However, metallurgical coal projects are less likely to be affected by the clean energy transition in the short and medium term, due to slow growth in non-coal-based steel production from iron ore and hydrogen technologies not available at the scale and cost required.

There is lower interest in thermal coal projects due to their high risk and uncertainty related to climate goals and social opposition. Large coal companies are putting in efforts to adopt net zero strategies by selling or demerging their coal operations. Accordingly, companies and investors are focusing on development of metallurgical coal projects.

Currently, Australia has around 42 potential metallurgical coal development projects distributed along Queensland and New South Wales.

The World’s Concentrated Coal Mine Project Regions

Coal mine capacity is highly concentrated in the major coal producing countries around the world. Most proposed coal mine projects are in China, Australia, India, and Russia. Although China and India are part of this group, their coal production is used for domestic purposes.

In major coal exporting countries, new coal mine development projects are being carried out in existing producing regions. Most Australian coal developments are concentrated in Queensland, followed by New South Wales. Similarly, a major number of coal mine projects in Russia are in the coal Kuznetsk Basin in Kemerovo Oblast.

New mine project developments are also taking place in midsize producers such as South Africa, Indonesia, and Mozambique. The increase of coal production capacity could significantly increase the output in those countries.

The Major Exporter

Although Australia is recognised as the world’s largest metallurgical coal exporter, due to economic volatility of the Covid-19 pandemic and diplomatic disputes with China, Australia's hard coking coal exports fell to 170Mt in 2020, down by 8.6% compared to 2019. From 2021, due to China’s ban on Australian coal, the destination of Australian metallurgical coal exports changed significantly relying on seaborne trade with India, Japan, Korea and Europe for its exports.

Following this effort to fill the gap of China’s coal ban, Australian hard coking coal export volumes to India increased from 43.2Mt in 2020 to 52.7Mt in 2021. This represents an increase up by 22.1% in the last year. Hard coking exports to Japan also increased from 30.8Mt in 2020 to 39.7Mt in 2021, followed by South Korea with an Australian hard coking coal volume export of 17.3Mt in 2020 to 23.1Mt in 2021.

Valeria Coal Project

Valeria Coal owned by Glencore Coal Pty Ltd is aiming to develop its Valeria coal project. This project is a greenfield open-cut metallurgical and thermal coal mine and is expected to produce a run of mine (ROM) coal output of around 17.0Mt annually for over a period of 35 years.

The investment for this project has been around US$1.5bn. Apart from the open-cut thermal and metallurgical mine, the project will have mine infrastructure areas including a coal handling and processing plant (CHPP), rail loop and train load out facility and mine water management and storage facilities.

The project is located 27km north-west of Emerald located in the Bowen Basin, Central Queensland, Australia. The company has lodged the Environment Protection, Biodiversity and Conservation Act Referrals (EPBC) subject to review. The project construction is intended to start in 2024.

Bowen Coking Coal Projects

Bowen Coking Coal Limited (BCB) obtained a state environmental permit to develop the Isaac River metallurgical coal project in Queensland, Australia.

The Isaac River metallurgical project aims to develop the Isaac River mining area located 30 km west of Moranbah. This project is intended to produce a run of mine (ROM) coal output around 0.4–0.6Mtpa for a period of 4- 5 years.

Metallurgical output from this project is intended to be exported to the Asian market, with a focus on Japan.

Originally, the Isaac River mining area was scheduled to start production in the first half of 2022. However, the commencement was rescheduled until the second half of 2022, partly due to a delay in the environmental approval process.

BCB expects to start work on the Isaac River mining area once the company has received federal environmental approval, as well as a mining lease. Both are expected to be obtained at the beginning of the September quarter 2022.

Apart from Isaac River, BCB is working on the redevelopment project for Bluff coal mine, the Burton Lenton metallurgical coal project and the Broadmeadow East metallurgical coal project. These projects which are also located in Queensland, are expected to commence production in 2022 – 2023.

Makhado Hard Coking Coal Project

MC Mining Limited (MCM) is aiming to develop Makhado hard coking coal project in a short time frame. Makhado hard coking coal project is an open- cut mining area located in the northern Province of Limpopo, South Africa. MCM intends to split the development of Makhado into two stages with the purpose of reducing the amount of the prior investment made in Makhado hard coking coal project.

MCM had scheduled to work on the development of phase 1 in 2020 with the target to commence coal production in the first half of 2021. However, due to fund procurement issues, the development of this phase got delayed. Now, MCM intends to complete the fund procurement taking advantage of the current conditions of the metallurgical coal export market.

Within the development of the phase 1, Makhado mining area will produce around 3.0Mt of raw coal and a saleable production of 1.1Mt annually for a period of 9 years. In phase 2, the company expects to develop two additional pits and various facilities including a coal processing plant.

Once phase 2 is completed, Makhado mining area will increase its production up to 4.0Mt of raw coal and a saleable production of 1.7Mt annually. Coal output from this project is planned to be used not only for the domestic market within South Africa, but also to be shipped to the export market.

Crown Mountain Project in BC

Australian miner Jameson Resources Limited (JAL) revealed its agenda for the Crown Mountain coking coal project. According to JAL, the company will make a final investment decision in the December quarter of 2023, once all the permits and licenses have been issued by the province of British Columbia.

Meanwhile, the preparation works of Crown Mountain mining area are expected to be developed in the June quarter of 2024. It is estimated the development works will take around 18 months and the mining area will commence production in late 2025.

The Crown Mountain open- cut mining area is located in the southeastern region of the province of British Columbia, Canada. The Crown Mountain project is expected to produce about 2.0Mt of hard coking coal and PCI coal for over a period of 15 years. In addition, the saleable coal produced from the mine will be exported to the Asian countries with a focus on Japan.

Olive Downs Coking Coal Complex

Pembroke Resources plans to develop its Olive Downs coking coal project. This project is a Greenfield metallurgical coal mine and is expected to produce a run of mine (ROM) coal output up to 15.0Mtpa. According to the development plan, Olive Downs will produce high quality coking coal and pulverised coal injection (PCI). The coal produced will be exported to the Asian market including Japan, South Korea and India.

The investment for this project is estimated to be US$1bn, which includes mine infrastructure areas such as coal handling and preparation plant (CHPP), 18 Km rail spur and on-site rail loop, private access roads, electricity transmission line, raw water pipeline, mine water management and sewage treatment plants.

Olive Downs coal project is located 40km south-east of Moranbah, Queensland, Australia and comprises the Olive Downs South and Willunga domains. Olive Downs South is intended to start production in 2023, while the construction of Willunga is scheduled to start in 2027.