Global coal output is set to recover by 3.5 percent to 8 billion tones of coal in 2021 - Photo by Renuka Coalindo

JAKARTA (TheInsiderStories) – Global coal output is set to recover by 3.5 percent to 8 billion tones of coal in 2021, according to GlobalData report. Last year, the production is estimated to declined by 2 percent in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions observed in the United Staes (23.6 percent), Indonesia (13.1 percent), Russia (8.1 percent), and Australia (5.5 percent), according to GlobalData report.

These were only partially offset by increases in China (4 percent) and India (0.7 percent), wrote the agency. Additionally, during the last year, there was an estimated 3.5 percent reduction in the global thermal coal demand, while the world’s metallurgical coal demand fell by 5.9 percent.

With the United States coal industry already challenged by high production costs and low natural gas prices, the country’ output was severely impacted by the COVID-19 pandemic, with key companies halting their operations as part of preventive measures. Additionally, a decline in domestic demand as well as export market demand affected output from Indonesia and Russia.

Global coal production is expected to grow at a compound annual growth rate (CAGR) of 2.3 percent between 2021 and 2025 to reach 8.8 billion tones of coal in 2025. While thermal coal production is expected to have a relatively marginal 2 percent CAGR to reach 7,549.6 million tones (MT) of coal, metallurgical coal is forecast to register stronger growth of 4.2 percent per year, to reach 1,216.9 MT in 2025.

Vinneth Bajaj, from GlobalData, comments: “India will be the largest contributor to this growth. Its production is expected to increase from 777.7 MT in 2020 to 1.2BT of coal in 2025. This will be followed by China, Indonesia, Australia and South Africa, whose combined production is expected to increase from an estimated 5BT in 2021 to 5.43BT of coal in 2025.”

He continued, other countries that are anticipated to bounce back strongly during 2021 include the United States (9.3 percent) and Russia (8.4 percent). In contrast, production from Australia is expected to decline by around 4 percent in 2021, mainly because of concerns over the future of China – Australia trade.

Looking ahead, 2.5 percent growth is expected in China in 2021, supported by the commencement of projects including Dahaize and Xinjiang Zhundongs. In addition, India, which, after flagging coal as an essential commodity, reported 0.7% growth in 2020, is expected to deliver 9 percent growth in output to reach 827.8 MT of coal 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 (62.5MT of coal at full capacity) in Chhattisgarh, and Rajmahal (24 MT of coal) and Lakhanpur (21 MT of coal) in Jharkhand.

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