Long Term Supply and Demand Aspects of Coal

The energy crisis and the general increase in fuel prices have changed the position of coal in the world. Countries need to review their policies on coal, depending on available reserves and their accessibility. On the demand side, a distinction should be made between the steel industry's specific demand for coking coal and the needs of power stations where coal is used in competition with other sources of energy. Coal consumption in these two sectors is expected to increase considerably over the foreseable future. Some countries have sufficient coal of their own to meet this increased demand but others will have to rely on imports. As a result, the tonnage of coal transported by sea may double by 1985. The coal industry lacks flexibility. The opening of new mines and the construction of a transport system to ship the coal takes time. This time-lag, coupled with the enormous expenditure involved, makes long-term contracts between producers and consumers essential.