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Summary
- As per the Australia energy and resources quarterly June edition, the Australian metallurgical coal exports are anticipated to rise from 171 million tonnes in 2020-21 to over 186 million tonnes by 2022-23.
- In response to a Catholic nun’s plea, the Federal court declared that Australia's environment minister is responsible for protecting children from personal injury from climate change.
- The coal majors including Whitehaven Coal Ltd (ASX:WHC) and New Hope Corporation Limited (ASX:NHC) offers a 52-week return of ~30.4% and ~36.2% respectively.
In response to an 86-year-old Catholic nun’s lawsuit, the Federal court has declared that Australia's environment minister is responsible for protecting children from personal injury from climate change. Last year, the octogenarian nun had filed a lawsuit against the country’s Environment Minister Susan Ley and Vickery Coal Pty Ltd. The lawsuit on behalf of eight Australian kids sought to challenge the expansion of the Vickery coal mine in northern NSW.
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The students from the academy had begun their activism, conducting protests under the nobel laureate Greta Thunberg’s network called School Strike 4 Climate. The protests led by students such as Anjali Sharma, ultimately caught the eyes of pedestrians. Climate litigator David Barnden represented the children’s plea at the court.
Must Read: What is coking coal, and where is it used?
However, such instances of activism are not new to the coal industry. Let me remind you of the behemoth Carmichael coal project, which had faced immense criticism and was claimed to be harmful for the Great Australian Barrier Reef. The thermal coal project was ultimately scaled down.
Coal Market Picking Up Pace
In contrast to coal’s performance in the early months of 2020 – when the onset of the pandemic pretty much destroyed the power demand and in tandem, affected coal prices, the coal market has picked up momentum on the back of rising steel and power demand across the globe.
During the year, the Asia-Pacific benchmark coal prices surged to new multi-year record levels amid the rampant supply disruptions and rising demand.
Read Here: Glencore plans retirement from the coal business by 2050
Earlier during the year, China, the world’s largest importer of coal, banned importing coal from Australia, which triggered a major rally in the commodity as the Asian country struggled to secure high quality coal shipments from alternate suppliers and even faced massive power outages. With supply disruptions from Mongolia and Indonesia, the Asian powerhouse turned to the US and Russia to secure its shipments.
Further, the stimulus packages announced by the major economies globally sought to rebuild their infrastructure in efforts to boost their economy. Also, the power demand has recovered immensely as the world inches closer to the pre-pandemic situations upon the launch of massive vaccination programmes.
Australia – India: Forging stronger partnerships
As for the Australian coal miners, the ban imposition did not make as substantial affect as anticipated, as the miners simply switched and rerouted their cargoes to India, another Asian energy monger, that has been strengthening strategic relationships with Australia. Australia and India had entered into a deal for critical and strategic metals supply in the year 2020. The coal exports may fill the gap for the Asian country, which is another contender for the next superpower.
Suggested Content: How Chinese ban on Australian Coal reshuffled the Global Coal Trade?
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As per the Australia energy and resources quarterly June edition, the Australian metallurgical coal exports are anticipated to rise from 171 million tonnes in 2020-21 to over 186 million tonnes by 2022-23. Metallurgical coal alone fetched Australia over AU$22 billion in 2020-21 and is estimated to rake in AU$32 billion by 2022-23 as the country has already reorganised its supply chains in response to the Chinese ban.
Further, as per the report, the thermal coal exports declined from 213 million tonnes in 2019-20 to just 194 million tonnes in 2020-21. The Australian exports are well placed to grow even in this category in the upcoming years.
While the coal market continues to grow on the back of the obvious demand markers from the pandemic, coal stocks have also been performing well during the year.
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Benefitting from the coal rally, the shares of Allegiance Coal Limited (ASX:AHQ) surged to AU$0.7 a share, offering a massive 52-week return of ~103% as of 9 July 2021. ASX-listed coal majors including Whitehaven Coal Ltd (ASX:WHC) and New Hope Corporation Limited (ASX:NHC) have offered a 52-week return of ~30.4% and ~36.2%, respectively.
