In 2021, an estimated 24% of the thermal coal sold on the international market will be sourced from the top five-exporting companies. Glencore is set to continue as the dominant exporter supplying an estimated 80.2Mt to the market on an equity basis from operations in 26 mines in 21 mining complexes in Australia, South Africa and Colombia.

Russian miner SUEK is forecast to retain its position as the second-largest exporter of thermal coal in 2021, with shipments anticipated to total 47.7Mt. Indonesia’s PT Bumi Resources is next, forecast to account for 35.7Mt.

PT Adaro Energy and Yancoal Australia are anticipated to be the fourth and fifth largest exporters of thermal coal in 2021, with sales of and 34.8Mt and 33.7Mt respectively . These relative rankings are forecast to remain largely unchanged in the short term to 2022. 

Glencore’s overall supply growth beyond 2022 will in part be impaired by the under-performance of its Colombian assets.  The company closed its Prodeco mines, Calenturitas and La Jagua in March 2020, due to the weakness in the Atlantic coal market, exacerbated by the impact of COVID-19.  The company sought permission from the Colombian government to curtail operations for up to four years, but this was refused.  In 2021 Prodeco commenced a process of handing its mining contracts back to the Colombian government, after Prodeco concluded these operations were uneconomic to re-commence.

Glencore’s other trouble plagued operation is at the Cerrejon mining complex.  Supply was impacted when mine workers went on strike in 2020.  The mine, which is equally owned by Glencore, BHP and Anglo American, exported just 9.5Mt in the first six months of 2020, down 3.8Mt from a year earlier and the lowest figure for a six-month period in 18 years. The Cerrejon mine is currently exporting more regular volumes to Europe and is expected to mostly fulfill previous obligations.

In the medium term, the top five exporters are each anticipated to increase sales to the international market. By 2025, Glencore will still be the largest exporter with exports forecast to grow to 86.5Mt, accounting for 8.8% of the international market. 

Looking at the long term to 2040, the top five-exporting companies (not including potential Galilee Basin coal mine developments) are forecast to account for less than 13% of thermal coal sold on the international market, as smaller mining houses develop projects at a faster rate than the major producers can increase tonnages.

Glencore is forecast to hold its ranking as the largest thermal coal supplier with production of 49.3Mt in 2040, which represents a 61% reduction compared to 80.2Mt forecast for 2021.  This is largely due to the potential exhaustion of reserves at the company’s Australian operations.  For example, Glencore’s Clermont and Mangoola coal mines in Australia are expected to reach their mine life in 2027 and 2030, respectively.

The Clermont open cut mine is considered to be the most profitable thermal coal operation in Queensland, Australia producing up to 13Mtpa of mid-energy, low ash product for sale to the export market.  The mine currently has only 114Mt of reserves remaining. If further reserves are not defined, the mine's closure would have a material impact on Glencore's exposure to the international thermal coal market.

Mangoola open cut mine has long been regarded as one of Australia’s major coal mines, producing 11Mtpa for both the export and domestic markets.  In 2021 the government granted the mine approval to expand operations which will enable mining to continue for a further five years to 2030.

Indonesia’s PT Adaro Energy and PT Bumi Resource, and Russian miner SUEK will become next three largest thermal coal suppliers behind Glencore in the long term, with production of 34.8Mt, 32.9Mt and 32.1Mt in 2040 on an equity basis, respectively.

A potential upside in future company supply is the development of the Galilee Basin in Queensland, Australia. The greenfields coal projects in the region represent well over 150Mtpa of export thermal coal development potential for several mining companies. With billions of dollars of rail infrastructure construction required, these projects have been continually deferred awaiting a clear demonstration of firm demand requirements from emerging Asia.  Early 2021 has seen global demand for thermal coal rebound sharply, particularly from Asian importers, which is likely to incentives new project start-ups in the region.

The final State and Federal Government approvals for the Barvus Carmichael thermal coal mine also potentially opens the Galilee Basin to multiple mining companies which are waiting for final approvals.  As the first mine in the basin it provides both a precedent and rail infrastructure making other coal project much more viable.

Six coal mine projects other than the Carmichael mine are currently planned for the region.The mines and their companies lining up behind Barvus in the Galilee Basin include:

• Alpha Coal Project - GVK Group/Hancock
• Alpha North Coal Mine Project - Waratah Coal
• Galilee Coal Project - Waratah Coal
• China Stone Coal Project - MacMines Austasia
• Kevin's Corner Project - GVK Group/Hancock
• South Galilee Coal Project - AMCI (Alpha)