Home' Australian Resources and Investment : December 2012 Contents 62•AustralianResourcesandInvestment•Volume 6Number 5
In the developed world, few of us give secure energy
access more than a passing thought.
We take it for granted that the lights will stay on and
we expect our computers to boot up at the touch of a
button. I’m sure most of us here recharged multiple mobile
communications devices overnight.
But let’s look beyond the ease and comfort of our own
Enter the villages of sub-Saharan Africa, Asia and
elsewhere − where families need electricity for the most basic
needs: clean water, warmth, refrigeration and light.
India’s recent blackouts underlined the fact that more
than half the world’s population lacks proper energy access –
and 1.3 billion people have no electricity access at all.
It is estimated that we lose 1.5 million people to the effects
of energy poverty each year. These are tragic conditions that
society cannot allow.
I continue to state that the greatest crisis we confront in
the 21st century is not an environmental crisis predicted by
manmade computer models, but a human crisis fully within
our power to solve.
Broad energy access to reduce global poverty is Peabody’s
top priority, and should be the world’s top priority.
Peabody has a plan that targets energy access for all by
2050 – and coal is the only sustainable fuel with the scale to
reach our global energy access goal.
There is another strong, and critical, correlation here
between expanding coal use and growing economies.
Since 1970, coal use has increased approximately 300 per
cent. A rapid rise in the world’s use of coal-fuelled electricity
mirrors the global rise in GDP.
This is the economic miracle powered by coal.
Now, despite the current soft markets, global demand for
coal continues to grow.
In fact, over the next five years, we see global coal demand
growing by 1.3 billion tons, with China and India driving the
lion’s share of that increase.
This demand comprises more than one billion tons of
new thermal coal demand to support 395-plus gigawatts
(GW) of new generation. In addition, we see some 200 million
tons of additional met coal demand to serve estimated steel
production growth of 20 per cent over the same time frame.
We are seeing new generation and steel plants in China
and India being built along the coast to accommodate the
demand centres and enable greater imports.
China’s coal imports have grown dramatically over the last
several years, and are projected to double from 2011 to 2016.
Coal imports into China are on pace for another record
year in 2012, with expected total imports of some 280 million
tonnes. We have already seen Chinese coal imports rise some
68 per cent per year to date.
China’s imports are being driven both by practicality and
strategic purpose. China has called for limits to coking coal
production, for instance, based on what it notes is a ‘special
and scarce’ resource. And China has significant upside to its
met coal imports, with the nation currently importing less
than 10 per cent of its needs.
Millions of People Who Lack Adequate Electricity
Energy is a Human Right
and a Rapidly Rising Need
3.6 Billion People Have No or Only Partial Access to Electricity
Source: Int ernational E ner gy Agency World Energy O utlook 2011 and The W orld Bank W orld Devel opment Indicator s 2011.
Millions of People Who Have No Electricity
The Economic Miracle
Powered by Coal
Source: Developed from International Energy Agency World Energy Outlook (1995-2011); USDA 2011.
Near Perfect Correlation Between Coal Use and GDP Growth
Annual World Coal Demand Expected to
Grow ~1 .3 Billion Tonnes in Five Years
● New coal-fueled
generation of 395+ GW
expected by 2016
● Steel production expected
to grow 20%, requiring
additional 200 MTPY of
● More than 85% of global
demand growth in
● Seaborne demand
expected to grow at
Source: Peabody Global Analytics.
Expected Global Coal Demand
(Tonnes in Millions)
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