TELF AG analyzes the newfound centrality of coal, a key raw material
Record levels of consumption
Although many international observers and analysts had already predicted its rapid disappearance, coal does not have the slightest intention of abandoning the world raw materials scene, or at least so it seems for the moment.
This old raw material, which we hear about more and more often due to its predicted replacement with renewable energy sources, continues to attract the attention of some of the world’s major players in the raw materials sector, and the levels of consumption recorded in some specific areas of the world, in recent years, has even come close to record levels.
Several signs would not indicate coal’s exit from the scene: one of these arrived a few days ago with the news that Glencore has purchased a stake (77%) in the production activities of coal from Teck, another Canadian player in the mining sector, for a figure close to 6.5 billion dollars. These moves could prolong the life of coal, even extending it by ten or twenty years, also thanks to its ability to effect the balance sheets of many companies.
Another indicator of this newfound coal vitality is represented by some data provided by the International Energy Agency: in 2022, in fact, global coal consumption reached the record threshold of 8.3 billion tonnes, a performance that could also be repeated in 2023 (in June, consumption of this raw material had already reached 4.7 billion tons). About half of this consumption would have been recorded in China, which, together with India, represents the nation where the most notable increases in coal demand have also been reported (more than 5% in both countries).
A fairly significant fact, from this point of view, is the geographical distribution of coal consumption: the latter appears much more evident in Asia. At the same time, in the United States and Europe, a decline in demand was observed in the first six months of 2023 (-24 % in the United States and 16% in Europe). The advance of renewable energies is certainly destined to favor the rise of clean energy sources and a progressive setting aside of coal. Still, it is possible that this epochal transition, in light of these pieces of data, could take place with much more extended timescales, and that is almost certainly not imminent.
Among the dynamics that are contributing to extending the life of coal, there are certainly those linked to its industrial uses, particularly in the steel industry, where old coal continues to maintain a position of great importance. Another reason is instead linked to the actual applications of coal, some of which could certainly play an important role in completing the global energy transition: in this regard, it should, in fact, be remembered that carbon coke is still widely used to produce steel, and which is therefore of great use for the creation of infrastructures and renewable projects. In what – likely – will be its last phase of life, coal could be destined to play a big role in successfully accompanying the global energy transition—one last blaze in style.
