Looking beyond the issue of coal reserves, a number
of the key indicators within the coal industry have
shown significant change over the past three years.
Ownership of coal-producing enterprises has changed
significantly. On one level, the trend which had just
commenced in the second half of the last decade the
withdrawal of the oil majors from the strategic coal
production investments undertaken in the wake of the
oil shocks of the 1970s turned into a flood of disposals.
Very limited coal-producing assets remained in the hands
of oil companies by the end of 2000. Of those assets
remaining, most have been on the market, with the special
circumstances of the individual assets being the primary
reason for the failure to conclude this chapter in the
history of coal in the hands of oil companies.
In addition to the departure of the oil majors from
coal production, industry concentration has been pursued
by a number of the major coal-producing companies. A
number of global mining houses and global coal specialists
increased their coal portfolio, taking advantage of
the lower asset values reflecting the poor market returns
for coal over the last decade, and encouraging many
smaller operations to exit from the sector. Further
industry concentration is expected to continue within
the industry.
In the period since the 18th Survey, the most significant
production adjustment has occurred in China. In 1997
Chinese hard coal production was 1 268 Mt; however,
the 1999 Chinese output of hard coal was less than a
billion tonnes. This reduction in production reflects
the very significant restructuring being undertaken
within the Chinese coal industry. This has resulted
in a large number of small local pits being closed (estimated
to be in excess of 40 000 over the last two years)
but at the same time, China has developed new high-volume
open-cast coal operations to underpin both domestic
and export supplies for the future.
The USA continues to expand production now over 975
Mt per annum but with less tonnage being made available
to the export market. While tonnage traded bilaterally
between USA and Canada remains a function of logistical
advantage, USA seaborne coal exports have halved between
1996 and 2000, down to a new level of around 36 Mt.
This is a reminder that the1 USA remains a swing supplier
with the export tonnage made available when favourable
global market conditions prevail. In the later part
of 2000, demand for energy in the USA domestic market
had strengthened to such a level that coal spot prices
were significantly above long-term contract price trends.
This situation now raises questions over the future
USA market conditions for coal, given the USA capacity
to expand production if contract prices stimulate such
a response.
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