Modern Mining January 2025

ADVERTORIAL COMMODITIES OUTLOOK

Coal remains the legitimate energy choice for over 100 nations, providing critical support for economic development and urbanisation. This is especially true in regions like Southeast Asia and parts of Africa, where coal is vital to maintaining consistent power output. Developing nations, often grappling with nascent energy infrastructures, rely on coal as a dependable and cost-effective energy source. In fact, according to the International Energy Agency (IEA) Coal Market 2024 report, global coal demand is forecast to reach an all-time high of 8.77 billion tonnes (Bt) in 2024, following steady growth over the past three years. The power sector remains the primary consumer, with electricity generation from coal projected to hit 10,700 terawatt-hours (TWh) in 2024, reflecting sustained global electricity demand. For at least the next two decades, coal will play a central role in delivering sustainable and affordable energy security, particularly in countries with limited fuel options. While reliance on fossil fuels may be declining in some regions, parts of emerging markets continue to employ coal and gas-fired power plants at enormous scales, maintaining their critical role in electricity systems. Industrial Growth in Developing Economies The IEA projects that energy consumption in Central and Southern Asia will increase by 18% between 2020 and 2040, with coal remaining a dominant energy source. By 2027, Asia is expected to consume over 70% of global coal, driven by rapid industrialization and energy security demands. Countries like China and India, which together account for over 70% of global coal consumption, continue to lead this demand. Industrialisation in these regions has solidified coal’s role in the energy mix, particularly as alternatives such as renewables and natural gas remain cost-prohibitive for many. While coal use has declined in some markets, it remains a vital energy source for electricity generation, as well as steel and cement production worldwide. Supply Constraints In addition to rising demand, the global coal supply is facing multiple challenges. Geopolitical tensions, such as the Russia-Ukraine war and that in the Middle East, have disrupted supply chains, while infrastructure limitations have further constrained coal production and transportation. Furthermore, access to capital for new coal investments and insurance remains limited, which will discourage new development of coal mine projects. This provides an opportunity for Thungela, as the company has access to existing high-quality coal resources and reserves.

Coal remains an indispensable part of the global energy mix.

Coal Outlook: 2025 presents more complex dynamics By Thungela As the world shifts towards a future defined by sustainability and innovation, coal remains an indispensable part of the global energy mix. The year 2024 has been marked by both challenges and opportunities for the coal industry, while 2025 presents even more complex dynamics, driven by global trends. Despite the ongoing energy transitions, coal’s importance as a reliable and affordable energy source, particularly in developing economies, cannot be understated. Drivers of Coal Demand in 2024 and Beyond Energy Security In 2022, energy security emerged as a key strategic priority for governments worldwide triggered by the Russia – Ukraine conflict and the resultant ban on Russian commodities. This crisis led to an immediate increased demand and stockholding of energy (fuel) sources including coal. The energy source supply risks have been further elevated by the geopolitical tensions in the Middle East. The need by governments to ensure affordable and reliable energy security has again highlighted coal as a key energy source now and for the foreseeable future. Whilst the energy transition continues to evolve in developed economies in the main, developing countries will remain reliant on coal for energy and industrial applications.

24  MODERN MINING  www.modernminingmagazine.co.za | JANUARY 2025