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Australia, Russia and South Africa Are the Focus of Investment in Export-Oriented Coal Mining



January 1, 2021 - Investments in export-oriented coal mining projects are under consideration in a number of countries. They are at various stages in the development process and here are classified as “more-advanced” and “less-advanced”.

More-advanced projects under development represent about 93 Mtpa of coal mining capacity, of which about 69% are for metallurgical (met) coal though it is less than 20% of coal demand and around one-third of international trade. Most of the more-advanced projects are in Australia (41%), Russia (22%) or South Africa (19%). Most of the projects in Australia and Russia are for met coal, while most in South Africa are for thermal coal.

The pipeline of more-advanced projects is sufficient to sustain the trend of expanding production capacity seen in recent years. However, disruptions due to the Covid-19 pandemic could have a dampening effect on the implementation of specific projects.

Less-advanced projects under development represent about 819 Mtpa of coal mining capacity, of which about 66% is planned in Australia. This partially reflects that Australia is more transparent than other countries with respect to proposed coal developments, as well as that both its resource base and the legal and regulatory framework are favourable to attract investors and project development companies.

In Annex 2, a non-exhaustive list of coal mining projects in the major exporting countries is attached.

Investments in coal-related infrastructure are commonly linked to coal mining developments. For instance, as Russia proceeds to increase coal production and exports, investments are being made in the related transport infrastructure such as the Elegest-Kyzyl-Kuragino railway line, one of the largest infrastructure projects in modern Russian history. In Australia, the most significant expansion is led by Bravus Mining and Resources (former Adani Mining), an Indian company, and investment plans include a 189 km railway line to connect their Carmichael mine with the existing rail network. In South Africa, Transnet, the rail operator, is well underway to develop rail infrastructure to connect Limpopo and Richards Bay. Feasibility studies to extend this rail line to the Mmamabula Coalfield in Botswana are in progress.