In addition to being essential to the production of steel, coal is the world’s most widely used source of energy for power generation.
It provides about 25% of the world’s primary energy needs and generates approximately 39% of the world’s electricity.
The World Energy Outlook 2008, states that world energy demand is expected to expand by 45% between now and 2030, an average rate of increase of 1.6% per year, with coal accounting for more than a third of the overall increase. Expanding economies worldwide, led by China and India, are driving the increased demand for power.
US demand for steam coal is expected to return toward accelerated demand in 2010 as states continue to industrialize and boost standards of living. The long term outlook for coal consumption in the U.S. indicates a healthy growth of 14% between 2008 and 2030. The fundamental drivers for steam coal demand in the US are electricity generation and the increasing cost for imported oil.
Since 1977 China’s GDP has grown at an average annual rate of 9.4%. Despite significant economic downturn around the world in the fourth quarter of 2008, China’s economy managed to expand by 6.8%. According to the IMF and World Bank, China is predicted to grow just under 7% in 2009, and reach close to 10% in 2010. Coal remains a corner stone of the Chinese economy and consumption is estimated to increase from 2.7 billion tonnes in 2008 to 4.2 billion tonnes in 2030, a 54% increase.
