Categories: Business

Australian coal industry earns a fortune as prices soar amidst the surge in demand

The existing coal companies have been ramping up their operations to meet the demand, while the introduction of new mines, such as Kevin’s Corner coal mine and Adani Group Australia’s Carmichael mine in Queensland, Mangoola coal mine in New Castle, among others, will only add to the production capabilities of the sector.

The coal industry has been earning a fortune in recent times with an increased demand witnessed due to a rise in the power consumption across the world. Australian coal sector has been at the forefront of soaring coal prices, with shipments of thermal coal leaving the Newcastle at five times worth compared to the last year. It is an indication of the huge sums coal companies are making in the country, which is helping the economy to bounce back after a devastating year and a half.

In 2020, the Newcastle coal price had trickled below $50 per tonne, which caused a disruption of sorts in the industry. However, the prices have only surged since then, sitting at $230 per tonne this month. The experts say that the prices have never been this high, not even during the mining boom in 2008 when coal was priced at $200 per tonne.

At this juncture, the question is whether Australian coal industry can sustain this growth trajectory? The answer to this question lies in the recent developments happening in the sector across the country. While the existing coal companies have been ramping up their operations to meet the demand, the introduction of new mines, such as Kevin’s corner coal mine and Adani Group Australia’s Carmichael mine in Queensland, Mangoola coal mine in New Castle, among others, will only add to the production capabilities of the sector.

Countries like China and India have recently witnessed shortage of coal supply and an unprecedented increase in the power consumption. The situation has triggered fears about long shutdowns with coal-fired power plants running dry. It is also a testament to the fact how vulnerable renewable alternatives are at the moment.

The recent developments have further reinstated that the contribution of coal industry cannot be undermined and the sector will continue to play a vital role in the economic progress of the nations. The transition to make renewable energy a viable alternative for coal is likely to take decades and till then, any disruption to the existing operations could prove to be costly and must be avoided for a greater good.

Srinivasan Vedam

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