Coal facts

Coal is an organically derived material. It is formed from the remains of decayed plant material compacted into a solid through millions of years of chemical changes under pressure and heat. Its rich carbon content gives coal most of its energy content. When coal is burned in the presence of air or oxygen, heat energy is released.

This energy can then be converted to other forms of useful energy. Primary applications for coal are thermal (e.g., electricity generation) and metallurgical (e.g., coking or steelmaking coal).

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Coal industry

In 2017, coal made up 27% of the world's energy supply. In Canada, many parts of the nation have abundant low-cost, domestic coal, while other regions have easy access to an international supply.

The Canadian coal industry produces coal for use in metallurgical applications (e.g., coking or steelmaking) and thermal applications (e.g., electricity generation).

Nearly half of the coal produced in Canada is thermal and half is metallurgical. Some power-generating companies not only use coal for electricity generation but also own coal mines or are involved in coal production themselves. Other companies generate electricity from purchased coal.

International context

Global coal production in 2019 is estimated at 7.9 billion tonnes, increasing by 116 million tonnes from 2018. The top 5 producing countries accounted for 79% of the world's coal production.

Find out how Canada’s coal ranks on an international scale:

Trade

Canada's imports of coal imports have trended downwards for over a decade, while exports have held steady. Canada exports about half of its production. The majority of Canada's coal exports go to Asia, which is still a significant consumer.

In 2019, Canada exported 36.5 million tonnes of coal around the world and imported nearly 8 million tonnes of coal, mostly from the United States. Exports to the United States accounted for 2% of Canadian coal exports, and represented 12% of total United States coal imports.

Canada's exports are primarily metallurgical coal (95% in 2019).

Uses

Coal is used for electricity generation, the manufacturing of steel and cement, and various industrial and residential applications. Canada produced 57 Mt of coal in 2019, of which 53% is metallurgical coal used for steel manufacturing and 47% thermal coal used for electricity.

In Canada, 7.4% of electricity is generated with coal. Electricity generation consumed 26 Mt in 2018, a 49% decrease from 50.7 Mt in 2008.

With the phasing out of coal-fired electricity by the Government of Canada, energy produced by coal will be eliminated by 2030. That said, coal will continue to be used for metallurgical processes.

Canadian production

Canadian production of coal has been trending down over the past decade and was 57 million tonnes in 2019.

Prices

After a peak in 2011, global prices for metallurgical coal started on a downward trajectory until the latter part of 2016, when it peaked at US$273 at the end of November. Since then, the prices have been declining, and have levelled at an average of US$175 per tonne in 2019. Globally, thermal coal prices experienced a similar trend.

Australia, Colombia and South Africa are globally recognized as the three terminal markets that determine global thermal coal prices. Coal prices fluctuate with global economic conditions, and recent price increases have occurred in conjunction with temporary mine disruptions in Australia and mine production curtailments in China.

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