Coal is Australia’s second top export and plays a major role in our nation’s economy, bringing in billions of dollars in tax and royalties.
Coal was the first commodity to be discovered and mined in Australia.
Now, we are the world’s largest coal exporter, with 78% of the coal we mine sent to over 30 countries. Coal is Australia’s second largest export after iron ore and Australia is the world's largest exporter of coal.
The two broad types of coal, brown and black, are both found in Australia. They have different chemical and physical properties. Brown coal (lignite), mined in the Victoria’s Latrobe Valley, is the lowest quality of coal, and is not exported. With a high moisture content and lower energy content than black coal, it is used primarily for power generation. Black coal, which comes predominantly from New South Wales and Queensland, and is exported, has a lower moisture content than brown and higher energy content, making it more useful and valuable as a fuel.
Australia ranks fourth in global black coal production after China (49%), the USA (15%) and India (9%). We export two kinds of black coal: thermal coal which is used for power generation, cement manufacturing and some industrial processes, and metallurgical coal, which is used in the manufacture of iron and steel. Over the past 10 years black coal exports have increased by more than 50%.
The majority of our metallurgical coal is sold to Asia and Europe, where it is used in steel-making. The largest buyers are Japan, India, China and the European Union. Thermal coal exports principally go to Japan, the Republic of Korea and Chinese Taipei for use in power generation.
Japan takes 39.3% of Australia’s black coal exports – the largest share, with a total of 115.3 million tonnes exported last financial year.
China is our second largest market with 42.4 million tonnes in 2009-2010, almost double the previous year.
The Republic of Korea accounts for 40.7 million tonnes, India for 31.92 million tonnes and Taiwan for 26.53 million tonnes, rounding out the top five destinations for coal from Australia.
Together these five countries accounted for 88% of all black coal exports with a further 28 countries taking the remaining 12%.
Demand for coal in China and India is expected to increase dramatically over the next decade in line with these countries’ projected need for coal for energy and manufacturing.
Australia was the only one of the world’s 33 advanced economies to grow in 2009 during the worst global recession since the Great Depression.
The principal reason for this was our continued coal exports. The importance of coal in the economy is also evident in its growing share of Gross Domestic Product.
This share has more than doubled, from 1.7 % in 2006-07 to 3.5 % in 2008-09, making it a significant contributor to the mining sector.