as a result of the global coal shortage caused by flooding in Australia, rising to 90.7 million short tons, an increase of 19% compared to 2010, and 60% compared to 2009. The majority of metallurgical coal was produced in Central Appalachia (64% of the total), with 26% and 11% produced in Northern and Southern Appalachia respectively. The trend mentioned above for thermal coals being used in the metallurgical market meant that the Appalachian region produced significantly more metallurgical coal in 2011 than in 2010, as thermal coals from the Pittsburgh seam crossed over to the metallurgical market (http://www.woodmacresearch.com).
5.11.2
Role of coal in the USA
The US domestic market for thermal coal showed no significant changes in 2011; however, exports have shown significant increases, with a total of 40.8 million short tons in 2011 compared to 12.7 million short tons in 2010 and 9.2 million short tons in 2009. The largest proportion of thermal coal exports in 2011 came from Central Appalachia, with a total of 13.3 million short tons compared to 3.4 million short tons in 2010. This substantial increase can be explained by a high demand for coal, combined with low ocean freight rates, which has made coal from Appalachia more appealing and more economical for European utilities, particularly because traditional European supplies are tending to shift towards Asian markets. The high international demand for coal also led to growth in other coal-producing areas in 2011, such as the Powder River and Illinois Basin (http://www. woodmacresearch.com).
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