Global coal output is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions observed in the US (23.6%), Indonesia (13.1%), Russia (8.1%) and Australia (5.5%). These were only partially offset by increases in China (4%) and India (0.7%).
Additionally, during the last year, there was an estimated 3.5% reduction in the global thermal coal demand, while the world’s metallurgical coal demand fell by 5.9%. However, global coal production is set to recover by 3.5% to 8bnt in 2021, according to GlobalData, a leading data and analytics company.
Global coal production is expected to grow at a compound annual growth rate (CAGR) of 2.3% between 2021 and 2025 to reach 8.8 billion tonnes in 2025. While thermal coal production is expected to have a relatively marginal 2% CAGR to reach 7,549.6 million tonnes, metallurgical coal is forecast to register stronger growth of 4.2% per year, to reach 1,216.9 million tonnes in 2025.
Vinneth Bajaj, Associate Project Manager at GlobalData, said in the report, “India will be the largest contributor to this growth. Its production is expected to increase from 777.7 million tonnes in 2020 to 1.2 billion tonnes in 2025. This will be followed by China, Indonesia, Australia and South Africa, whose combined production is expected to increase from an estimated 5 billion tonnes in 2021 to 5.43 billion tonnes in 2025.
Other countries that are anticipated to bounce back strongly during 2021 include the US (9.3%) and Russia (8.4%). In contrast, production from Australia is expected to decline by around 4% in 2021, mainly because of concerns over the future of China-Australia trade.
India, which, after flagging coal as an essential commodity, reported 0.7% growth in 2020, is expected to deliver 9% growth in output to reach 827.8 million tonnes in 2021. The commercial auction of coal mines in India is expected to be a key production booster for the world’s second-largest coal producer. In early 2020, the Indian Government gave clearance to begin operations for 10 coal projects that included Kusmunda (62.5 million tonnes at full capacity) in Chhattisgarh, and Rajmahal (24 million tonnes) and Lakhanpur (21 million tonnes) in Jharkhand.