Coal is an organically derived material. It is formed from the remains of decayed plant material compacted into a solid through millions of years of chemical changes under pressure and heat. Its rich carbon content gives coal most of its energy content. When coal is burned in the presence of air or oxygen, heat energy is released.

This energy can then be converted to other forms of useful energy. Primary applications for coal are thermal (e.g., electricity generation) and metallurgical (e.g., coking or steelmaking coal).

Key facts The main use of coal is electricity generation

Coal is also a key ingredient in the manufacturing of steel and cement

Canada's coal production in 2018 was 62 million tonnes

Canada exported 34 million tonnes of coal and imported 7.6 million tonnes

Canada is the world's fourth largest exporter of metallurgical coal, after Australia, the United States and Russia

Alberta and British Columbia produce 85% of Canada's coal.

In 2018, the Government of Canada announced final regulations to phase-out traditional coal-fired electricity by 2030.

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Coal industry

In 2016, coal made up 26.5% of the world's energy supply. In Canada, many parts of the nation have abundant low-cost, domestic coal, while other regions have easy access to an international supply.

The Canadian coal industry produces coal for use in metallurgical applications (e.g., coking or steelmaking) and thermal applications (e.g., electricity generation).

Nearly half of the coal produced in Canada is thermal and half is metallurgical. Some power-generating companies not only use coal for electricity generation but also own coal mines or are involved in coal production themselves. Other companies generate electricity from purchased coal.

International context

Global coal production in 2018 is estimated at 7.6 billion tonnes, increasing by 241 million tonnes from 2017. The top 5 producing countries accounted for 76% of the world's coal production.

World coal production, 2008–2018 (p) Text version This bar chart shows the world's annual coal production from 2008 to 2018. Production in 2008 was 6.7 billion tonnes. It then grew, peaking in in 2013 at 8.1 billion tonnes. Production in 2018 was 7.6 billion tonnes.

Find out how Canada’s coal ranks on an international scale:

World Production World coal production, 2018 (p) Rank Country Million tonnes Percentage of total 1 China 3,337 44% 2 India 762 10% 3 United States 685 9% 4 Indonesia 549 7% 5 Australia 483 6% 13 Canada 62 1% - Other countries 1,720 23% - Total 7,591 100% World exports World exports, 2018 (p) Rank Country Million tonnes Percentage of total 1 Indonesia 439 31% 2 Australia 382 27% 3 Russia 210 15% 4 United States 105 7% 5 Colombia 82 6% 7 Canada 30 2% - Other countries 173 12% - Total 1,420 100% World imports World imports, 2018 (p) Rank Country Million tonnes Percentage of total 1 China 295 21% 2 India 240 17% 3 Japan 185 13% 4 South Korea 142 10% 5 Chinese Taipei 67 5% - Other countries 495 34% - Total 1,424 100% World proved reserves World proven reserves, 2018 Rank Country Million tonnes Percentage of total 1 United States 250,219 24% 2 Russia 160,364 15% 3 Australia 147,435 14% 4 China 138,819 13% 5 India 101,363 10% 16 Canada 6,582 1% - Other countries 250,000 23% - Total 1,054,782 100%

Trade

Canada's imports of coal imports have trended downwards for over a decade, while exports have held steady. Canada exports about half of its production. The majority of Canada's coal exports go to Asia, which is still a significant consumer.

Canadian coal trade, 2005–2018 (p) Text version From 2005 to 2013, coal exports increased from 28 million tonnes to almost 40 million tonnes before falling to about 30 million tonnes in 2015, 2016, and 2017. Coal imports decreased from 21 million tonnes in 2005 to 7.6 million tonnes in 2018.

In 2018, Canada exported 34 million tonnes of coal around the world and imported 7.6 million tonnes of coal mostly from the United States. Exports to the United States accounted for 3% of Canadian coal exports, and represented 13% of total United States coal imports.

Canada's exports are primarily metallurgical coal (97% in 2018).

In 2018 the U.S. increased coal exports by 7% to 105 Mt, as exports to Asia increased by 23%. Metallurgical coal accounted for 53% of U.S. exports.

Canadian exports and imports of coal (2018) Text version In 2018, Canadian exports of coal were valued at 7.5 billion dollars. The major destinations for those exports were South Korea (25%), Japan (22%), India (13%) and China (9%). Less than one percent of Canada's coal exports are to the United States, representing 13% of U.S. coal imports. As for Canadian coal imports, 69% come from the United States. Half of all imports are used for the manufacturing of steel, the rest is for electricity generation.

Uses

Coal is used for electricity generation, the manufacturing of steel and cement, and various industrial and residential applications. Canada produced 62 Mt of coal in 2018, of which 49% is metallurgical coal used for steel manufacturing and 51% thermal coal used for electricity.

In Canada, 9% of electricity is generated with coal. Electricity generation consumed 33.2 Mt in 2017, a 40% decrease from 55.6 Mt in 2007.

With the phasing out of coal-fired electricity by the Government of Canada, energy produced by coal will be eliminated by 2030. That said, coal will continue to be used for metallurgical processes.

Global coal demand by sector, 2017 Text version This circular chart shows the major global sources of demand for coal in percentages in 2017. The largest share of coal was used in electricity generation and heating (67%), followed by iron and steel industries (17%), the chemicals industry (5%), cement manufacturing (4%), and other sectors (8%).

Canadian production

Canadian production of coal remained steady at 62.3 million tonnes in 2018.

Canadian coal production, 2008–2018 (p) Text version This bar chart shows Canada's annual mine production of coal from 2008 to 2018. Production was 67.7 million tonnes in 2008, followed by ups and downs over a 10-year period. Production was 62.3 million tonnes in 2018.

Coal production

by province, 2018 Text version Canada produced 62 megatonnes of coal in 2018. Production by province is as follows: British Columbia 44%, Alberta 41%, Saskatchewan 15%, and Nova Scotia at 1%. Coal fired generating capacity Footnote * by province, 2018 Text version Canada has a coal-fired electricity generating capacity of 9,834 MW in 2018 (excluding temporarily deactivated capacity). Alberta has the largest proportion of coal-fired generating capacity at 66%, and is followed by Saskatchewan (16%) and Nova Scotia (13%).

Coal used for electricity generation Text version Electricity generation consumed 33.2 Mt in 2017, a 40% decrease from 55.6 Mt in 2007.

Prices

The global metallurgical coal price peaked three times over the last 10-year period:

US$300 per tonne in 2008

US$330 per tonne in 2011

US$294 per tonne in 2016

Globally, thermal coal prices experienced a similar trend.

Australia, Colombia and South Africa are globally recognized as the three terminal markets that determine global thermal coal prices. Over the last 10-year period, prices have fluctuated as follows:

Peaked in the summer of 2008 at US$170 to US$180 per tonne

Declined through 2011, 2012, 2013 and 2014 to reach US$45 to US$52 per tonne by December 2015

Rallied to reach US$89 to US$100 per tonne in November 2016

Fluctuated during 2017 and 2018

Coal prices fluctuate with global economic conditions. Recent price increases occurred in conjunction with temporary mine disruptions in Australia and mine production curtailments in China.

Global coal prices, 2008–2018 Text version This line chart shows four series of monthly coal prices in US dollars per tonne from 2008 to 2018. The upper line shows that the Australian premium hard coking coal price started at $300 in January 2008, fell to $129 in 2009, rose to $211 in 2010, peaking at $326 in the spring 2011, continuously declining to $76 by December 2015, rose to $294 in November 2016, declined to $159 in March 2017 and fluctuated in 2018 to reach $225 in December 2018. The lower three lines show that the Australian thermal, Colombian thermal and South African thermal coal prices began at $91 to $102 per tonne in January 2008, trending upward and peaking at $167 to $180 per tonne in the summer 2008, falling to $57 to $61 per tonne in the spring 2009. Prices bounced back to $115 to $132 per tonne in early 2011, then continuously declined to $45 to $52 by December 2015 before rallying to $89 to $103 per tonne in November 2016. After declining at the beginning of 2017, the price of thermal coal increased slightly to finish the year at $83 to $100 per tonne. 2018 showed prices beginning at $86 to $106, to decline afterwards to $75 to $96, then regaining at $106 to $119, to settle in December at $95 to $101.

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