CIAB Market & Policy developments 2005/06 - IEA

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• decreased operation at hydro-electric power stations resulting from water shortages. In 2006, 83% of lignite was consumed in power stations, 10% by households and 7% by industry. 3.3 Coal Supply 3.3.1 Hard Coal Chart 2 - Hard Coal Production (million tonnes) Source: IEA Statistics 6000 5000 4000 3000 2000 1000 0 1973 1980 1985 1990 1995 2000 2002 2003 2004 2005 2006e EU(19) 471 488 443 368 289 202 189 186 181 169 159 OECD 1117 1336 1381 1456 1405 1395 1433 1404 1462 1487 1510 World 2235 2802 3193 3498 3657 3623 3888 4220 4634 4934 5370 © OECD/IEA, 2007 124. World production has continued to grow strongly over the last six years, with the 2006 level almost 50% higher than in 2000, a rate of growth averaging nearly 7% a year. Over 70% of this 1.75 billion tonne growth was in China. 125. According to IEA estimates, China produced 2,481 million tonnes of hard coal in 2006, accounting for 46% of the world total. Steam coal exports were 59 million tonnes in 2005, a 7 million tonne reduction on 2005, while imports grew by 10 million tonnes. 126. Small coal mines will continue to be closed and the government is encouraging consolidation of larger coal producers. China plans to close 4,000 dangerous and inefficient mines with a combined capacity of 100 million tonnes/year during 2007. Li Yizhong, head of the State Administration of Work Safety announced in March 2007 that 2,000 mines with a combined capacity of 30 million tonnes/year had already been closed. Over the three years to the end of 2007, China will have closed a total of 10,000 small mines. 127. South African hard coal production remained at 245 million tonnes (IEA estimate 244 million tonnes), with estimates of 177 million tonnes sold domestically to Eskom (109 million tonnes), Sasol (44 million tonnes) and others (24 million tonnes) and the major portion of the balance exported. - 20 -
128. There are 27.8 billion tonnes of mineable reserves in-situ, although infrastructure weaknesses, especially rail and port, and the distance of reserves from ports constrain competitiveness in the export markets. However, increased domestic power station and export demand will once more create the opportunity for old and new coal mines to increase production. 129. There is a continuous search by economic empowerment entrepreneurs for viable blocks of reserves to establish new mines, assisted by the Mineral and Petroleum Resources Development Act and the Mining Charter. A number of large BEE mining companies, previously only involved in gold, diamonds and platinum mining, are exploring brown-field and green-field opportunities in coal. Some of these companies have made agreements with existing independents and are waiting for opportunities to grow. 130. In 2006, almost 90% of the saleable coal production was supplied by mines controlled by the five largest mining groups (Anglo Coal, BHP Billiton, Sasol, Exxaro and Xstrata). Coal mines discarded 70 Mt of waste or discard coal. With the establishment of bigger BEE mining companies such as Exxaro, Shanduka and African Rainbow Minerals (ARM), a greater shift to BEE ownership is expected. 131. 2006 saw Indonesian hard coal production grow by 11% to 169 million tonnes. Exports continue to grow at a rapid rate, with the 2006 level of 129 million tonnes showing an 18% increase on the previous year. 132. Russian hard coal production grew by 30 million tonnes (15%) to 233 million tonnes in 2006, building on the previous year’s 15 million tonne growth. Russian hard coal exports increased by 17% to 92 million tonnes, with the increase more than accounted for by steam coal. Coking coal exports declined by 2 million tonnes. 133. In the United States of America, total coal production attained a new record of 1,163 million short tons (1,056 million tonnes) in 2006, a 2.8% increase on 2005. Hard coal (bituminous and sub-bituminous) production totalled 1,083 million short tons (982.5 million tonnes) and brown coal (lignite) production was 79.8 million short tons (72.4 million tonnes). Production increased in most major coal producing states, with demand driven in large part by electricity utility efforts to rebuild inventories. Rail transportation, a problem that contributed to inventory depletion in 2005, was considerably improved in 2006. Although some track upgrading continues in 2007, production this year has not, in the main, been affected by transportation issues. Production has however been affected by slower demand for inventory build and for consumption at electric power plants. Preliminary EIA data show that at the end of 2007 production was down by 3.5% in the Appalachian states, by 0.2% in the western region and by 1.0% in the interior region. In total, production was down by 1.4% when compared to the record levels of 2006, end the year at approximately 1,146 million short tons (1,040 million tonnes). 134. In 2006, production of coal exceeded domestic demand and exports. Excess production plus yet another record year for imports - the U.S. imported 36.2 million short tons (metric: 32.8 million tonnes) - contributed to a 40 million short ton addition (metric: 36.2 million tonnes) to power plant inventories. At the close of 2006, power plant inventories were at their highest level since 2001. 135. Overall, imports in 2007 are forecast to be approximately equal to the record set in 2006. In the ten months to October 2007, imports were essentially equal to those in the first ten months of 2006. Imports from Colombia and Indonesia continue to increase, but imports from both Venezuela and Canada have declined. Several east coast ports are in the process of increasing their capacity to receive imported coal, indicating that over time imports will continue on an upward path. - 21 -
Page 1 and 2: COAL INDUSTRY ADVISORY BOARD Intern
Page 3 and 4: Author’s Note: The report has bee
Page 5 and 6: 1 HIGH LEVEL MESSAGES 1.1 CIAB Poli
Page 7 and 8: commercialisation process; • saw
Page 9 and 10: 33. Many companies have announced p
Page 11 and 12: 2 CIAB WORK PROGRAMME 42. During th
Page 13 and 14: November 2006, and Andy Lloyd’s r
Page 15 and 16: 3 OVERVIEW OF WORLD COAL MARKET DEV
Page 17 and 18: are 3 million and 2.5 million tonne
Page 19 and 20: 90. For the USA, the IEA estimates
Page 21 and 22: 103. According to preliminary EIA e
Page 23: of steel increased by 19% in 2006 a
Page 27 and 28: however, were also 17% lower. 144.
Page 29 and 30: 70.00 Chart 4 - Capesize Coal Freig
Page 31 and 32: © OECD/IEA, 2007 165. Australian c
Page 33 and 34: 140 Chart 7 - MCIS Steam Coal Marke
Page 35 and 36: 4 ISSUES RELATED TO COAL 4.1 Sustai
Page 37 and 38: 196. States are taking independent
Page 39 and 40: New Zealand 211. A comprehensive re
Page 41 and 42: which combines sustainable developm
Page 43 and 44: power stations. 235. The European C
Page 45 and 46: also able to transfer its rights to
Page 47 and 48: collaborators. • The CO2CRC Otway
Page 49 and 50: Australia 267. The Australian Gover
Page 51 and 52: Japan 279. Power station operations
Page 53 and 54: • Fortune Minerals Limited applie
Page 55 and 56: • Mbokodo Mining (Pty) Ltd 0.50Mt
Page 57 and 58: 4.3 Developments in Clean Coal/Near
Page 59 and 60: 322. A 250MW air-blown IGCC demonst
Page 61 and 62: Turkey 338. In cooperation with uni

CIAB Market & Policy developments 2005/06 - IEA

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