Coal industry predicts bright future – by Derrick Penner (Vancouver Sun – September 13, 2013)

Exports from Western Canada likely to double over next decade, conference hears

Coal, unloved by environmentalists and battered by a global market glut that has ravaged corporate profits, is still likely to see its production and exports double from Western Canada over the next decade.

“Western Canada produces mainly metallurgical coal for the steel industry and it’s got a lot of things going for it,” said Gerard McCloskey, moderator for the Coal Association of Canada’s annual conference that is in Vancouver this week.

McCloskey, a U.K.-based industry consultant, said Western Canada remains attractive because of its good quality and untapped reserves, and he said while markets are oversupplied now, there is still considerable room for growth, particularly in the Pacific.

“I would think there will be, in my own forecast, a doubling of exports from Western Canada over the next 10 years,” McCloskey said. The coal association conference gathered more than 300 industry participants from all levels of the mining sector and its supply chain, from equipment dealers to consultants and transportation specialists.

The general message of Thursday’s high-level presentations on the market was that, beyond some immediate gloom, there is a bright future for coal – depending on how you look at it.

“Our forecast for both Canadian thermal and metallurgical coal is quite bullish,” said Joe Aldina, a New York-based analyst with Wood Mackenzie, a major research firm in energy and coal.

For metallurgical coal in particular, Wood Mackenzie’s forecast is for global demand to rise from something short of 300 million tonnes last year to 350 million tonnes by 2016, with 75 per cent of the growth coming from the Pacific region, namely India and China.

And the demand line for Wood Mackenzie’s forecast rises above 450 million tonnes through to 2030, depending again on continued growth in the Pacific region.

“We see that steelmakers in Asian economies will continue to have strong dependence on Canadian metallurgical coal, given its high quality and reliable nature of supply,” Aldina added.

Coal is already B.C.’s top mining export, with the province’s nine operating mines churning out 28.6 million tonnes of coal in 2012 worth $5 billion , according to provincial statistics.

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