BC Business
Coal | BCBusiness
Miners, steelmakers and analysts convened at the 2014 Coal Association of Canada conference held in Vancouver Thursday and Friday to discuss the dimming fortunes of the province’s second largest export commodity: coal.
“This past year has been challenging,” opened Ann Marie Hann, president of the Coal Association of Canada, citing low commodity prices, mine closures and project delays. While Hann gave an overall optimistic take on the industry’s prospects, many of the speakers at the two-day conference focused on the sector’s spate of troubles.
Years of oversupply and slowing Chinese demand have led to weak coal prices, said Joe Aldina, analyst at New York-based energy consultancy Wood Mackenzie. That has led many producers—like Anglo American—to idle mining operations in an effort to cut costs. Just on Thursday the mining giant announced that it would temporarily shut down operations at its facility in Tumbler Ridge, B.C. “What China does, really matters,” said Aldina, noting that trade opportunities with the world’s largest producer of steel are decreasing.
While weakening Chinese demand for metallurgical coal was cited as a concern by a number of panellists, global steel production has increased by 3.3 per cent in 2014, said Neil J. Bristow, a former chief analyst with BHP Billiton, illustrating the continued global demand for coking coal.
“Canada remains one of the best-positioned countries for metallurgical coal exports,” said Aldina. Metallurgical coal, which is used to make steel, accounts for 89 per cent of Canada’s coal exports. “Overall demand will remain very strong,” Aldina added.
with files from Jacob Parry