Despite lukewarm economic prospects, global supplies grew by 8% in 2022 to a record 8 634 Mt. The three largest producers – China, India and Indonesia – each reached all-time highs in 2022. Coal production was mainly boosted by China and India, which rapidly increased domestic production to mitigate exposure to high market prices after a first price spike in October 2021.

According to the National Bureau of Statistics (NBS), China in December 2022 passed 400 Mt1 of production in a single month for the first time. This is more than any other country, except for Australia, Russia, Indonesia, India and the US, produces in a whole year. With rapid growth of 11% in 2022, China is ahead of its 14^th Five-Year Plan.

India boosted its domestic production by about 12% to 924 Mt to avoid shortages and reduce import dependency amid rising demand. Coal India Ltd (CIL), the state-owned company accounting for 80% of India’s domestic coal production, increased output by about 12%. Other public companies – SCCL and NLC – also contributed, although the increase in captive blocks – those players allowed to produce coal for their own consumption – was more significant (+30%).

Coal production in the European Union grew for the second year in a row to a total of 349 Mt, up 5% from the previous year, owing to an increase of lignite production to feed nearby power plants, mostly in Germany, Czech Republic and Bulgaria.

Indonesia increased coal production to about 641 Mt in 2022, up 12% from the previous year. Indonesia was partially filling in for other suppliers which did not manage to ramp-up production to benefit from tight markets and surging coal prices. Australia’s coal production suffered from adverse weather conditions caused by La Niña but also from the aftermath of the Covid-19 pandemic. In total, coal production in Australia contracted by about 3% to 451 Mt. In the United States, weak domestic demand limited the increase to just over 3% to 542 Mt despite high coal prices. Severely impacted by adverse weather and protests, Colombia’s coal production increased by only slightly more than 2% to 57 Mt, despite high export prices. In South Africa, rail disruptions and a decline in domestic consumption affected coal production, resulting in an increase of only 0.5%. Russia’s coal production remained stable at 442 Mt (-0.2%), as sanctions imposed in response to its invasion of Ukraine and eastbound railway bottlenecks prevented the otherwise expected growth.

Global coal production is expected to grow further in 2023, driven by an expected strong ramp-up of production in China, India, and Indonesia in the first six months, offsetting declines in the United States and the European Union. Russian coal production is estimated to have recovered somewhat in the first half of 2023.

In March 2023, China reached another monthly record of 417 Mt1, surpassing the previous record set in December 2022. In total, we expect China’s production to increase by 3.3% to 4 631 Mt for the full year 2023.

In the first half, India’s supply rose by about 10%, reaching a new single-month production record of 107 Mt in March, according to the Coal Ministry, surpassing 100 Mt in a single month for the first time. For the entire year, we expect an increase in coal production to about 989 Mt (+7%), close to the government's 1 bt target.

Indonesia’s coal production grew by an estimated 16% to 353 Mt in the first six months of 2023. Growth is expected to slow down in the second half and we expect an increase of about 8% to about 695 Mt for the full year.

Due to ongoing demand destruction owing to wide unavailability of coal power plants after years of poor maintenance and severe infrastructure issues, South Africa’s coal production is expected to decline by about 4.2% to 220 Mt in 2023. In the first half, production is estimated to have decreased by an even faster 10%.

In the US, coal production turns downward again. Although production is expected to have increased by about 0.8% in the first half of the year, for the full year we forecast a 4.2% drop to 519 Mt, compared to a 22% decline in demand. Higher exports and stock building at power plants explain the gap.

In the first six months, coal production in the European Union plummeted by an estimated 17%, driven by falling demand from the power sector. In total, we forecast EU production to fall by about 8% to 321 Mt.

Russia’s coal production is expected to slightly decrease by 2.9% to 429 Mt in 2023, after an estimated 1.4% increase in the first six months. But any forecasts for Russia are difficult under the current wartime circumstances.

Australia’s coal production is set to increase by 2%, as weather conditions enable producers to significantly expand production, after they had been severely hit by La Niña last year. Coal production is anticipated to rise to 460 Mt.