Twelve months have now passed since I took over this column and you will, I hope, indulge me a moment to look back over the year and the course the coal industry has chartered through it.
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The major story of 2010 continued to be the growth of coal demand in Asia, and China in particular. This year, China became the world’s second largest economy and its growth looks set to continue. Coal remains the foundation of this growth and Chinese demand for the fuel will grow – demand that will increasingly exceed production. A recent research paper from Citigroup estimates this year’s total imports at 143 million t, rising to over 200 million t next year. While this may end up being on the high side (many analysts would place these figures lower), it serves to illustrate just what an influence China will have on global coal trade.
On the flip side, demand in Europe and the US has remained flat this year as political and economic uncertainty prevailed. Following the US midterm elections, any potential for climate change legislation seems dead, but this does not rule out increasing regulation by the Environmental Protection Agency. The impact of shale gas on the coal industry is also a story that will rumble on. Meanwhile, Europe will continue with its addiction to imported gas and subsidised renewables.
Generally, however, this year has been a brighter one for the coal industry, following the financial crisis of the previous year. And with Asia driving demand, it looks like this trend will continue into 2011.
As a final thought, this year has also been marked by a number of accidents that have seen many coal miners lose their lives. From the UBB mine disaster in West Virginia to the recent tragedy at Pike River Coal in New Zealand, we are reminded that safe return from the mine is not to be taken for granted. As our lights burn brightly this festive season, perhaps we should all raise a toast to the brave miners who help keep those lights on.