Coal is going through one of its most tumultuous periods of the past decade…but despite current low market prices, an oversupply of coal on the market, and heightened environmental opposition, you don’t get rid of the Canadian coal industry that easily.
Photo above: A bird’s eye-view of Westshore Terminals, Canada’s busiest export coal terminal. Photo by Dave Roels (www.daveroels.com)
For starters, coal is the largest single commodity handled by Port Metro Vancouver at about 40 million tonnes a year (with likely another record total tonnage in 2014), and brings in billions of dollars in revenues for Canada. The industry has started to seriously clean up its act by reducing emissions and incidents of coal dusting, and over 40 per cent of the world (that’s a few billion people by the way) rely on this type of coal for their electricity generation. That’s not to consider the billion people who would love to have electricity of any sort to help to overcome their current energy poverty and despair.
And last time I looked, steelmaking coal, which makes up the bulk of Vancouver shipments, is still in demand for the likes of vehicles, construction, appliances, and even those save-the-planet steel wind turbines.
Prices for both steelmaking (metallurgical) and energy coal (thermal) hit multi-year lows in 2014 and the experts say there’ll be more flat-lining of coal prices in 2015 before a hoped-for recovery, likely “still a few years out.” Growth by China, one of the major buyers, is expected to be slower and that’s not encouraging news for the industry, although India is likely to step up its demand.
The depressed prices have been enough to discourage the opening or shut down production at some northeast British Columbia coal mines for the time being, at least, as well as similar reported curtailments in Australia and elsewhere.
Despite all of these gyrations in what has always been a highly cyclical industry, coal in Canada is remarkably healthy and won’t be disappearing anytime soon.