SYDNEY—Amid the misery in a market strained by bankruptcies, mine closures and mass worker layoffs, coal still has at least one major supporter.
BHP Billiton Ltd., the world’s biggest mining company, on Tuesday sounded a bullish note on future demand and its role as a major exporter. In an investor briefing, it said the world’s appetite for coking coal, used in steelmaking, and thermal coal, which is burned to generate electricity, will rise as developing economies demand more steel and energy.
“We expect that thermal coal will remain front and center in Asia’s energy portfolio into the foreseeable future because it is the cheapest and most readily available source for power generation,” said Mike Henry, BHP’s head of Australian mining.
The mining company said thermal-coal demand will increase 10% to 15% from 2015 levels by the mid-2020s, aided by robust buying in India and Southeast Asia, even as the fuel accounts for a declining share of global electricity generation. It expects demand for coking coal to be robust as well, as it predicts that steel output in China won’t peak until the middle of the next decade.
This isn’t a universally accepted view, even within the mining industry. Coal markets have been in decline since 2011 thanks to a global glut caused by supplies from new mines and expansions that were planned when prices were booming.
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