Damon Mcknight
Australia is one of the world's largest exporters of coal. In 2020–21, Australia was the largest exporter of metallurgical coal and the second-largest exporter of thermal coal. In 2021, Australia exported 68.6 million tonnes of coal to India, which accounted for 80% of India's coal imports. In 2022, Australia's coal exports decreased by 5% year-on-year to 340.1 million tonnes, mainly due to China's decision to source coal from alternative markets. Despite this, Australia remains a significant player in the global coal trade, with exports expected to increase in 2023 as the country mends relations with China.
| Characteristics | Values |
|---|---|
| Australia's rank in coal exports | 2nd largest exporter of thermal coal and largest exporter of metallurgical coal |
| Largest export destinations by volume | Japan, India, South Korea |
| Largest export destinations by value | India |
| Change in export volume (2021-2022) | +5.0% |
| Change in export value (2021-2023) | Not available |
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What You'll Learn
Australia is the world's largest exporter of metallurgical coal
The primary destinations for Australia's coal exports are Asian countries, including Japan, Korea, India, Taiwan, and Vietnam. In 2021, 80% of India's coal imports came from Australia, and Australia was the largest supplier of met coal to China before import restrictions were imposed that year. Australia's exports to China resumed in March 2023, with most of this being thermal coal.
Metallurgical coal is primarily used for steelmaking and other industrial processes, while thermal coal is used for electricity generation. Australia's black coal EDR is mainly located in Queensland and New South Wales, with smaller volumes in South Australia, Western Australia, and Tasmania.
As one of the world's largest coal exporters, Australia plays a significant role in global fossil carbon emissions. Coal is one of the most widely traded fossil fuels due to its durability and ease of transportation. It is extensively used in power generation and heavy industry due to its availability and low cost. However, burning coal produces large amounts of CO2 and other pollutants, making it incompatible with international climate goals.
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Australia is the second-largest exporter of thermal coal
In 2020-21, Australia was the world's largest exporter of metallurgical coal and the second-largest exporter of thermal coal. This is based on data from the Department of Industry, Science, and Resources. However, definitions vary between data sources. For instance, the International Energy Agency (IEA) data are reported as net energy content, while Australian Energy Statistics (AES) data are reported as gross energy content.
Australia has a significant presence in the global coal market. In the 2021-22 financial year, the value of Australian coal exports reached $112 billion, with export earnings from black coal totalling $113.8 billion. Australia exports a large share of coal, with 54% of its exports being thermal coal. The country's coal exports have grown at an average annual rate of 2.5%, from 302 Mt in 2011-12 to 363 Mt in 2020-21.
Australia's major coal export destinations include Japan, South Korea, Taiwan, India, and other countries. In 2021, 80% of India's coal imports came from Australia. Australia's exports to Japan have historically been significant, with around half of its coal exports going to Japan in the late 1980s. The ratio of thermal coal exported to Asia has also increased significantly since the 1980s.
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In 2021, 80% of India's coal imports came from Australia
Australia is the world's largest exporter of metallurgical coal and the second-largest exporter of thermal coal. It has the world's third-largest coal reserves, with 75,433 million tonnes of black coal and 74,039 million tonnes of brown coal as of December 2021.
In 2021, India was the second-largest importer of coal in the world, after China. India's coal imports rebounded in 2021, with Australia winning a significant market share. In January 2021, India imported 6.75 million tonnes of coal from Australia, a record high, and 81% more than in January 2020. This was a cumulative increase over the previous four months, making it the strongest period for Indian imports of Australian coal since Refinitiv started assessments in January 2015.
Historically, India has imported coking coal from Australia due to its limited domestic reserves of this higher-energy grade. However, in recent years, India has started importing increasing volumes of thermal coal from Australia. In December 2020, Australia's thermal coal exports to India were 1.87 million tonnes, a 450% increase from December 2019. This shift in India's coal sources is likely a permanent dynamic, as China, the previous major importer of Australian coal, has placed an effective ban on coal imports from Australia.
While Australia has lost market share in some Asian countries, such as Japan, Vietnam, and Indonesia, it has gained a significant share in India. In the 2023-24 financial year, India consumed about 1.2 billion tonnes of coal, with domestic coal accounting for about 1 billion tonnes. Despite a decline in Australia's coal exports to India in 2023, the country remains a crucial importer of Australian coal, especially with its growing demand for electricity.
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Australia's coal exports to China have declined
Australia is the world's largest exporter of metallurgical coal and the second-largest exporter of thermal coal, with the country's coal resources being among the largest in the world. In 2019, Australia exported $13.7 billion worth of coal to China, with almost $10 billion of that being metallurgical coal. However, in 2020, China imposed an unofficial ban on coal imports from Australia.
Since the ban, Australia has successfully found alternative markets for its coal, particularly in India and the rest of Asia. In 2021, 80% of India's coal imports came from Australia, and the country is expected to remain a stable, long-term customer for Queensland coal. Australia has also increased its exports to Europe, with Europe's share of Australian coal increasing to 8% in 2022 from 4.6% in 2019.
In January 2023, China Energy Investment Corp placed an order to import Australian coal, signalling a potential lifting of the ban. This move comes as relations between Beijing and Canberra are improving, and as China is facing increased demand for coal due to higher power consumption following the easing of coronavirus-related restrictions. However, analysts suggest that any gains for Australian coal exporters in the Chinese market would likely be modest, as miners have largely redirected supplies elsewhere.
While China's resumption of Australian coal imports could ease coking coal prices, it may not significantly alter trade routes that have evolved following the unofficial ban. An official at a Chinese state-run utility noted that power plants in China typically consume coal with lower heating values, and that Australian thermal coal is more expensive and of better quality than what Chinese utilities usually require.
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Japan is the leading export destination for Australian thermal coal
Australia has abundant natural resources and is the world's largest exporter of metallurgical coal and the second-largest exporter of thermal coal. Coal is Australia's largest energy resource and one of the most widely traded fossil fuels. In 2021, Australia's recoverable Economic Demonstrated Resources (EDR) of coal were 75,433 million tonnes (Mt) of black coal and 74,039 Mt of brown coal.
In 2021, Australia's exports of coal remained relatively flat, with volumes of 358.2 million tonnes. However, in 2022, Australian coal exports declined by 5% year-on-year to 340.1 million tonnes. This decline was mainly due to China's choice of alternative markets for its coal needs. Despite this, Australia has been relatively successful in finding new markets, and its exports to India and South Korea increased significantly in 2021.
In 2023, Japan was the leading export destination for Australian thermal coal. Japan imported 119.4 million tonnes of Australian coal in 2022, an increase of 3.9% from 2021. This made Japan the top destination for Australian coal exports, surpassing other countries such as India and South Korea.
Japan's high demand for Australian thermal coal can be attributed to its energy needs and the reliability of Australian coal exports. Australia's proximity to Japan also makes it a favourable source of coal, reducing transportation costs and time. Additionally, Australia's high production capacity and the quality of its coal likely contribute to Japan's preference for Australian thermal coal.
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Frequently asked questions
Australia exports coal to many countries, including India, Japan, China, South Korea, and Indonesia.
In 2021, India was the largest importer of coal from Australia, with 68.6 million tonnes of coal imported. In 2023, India continued to be a leading market for Australian coal exports, with the value of metallurgical coal exported to India reaching around 16 billion Australian dollars.
No, Australia's coal exports have experienced fluctuations. In 2020, Australian coal exports fell by 7.8% compared to 2019. In 2021, exports remained relatively stable, with a slight increase of 0.1%. However, in 2022, Australian coal exports declined further by 5.0% to 340.1 million tonnes.
One significant factor is the decline in exports to China, previously Australia's largest customer. In 2021, coal exports from Australia to China dropped by 98.7% compared to the previous year due to political tensions. However, there has been a slight increase in exports to China in 2022 as relations improved.
Australia is a major player in the global coal market and has abundant natural resources. Despite a decline in exports in 2022, the overall seaborne coal trade is growing, and Australia's coal exports are expected to increase in the coming years due to new projects and investments.
