## Factors Affecting Future Australian Coal Exports
Oral Presentation

By Mark Earley
Senior Mining Consultant, Barlow Jonker Pty Ltd., Sydney Australia

The currently known resources of both thermal and metallurgical coals, held within the major export coalfields of Australia, have been calculated at 59.2 billion metric tons.
In calender year 2000, Australia exported 186.75 Mt of coal equivalent to 36 percent of the world seaborne trade. Its nearest rival was South Africa with 69.9 Mt. Australian sales to Asian markets accounted for 143.8 Mt in 2000, of which 86.8 Mt was shipped to Japan. Asian markets represent 77 percent of total world seaborne coal exports in 2000. The value to the Australian economy places coal as its single largest export earner, accounting for $A10.824 billion (U.S. $5.499 billion) of exports for 2000/2001.
Australia exports both thermal and metallurgical coals, the characteristics of which are:
Australian export thermal coals are bituminous and are in general:

- Low sulfur (<1 percent)
- Medium ash (10 to 14 percent)
- High volatile matter (approximately 30 percent)
- Low to medium moisture (9 to 12 percent)
- Medium to high calorific value (>6,200 kcal/kg gross as-received or >11,600 Btu/lb)

Metallurgical coals exported from Australia fall into the general categories of:

- Pulverized coal injection (PCI) coal
- Semi coking coal
- Hard coking coal

There is significant interplay in the export market of PCI and semi coking coals in terms of their end use as thermal or metallurgical coal. PCI coals from New South Wales are typically low-ash, high-volatile, high calorific value coals. Recently, there has been strong export demand for very low volatile (12-13 percent), high calorific value coals from Queensland to be used as PCI coal. Semi coking coals, like PCI coals, are used either as replacement for hard coking coal in coke oven blends or as fuel in blast furnaces and are characterized as having a crucible swell number of around 3, mid to high volatile matter, and a fluidity of 300 to 1,000 ddpm. The advantage these coals have in the export market is as lower cost replacements for hard coking coals.
Australian hard coking coals are classified primarily by their volatile matter. These coals tend to be low to medium ash with a wide range of fluidity.

- High volatile hard coking coal = 29 to 36 percent volatile matter
- Medium volatile hard coking coal = 22 to 28 percent volatile matter
- Low volatile hard coking coal = 19 to 22 percent volatile matter

Issues affecting the future export of Australian coals, with specific reference to its major markets in Asia are:

  For thermal coal, significant changes in specification are being seen. An example of this is the ash yield of imported coal where disposal cost of the ash is a problem for the consumer. A major Asian power company that imports Australian coals has reduced reference ash specifications to 11 to 12 percent as opposed to previous reference specifications of 14 to 15 percent. Changes to sulfur specification are critical to powerplants with no flue gas desulfurization (FGD) equipment. Within Asia, where powerplants are deferring the introduction of FGD, a sulfur content of 0.8 percent maximum is now the preferred level. Using the same Asian power company as an example, their tenders incur a cost demerit for coal with sulfur content above zero (0) percent when evaluated. These changes in specification have seen an increase in blending of subbituminous coals from Indonesia, which have a low calorific value (4,200 to 5,600 kcal/kg gar) but have the advantages of low ash (2-4 percent) and low sulfur (0.2 percent).

  With regard to metallurgical coals, price awareness has seen the increase of PCI usage and semi coking in coke oven blend coals. Asian steel mills are pushing the limits in the use of these coals owing to the higher cost of hard coking coals. Recently, low-volatile, high calorific value thermal coals have found increasing acceptance as PCI coals.

  Among the issues affecting hard coking coal properties is the demand for increasing coke strength owing to the high usage of PCI coals. This will include improvements in cold strength (M40) and hot strength (CSR). Impurities will be very important; emphasis will be placed on low ash levels to reduce slag levels and disposal costs. Sulfur and phosphorous levels will be under pressure as coke impurities will be of concern to iron makers.

  The acceptance of the Kyoto Protocol (COP-3) is seen as having no major effect on Asian coal import demand to any extent. Most importing countries have a well-balanced fuel mix for power generation. The ability of these countries to reduce carbon emission by reducing coal-based power generation is limited. One aspect of the Kyoto Protocol is that, in order to meet emission targets, we may see the transfer of energy-intensive industries to developing countries in Southeast Asia. An increase in seaborne coal trade with the region would be a likely result of such a transfer.

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