Global coal production in 2023 grew by 3.1% to 8 970 Mt, an all-time high, driven by a push from the top three coal producers China, India and Indonesia. Their combined total coal output increased by about 356 Mt, compared to 2022, resulting in a share of 72% of global coal production. At the beginning of this century, this share stood at slightly more than a third of global production, underscoring the substantial shift in global coal production over the last two decades.

After supply shortages in 2021, Chinese officials called for a boost in production, which resulted in a significant increase in 2022, and continuous growth throughout 2023. Nonetheless, the rise in production came with a higher rate of mine accidents and a notable deterioration of quality. Given China’s growing coal output and growing import volumes, it has shown a total supply of coal totalling more than 5 Bt, which dramatically exceeds any other country or region.

In Indonesia, production reached 775 Mt, significantly exceeding the production target of close to 700 Mt for 2023. Growth in domestic requirement as well as demand from China and other importers in that region have propelled the surge in Indonesian coal production.

As expected in our previous forecast, India has surpassed the mark of 1 Bt of coal production in 2023, showing a growth of 12% or 116 Mt. In India, recent investment in infrastructure and in mine expansions has supported increased coal production.

In 2023, Australian production grew by about 3.8% to 450 Mt. In Australia, a change in weather pattern from La Niña to El Niño during 2023 improved overall mining conditions, although bushfires and labour shortages diminished the favourable conditions. In the United States, production declined by 2.8% in 2023, as domestic demand slipped amid low gas prices. However, that decline is much lower than demand, owing to higher exports and strong stock building. Likewise, a slight decrease in coal output has been observed in Russia (-1.1%), where sanctions are affecting exports.

We expect global coal production in 2024 to decrease very slightly by 0.3% to 8 939 Mt. At a regional level, we expect growth in India and Indonesia, which are overcompensated by declines in China and in the United States.

In China, security issues in mining in the Shanxi region and subsequent stricter security checks reduced the production of coal in the first half of 2024. Shanxi is the largest coal producing region in China, surpassing 1.3Bt, and therefore, producing more than any country. However, we expect the decrease of 1.7% in the first six months to be moderated in the second half, as security checks are relaxed. For the full year of 2024, we expect a moderate decrease of 38 Mt to a total of 4 572 Mt in Chinese coal production. June 2024 already recorded a year-on-year increase of 3.6%. Given an anticipated slowdown in Chinese coal demand growth in the second half of 2024, we note that a recovery in production will have implications for imports and already ample stocks.

In Indonesia, we expect coal production to show slight growth during 2024. Indonesia’s Ministry of Energy and Mineral Resources has raised the coal production quota for 2024, also known as RKAB, by nearly 30% to 922 Mt. However, this number assumes operation at full capacity and typically producers reach usage of around 80%. Despite heavy rains in Sumatra and South Kalimantan in the first quarter of 2024, coal production in the first four months of 2024 has already gained 8.6%. In addition, domestic demand for coal is expected to increase, fuelled by electricity, the nickel industry and others. Nonetheless, close to 30% of Indonesian production is consumed in China, whose demand is estimated will flatten for the rest of the year. Against this background, we estimate a production of around 800 Mt in Indonesia for the full year 2024, growing by 2.9%.

In the United States, coal production in the first six months of 2024 was down 17% compared to the first half of 2023. Despite a slight increase in demand in 2024, coal production is expected to decrease by 12% down to 463 Mt in 2024, due to strong stock building in US power plants in 2023.

Aggregate coal production in Russia shows no sign of significant change in 2024. Nonetheless, there is some shift between producers within Russia. For example, Elga showed a growth of 31% during the first five months in 2024 to more than 10 Mt, but Russia’s biggest producer Suek, currently under US sanctions, records a reduction of 4%. It is worth noticing that Elga was included in the US sanction list in June 2024, so it is yet to be seen how this impacts its production.

India continues to push coal production, as highlighted by a growth of almost 10% in the first half of 2024, with June exhibiting an outstanding growth of more than 14% compared to the same period in 2023. Given India’s intensified efforts to overcome energy shortages and, at the same time, reduce import quantities, we expect its production to gain 9% for the full year. Thus, India is expected to contribute the most to global coal production growth, under the assumption that China will not trigger its production in the second half.

Coal production in Australia showed no significant variation in the first quarter of 2024 compared to the first quarter of 2023. In June 2024, an underground fire in the Grosvenor mine reduced the production of met coal, however, we do not expect this to significantly affect Australia’s annual output. Thus, we expect Australian production to remain flat in 2024 at about 450 Mt.