Coal production to top 8bn tonnes in 2020

A 7.8% fall in production in the US will be a major factor in the overall limited output, the company says, noting that this will be offset by an increase in production from India (8.3%), Indonesia (5%) and Russia (3%), as coal mines in those countries continued to operate during Covid-19-related lockdowns.

Coal mines were allowed to operate owing to being assigned “essential” status by governments during the lockdown and restrictive periods.

GlobalData senior mining analyst Vinneth Bajaj says disruption in the first quarter of this yearwas “most significant in China”, but he says that owing to the virus being well contained from the beginning of the second quarter, China reported a marginal 0.9% year-on-year growth for the first five months of the year.

However, overall production in China is expected to decline by 1.2% for the full year as China heads towards the closure of small mines, with capacities of under 600 000 t, by the end of the year.

Meanwhile, the auction of coal mines in India to the private sector is expected to drastically boost the country’s supply, which is forecast to rise by 8.5% this year.

Production will be supported by increased production by South Eastern Coalfields and Mahanadi Coalfields, as they recover from the impacts of the severe monsoon and labour strikes in 2019, GlobalData says.

“Over the next four years, global coal production is expected to grow at a compound annual growth rate of 2.2% to reach 8.9-billion tonnes by 2024, [owing] to increasing supply from India (6.1%) and China (2.3%),” Bajaj continues.

Moreover, on June 19, the Indian government also announced plans to auction 41 coal blocks to the private sector, which GlobalData says “will further boost the country’s production during the aforementioned period”.