ACB News, June 21 — According to the latest global demand report on thermal coal from Australia, cited by the Minerals Council of Australia (MCA), Asia’s demand for thermal coal is set to grow strongly over the next decade. Australia’s world-class coal mining industry can create more jobs for Australia and strengthen the nation’s economy by meeting the needs of Asian markets.

According to a recent report on the outlook for Australia’s thermal coal demand released by Commodity Insight, an Australian industry expert analysis firm, demand for thermal coal from existing and emerging Asian export markets is expected to remain robust from now through 2030.

Asia sees robust demand growth, with annual demand expected to exceed 1.1 billion tons.

The report reveals that, driven by industrialization and urbanization, electricity demand in Southeast Asia and India is experiencing robust growth. Coupled with the adoption of high-efficiency, low-emission (HELE) coal technologies and the steady population growth in Asia, coal demand in the region is set to continue rising. By 2030, Asia’s annual import demand for thermal coal is projected to increase by more than 400 million tons—rising from 740 million tons in 2017 to 1.147 billion tons in 2030. This figure is twice Australia’s total thermal coal exports in 2017 (200 million tons).

The report forecasts that most of the demand growth will come from existing export markets for high-quality coal from Australia, including Japan, China, Taiwan, and South Korea, as well as emerging markets such as Vietnam, the Philippines, and Thailand.

According to the Minerals Council of Australia, between 2017 and 2030, demand growth will be evenly distributed across the Asian region; all countries except Japan will increase their coal imports, while China’s demand growth will be relatively moderate.

In most parts of Southeast Asia, the increasing share of coal in the power generation mix will help countries in the region diversify their power sources beyond natural gas and hydropower. Import volumes to the Indian market are also set to rise, as domestic production is expected to fall short of growing demand—particularly for coal-fired power plants located far from major domestic power-generation centers. Moreover, given Indonesia’s plans to deploy substantial new coal-fired capacity over the next decade, the domestic supply of thermal coal could tighten, potentially prompting Indonesia to significantly reduce its coal exports in order to meet domestic demand.

Australia's thermal coal advantages are prominent, but the challenges cannot be ignored.

Greg Evans, Executive Director of the Minerals Council of Australia, pointed out that Australian coal, with its high-quality advantages, is an ideal choice for meeting the growing demand in Asia. These advantages are primarily reflected in the fact that, compared to lower-quality coal from other exporters, Australian thermal coal can reduce emissions and offers a stable supply. Additionally, due to its geographical proximity to key export markets, Australia also benefits from relatively higher availability of infrastructure.

The report also highlighted the challenges facing Australia’s coal industry, including the need to promptly increase mineral exploration efforts and expand infrastructure—particularly railways—to ensure that it can meet the growing market demand from the Asian region.

Meanwhile, the approval process for new mines is lengthy and costly, involving numerous stakeholders and governments at all levels. The report points out that the number of “red-and-green tapes” (bureaucratic red tape and protracted approval processes) is extremely heavy, and it may be difficult to maintain balance across different jurisdictions.

Mr. Evans stated that a favorable policy environment will undoubtedly help the coal industry develop, enabling it to meet overseas market demand while delivering sustained benefits to Australian citizens. For example, taxpayers in New South Wales and Queensland can reap substantial royalty payments from this development.

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