Pacific Rim Coal Resources A Comparative Analysis

Introduction This is the Pacific Rim. Nearly three fourths of the world's population live on or near its border. In the recent past, on any given day, one could find traversing its„ borders pirates, smugglers, gunrunners, missionaries, slave traders, tourists, and businessmen. If one were not too observant, he would notice that over the last several years the ocean traffic in the Rim has pretty much stayed the same--Polynesian outriggers, passenger ships, general cargo vessels, ore carriers, and oil tankers. If he were to look a little closer, he would notice some coal colliers. A still closer look would reveal that most of them were hauling metallurgical coal destined for the steel mills of Japan, Taiwan, or Korea. If his senses were keen, he would observe that not only were the number of colliers increasing dramatically, but also that a relatively new cargo was being carried to those countries as well as additional areas in the Pacific Rim., This new cargo thermal coal holds the promise of not only exceeding the metallurgical coal trade, but significantly cutting into and decreasing the already vast oil tanker business throughout the Pacific Rim. The high price of crude oil as a result of the oil embargo in the Middle East in 1973-74 has forced the Pacific Rim countries to convert to coal, and as a result, the coal resources of the Rim are being exploited at an ever-increasing rate. Although coal produced outside the Pacific Rim does enter its borders for ultimate consumption from such places as South Africa and the East Coast of the United States, the vast majority of thermal coal that will enter this booming market place will be sourced from countries within the Pacific Rim. Accordingly, this paper will provide an overview of those sources with particular emphasis on the non-communist block nations. This is not to say that countries such as China and Russia will not be players in the Pacific Rim thermal coal arena, but that -most consuming countries in the Rim are basing the majority of their near-term sourcing requirements from countries that provide a stable source of supply. Pacific Rim Coal Resources Figure 1 is a map of the Pacific Rim countries and identification of major coal resource locations within its border. Going in a clockwise direction, the following countries will be the major suppliers of thermal coal through the year 2000: Australia, Indonesia, China, Russia, Alaska (U.S.), Canada, United States (Utah, Colorado, Wyoming, Montana), and Colombia, South America. Other countries such as New Zealand, Malaysia, Philippines, Korea, etc., will play a role in supply, but compared to the ones previously mentioned, will only have a minor impact. When one looks at the vast stretch of ocean that separates the sourcing countries from the consuming countries (Japan, Korea, Taiwan, Hong Kong, Singapore, etc.), one realizes that costs of transportation will play a significant role in determining which countries and in what quantities coal will be purchased. Figure 2 for comparative purposes, shows