BAKU, Azerbaijan, June 25. Investments in the global coal supply are expected to increase by 10 percent year-on-year in 2022, Trend reports via the International Energy Agency (IEA).
According to the research, around $105 billion was invested in the coal supply chain in 2021, which is an increase of 10 percent, compared to 2020, and almost close to the 2019 level (before the COVID-19 pandemic).
Meanwhile, the IEA does not expect the investments growth outside of China and India - major global coal suppliers.
"Coal shortages in China have had a significant ripple effect on investment in coal extraction, as the government has responded rapidly by increasing production in the short term. Coal mining capacity grew by around 370 Mtpa in the second half of 2021. With the opening of 140 Mtpa in the first half of 2021, this means that more than 500 Mtpa of coal extraction capacity has been put into operation in China in one year. Net capacity growth was lower, however, as part of the new capacity was commissioned under a capacity exchange scheme involving mine closures," said the report.
The IEA said India, the world’s second largest coal consumer and producer, aims to increase coal production as energy needs increase, and the government seeks to reduce imports. This is particularly relevant as the use of more expensive imported coal increased in 2022 due to supply shortages. The government-owned Coal India, accounting for more than 80 percent of national production, has set itself a target of 1,000 Mtpa in the upcoming years, as well as investing in the construction of washing plants and railway corridors.
“At over $80 billion, China and India are anticipated to make up the bulk of global coal investment in 2022. Outside China and India, it is not clear that such an increase in investment will take place. Investment in new “greenfield” coal mines follows long development cycles, meaning investors require a long-term view on demand beyond the current price cycle. However, higher prices can stimulate near-term investment in existing capacity,” the IEA said.
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