International coal trade

In 2012, international coal trade grew by 11% to 1 258 million tonnes or 18.2% of world hard coal production which reached 6 926 million tonnes – there is little international trade in lignite. Of this, 1 082 million tonnes were transported across the oceans, being the seaborne coal trade. This data shows that coal is mainly used in the vicinity of deposits.

Global coal and lignite production and international coal trade, 1980 to 2012 (IEA, 2013)

However, coal from mines with low production costs and good transport links to sea ports can be delivered competitively to overseas consumers. Since the oil crises of the 1970s, the growth in global coal trade has allowed the world to shift away from an overreliance on oil to the extent that oil is now rarely used for power generation.

Seaborne trade can be further divided into coking coal trade and steam coal trade. In 2012, seaborne
steam coal trade grew to 826 million tonnes, with a further 256 million tonnes of coking coal. Overland cross-border deliveries added an estimated 120 million tonnes to international coal trade.

The market for steam coal can be subdivided into Pacific and Atlantic markets, each with different supply patterns. By contrast, the coking coal market is a more uniform world market, reflecting the small number of supply countries: principally Australia, the USA and Canada, but with strong growth potential in the new entrants Mongolia and Mozambique.

Important exporting countries for hard coal are Indonesia, Australia, Russia, the United States, Colombia and South Africa, who together accounted for around 87% of all coal exports in 2012. Resource nationalism – normally associated with oil and gas exploitation – is creeping into the coal industry. Indonesia will ban the export of low quality coal from 2014. In South Africa, the ruling ANC party has made proposals ranging from nationalisation of the coal mining industry to greater black economic empowerment and from a rent tax to export tariffs. South Africa, like Indonesia, wants to secure coal for domestic power generation and avoid the premature depletion of its reserves by coal-hungry China.

Seaborne trade flows on the international hard coal market, 2012 (VDKi, 2013)

The top coal importing countries are China, Japan, India, South Korea, Taiwan, Germany, the UK, Russia, Turkey, Italy and Spain, together accounting for 80% of coal trade. India’s coal imports are growing quickly, helped by a government decision in 2012 to temporarily remove coal import duties. India will likely overtake Japan to become the world’s second largest coal importing country.

International coal trade, 1980 to 2012 (IEA, 2013)

Imported hard coal makes a significant contribution to the EU’s security of energy supply and offers a competitive fuel which can be easily and safely transported and stocked. In 2012, 17% of all coal exports were destined for EU member states. Leading exporters to the EU are Russia, Colombia, the United States, Australia, South Africa and Indonesia.

See Coal industry across Europe for more on coal markets.