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Interview: Chris Walker, Sales, Marketing and Logistics Manager, Bengalla Mine

Chris discusses coal demand from Asian economies, the advantages of Australian coal for thermal power producers and coal imports in China and India.


Coaltrans Conferences (CC): Over the past few years there has been a lot of negativity about the long-term future of coal-fired power generation. Do you feel confident about continued coal demand from Asian economies?

Chris Walker (CW): The World Coal Association has spent significant time and energy (excuse the pun) to understand the long term view on coal.  Their assessment is the use of coal for power generation is forecast to rise by 23% by 2040 even though its share of the total market would decline from its current 41% to 30%.

(CC): What are the advantages of Australian coal for thermal power producers?

(CW): Australian coal is higher in energy, low in impurities and is consistent in quality when compared to its natural competitors.  Further, there has been a long and continuous investment in infrastructure – port, rail and ancillary mining infrastructure – that provides certainty of delivery for buyers of Australian coal.

(CC): Are you concerned about competition to coal from LNG, particularly as new sources in Australia and the US come online?

(CW): Coal still holds a cost advantage over other forms of raw energy inputs, and should therefore be a consideration for the energy mix of emerging Asian nations.

(CC): Investment into coal mining facilities has massively fallen off during the downswing. How easily do you think that the market can respond to tightness now that prices are rising?

(CW): There is still a reluctance by major banking institutions to invest in mining assets in Australia, despite the recent spike in the international coal prices. Finance is available through alternate finance markets, but comes at a higher cost.  Until sustained higher prices are achieved, then investment will be minimal in Australia.

Coal imports in two key Asian markets – China and India – look increasingly uncertain. What impact is this having on miners?

(CW):  India’s targets to reduce thermal coal imports appear optimistic, and Chinese regulators are balancing the closure of uneconomical mines against meeting the energy needs of their nation. The majority of Australian thermal coal mines remain cost competitive against Chinese local production on a delivered energy basis.  Hence, we’re confident there will still be a need for thermal coal imports in these countries.

To learn more about how the coal markets are evolving, join us at the 15th Coaltrans China in Shanghai in April.

Content provided in November 2016.

This content is provided by Coaltrans Conferences for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.