The Met Coal Market is Growing & Changing…
Two macro trends are set to dominate the met coal market for the coming two decades:
- Continued strong global demand growth with lack of capital for new project development and
- ESG Strategies and associated carbon pricing for the industry, changing its dynamics
- European Steel Mills are currently paying 30 – 60 Euros per tonne (€/t) CO2 in excess of mandated CO2 production hurdles; each year, the production hurdles reduce and the tax for excess CO2 increases
- In Canada, CO2 emissions charges are currently C$40/tonne but rise to C$50/tonne in 2022 and they increase each year thereafter to C$170/tonne.
- Steel mills in USA, Canada, Europe (key target markets for CCL) are actively looking for ways to offset CO2 produced, through new efficiency projects and partnering with met coal suppliers that provide CO2 neutral or negative met coal
- Methane drained underground coal mines such as those held by Coking Coal emit significantly lower CO2 which can be offset through emissions management programs, allowing European, American, Canadian and South American steel mills to acquire CO2 neutral or negative met coal
- CCL’s Pardee operation uses conveyors around the site to transport coal, powered by renewable electricity. As well, in order to offset the CO2 emissions of trains and ships that carry CCL’s coal to world steel market, CCL has engaged in reforestation initiatives across the USA and Canada, taking on the responsibility to reforest abandoned mine lands and agricultural sites in return for the carbon credits associated with the site.