Industry archive · Originally published: 2019-12-20. This archived article does not reflect current market conditions or policy.
Australia has a land area of 7.68 million square kilometres and stretches about 4000 kilometres from east to west. Rich in mineral resources, it is sometimes called a country sitting on a mine cart. Coal and iron ore (466, 4.00, 0.87%) are key minerals. According to the Australian Bureau of Agricultural and Resource Economics, identified coal resources total 76.2 billion tonnes, ranking fourth worldwide.
Australia has a full range of coal types, including anthracite, semi-anthracite, bituminous, sub-bituminous and lignite. Much is mined in open pits, with relatively low sulphur and ash content. Almost all coal mines are concentrated in Queensland and New South Wales in the east, which together account for 98% of national coal output.
Coal supply is concentrated among Australia’s ten largest producers. Glencore, BHP, Yancoal Australia, Peabody and Anglo American together account for almost 80% of supply. This high concentration creates a market dominated by a small number of major producers.
Most Australian coal is exported, with only a small portion used domestically for power generation and steelmaking. Although its production ranks fifth globally, Australia ranks second in seaborne coal exports, after Indonesia, and leads metallurgical coal exports by a wide margin. According to the International Coal Association data cited in this archive, Australia exported 173 million tonnes of metallurgical coal in 2017, or 58% of the global total. Japan, India, South Korea and China were its principal destinations.
According to Australia’s Department of Industry, Science and Resources, 19% of its metallurgical coal exports went to China in 2017, a high for nearly four years. This was linked to recovering Chinese steel industry profits and stronger demand for premium hard coking coal with low sulphur and ash. China’s average import price for such coal reached USD 189.4 per tonne that year.