India and China’s coal mining revival holds an energy crisis lesson

#CoalIndia, the world’s top miner of the commodity, has temporarily stopped deliveries to all consumers in the country other than power stations, even as it boosts deliveries from mine

A crunch on coal production from key hubs in China and India is beginning to ease, but that won’t be enough to halt Asia’s energy crisis.

Major industries in the region, including steelmakers to chemical producers, are expected to continue to face power disruptions through the winter, as fuel supply remains tight and as governments prioritize heating demand from households.

Coal India Ltd., the world’s top miner of the commodity, has temporarily stopped deliveries to all consumers in the country other than power stations, even as it boosts deliveries from mines.

“Markets may barely get by this winter on supply,” said Natalie Biggs, head of thermal coal research for Wood Mackenzie Ltd. “If we experience colder than normal temperatures in the Northern Hemisphere, like we did last year, we could see some severe shortages in some areas.”

China, the largest producer and consumer of the fuel, could boost mine output by an extra 100 million tons in the fourth quarter. Reserves are slowly rising in India after more than three weeks of daily declines, while Indonesia — the top exporter — is finally recovering from a rain-soaked slowdown in production.
The three nations are the world’s top coal producers, while China and India are by far the largest consumers, burning nearly two-thirds of the world’s supply combined. Even as mining activity ramps up, global coal production will remain below levels in 2019 and at a time when demand is increasing, according to Biggs.
Safety issues in China, heavy rains in Indonesia and Australia and logistics issues in Russia and South Africa have hampered coal supply all year. Combined with a post-pandemic recovery in industrial activity, that’s created a global shortage which is pushing prices to record levels and has caused blackouts and electricity curtailments.
Miners are finally starting to catch up. Indonesia, which had an unusually long and heavy rainy season, has now accelerated output and expects to meet an annual target of 625 million tons, according to Sunindyo Suryo Herdadi, director of mineral and coal program fostering, at the Energy and Mineral Resources Ministry.