Contacts:
Ryan Driskell Tate, +1-763-221-3313, [email protected]
Caitlin Swalec, +1-207-356-5056, [email protected]
Coking Coal Projects Stir False Hope in US and Canada
North American coal producers plan to sink $4.8 billion USD into 15 new mines for export to Asian steel markets — a play that risks stranded assets and broken promises on 4,000 jobs
SAN FRANCISCO, CA – After rosy forecasts of capacity-building in the steel industry, and a recent spike in metallurgical coal prices, coal producers in the United States and Canada are planning to sink $4.8 billion USD into 15 new coal mines for steel and industrial consumers, according to new research from Global Energy Monitor.
These metallurgical coal projects amount to 38 million tonnes of new annual capacity and come with promises of 4,000 new mining jobs. Yet volatility in the coal export market, fast approaching net-zero targets, and decarbonization policies in domestic and import markets make these projects vulnerable to economic and regulatory stranding.
The new capacity is primarily intended for export to the Asia Pacific region, but consumers in China, South Korea, Japan, and India are unlikely to absorb this excess metallurgical coal capacity. Together, the US and Canada exported only 34 million tonnes to these four countries in 2020, meaning demand would need to rally 112% to make up for the new supply.
The global steel industry faces mounting international pressure to shift gears from coal-based steelmaking to electric steelmaking, with governments, steel producers, and major steel consumers committing to net-zero targets or slashing emissions. Nevertheless, Canada is proposing 11 new projects (28 mtpa) and the United States is proposing 4 new projects (10 mtpa).
Ryan Driskell Tate, a coal research analyst at Global Energy Monitor and co-author of the briefing said, “The coal industry is on its last legs and is gambling that met coal can keep it standing. It’s a bad bet because the industry would need to boost exports to China, India, South Korea, and Japan by 112% percent each year to justify these new projects.”
Caitlin Swalec, a steel research analyst at Global Energy Monitor and co-author of the briefing said, “A year ago, we were still asking if we could make steel without metallurgical coal. This year, we’ve made it. The pressure for the global steel industry to reduce emissions and step away from met coal is only rising. The smart players are investing in clean, coal-free steel tech.”
Global Energy Monitor surveys operating and proposed mines and crude steel plants around the world with their Global Coal Mine Tracker and Global Steel Plant Tracker.
###
Global Energy Monitor (GEM) develops and shares information on fossil fuel projects in support of the worldwide movement for clean energy. Current projects include the Global Coal Plant Tracker, the Global Coal Mine Tracker, the Global Steel Plant Tracker, the Global Fossil Infrastructure Tracker, the Europe Gas Tracker, the CoalWire newsletter, and the GEM wiki. For more information, visit www.globalenergymonitor.org