Coal Mining at Crossroads

Ever since the dawn of the industrial revolution, coal has remained an indispensable ingredient for modern transport and infrastructure. The building blocks of our modern world; glass, cement, steel and aluminium are energy intensive to produce, and coal powers their production.

Being commercially mined in over 50 countries, coal is still the most abundant, accessible, and affordable source of energy. Coal though has one downside, burning it produces more pollutants than other fuels.

The Predicament

At the beginning of the century, with the climate change issues gaining ground, the developed countries started slowly distancing themselves from coal in their energy mix.

This fall in demand by industrialised nations was offset by developing countries in Asia led by China and India who began rapid industrialisation around the same time.

Most of the countries with surplus coal like, Indonesia, Australia and Russia exported coal to these destinations. Things were fine for some time, until now.

Let us turn our attention to the present day.

Glencore, the world’s largest exporter of thermal coal is considering closing some of its South African mines and laying off workers due to falling prices and deteriorating market conditions.

Glencore and possibly many others are contemplating closing the coal mines temporarily until things turn the tide in the market. This has put the jobs in coal mining in jeopardy.

These turn of events is because, all along, the supply side has continued to increase while the demand driven mainly by China is slowing down, thanks to the new trade targets, a kind of import restrictions.

China accounts for half of global coal consumption and a third of seaborne trade. Slowing of electricity demand and rising alternative sources of power are cutting into coal’s dominance in the country.

Coupled with this issue are the tougher environmental standards and shrinking demands, which have led to the closing of mines across China and sent coal prices to their lowest in 6 years. By the year 2020, China is planning to cut coal consumption by 10% from its present 70%.

This has led to a drop in the import of thermal coal and coking coal by 15% and 17% respectively and the trend doesn’t show any signs of reversal.

The Road Ahead

Coal as a fuel cannot be substituted completely with other sources of energy as yet in an affordable way. This calls for a serious contemplation of the plans to cut on coal.

So, the future of coal depends on the technology and innovation in increasing the efficiency of coal plants.

For instance, a report by World Coal Association reveals that by raising the global average efficiency of coal plants from 34% to 40% with technology would save 2 Gigatonnes of CO2. This is more than the total CO2 emissions of India, the third largest CO2 emitter in the world.

Now is the time to increase the efficiency of coal mining and coal plants. Cutting edge technology in the form of all-encompassing software that dynamically interacts with all entities to coordinate tasks would help efficiency and help the future of coal mining.