Thermal coal prices reach a decade high as demand for high-quality Australian coal remains strong.

From post-COVID-19 lows of $US50/tonne, spot prices for high quality Australian thermal coal (6,000 kcal/kg) have climbed back above $US122/tonne, the highest prices seen for the commodity in almost a decade. The driver for the price increase has been strong demand from Asia, the main buyers of high-grade Australian thermal coal, amid supply constraints from thermal coal exporters across the world.

As Beijing’s unofficial ban on Australian coal imports continues to be in effect, prices for 5,500 kcal/kg grade thermal coal have also increased to $US70.26/tonne in June – about double August’s $35.62 – as India emerges as a key buyer of Australia’s mid-grade coal in China’s absence.

For years now we have been talking about the growing demand in Asia for thermal coal in order to provide safe, affordable and reliable baseload power, as renewable generation also increases. According to the United Nations, India’s population will grow by 287 million people between 2018 and 2050, and by 2025 one-fifth of the world’s working population will be India. That population growth means there will be a growing need for affordable energy.

When it is operational, the Carmichael Project will provide high-quality Australian coal for baseload electricity generation that supports India’s advancement, social progress and energy security. With that national drive and ambition comes opportunities for countries like Australia to help India deliver new products, infrastructure, resources and improved living standards for its people, while also creating a growth catalyst for our own national economy.

As the world’s number one international solar company and India’s largest private electricity generator, Bravus’ parent company, the Adani Group, has a unique view of the market and we see there will be a need for both coal and renewables in the energy mix to meet growing energy demand in Asia as people there emerge from poverty. As renewable technology improves there is no doubt that it will supply more energy, however, this will take significant time as thermal power stations won’t be retired until they reach the end of their lives which is decades away. That is why we are committed to both coal and renewables. It is important to address the realities of climate change, and we are demonstrating on a daily basis that this can be done in a measured way that involves both renewables and high-quality thermal coal, while also improving the lives of people living in energy poverty, and ensuring our own nation is well-positioned to capitalise on opportunities in the process.
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