Belgium, (Brussels Morning Newspaper) EU member states are turning to coal in an effort to rein in energy prices, which is driving up price of coal.
As bloc members stop importing Russian natural gas and coal, they are looking for alternatives to plug the holes in their respective energy mixes, according to Reuters reporting on Tuesday.
Coal buyers from Europe and beyond are competing for coal from remote places including Botswana, Tanzania and potentially Madagascar.
Cargill commodities trader noted that its coal shipments to Europe increased from roughly 7 million tonnes in the period between June and August last year to about 9 million tonnes in the corresponding period this year.
Jan Dieleman, head of the company’s ocean transport division, pointed out that “Europe is competing with other buyers and the alternative is more expensive, which is gas.”
Dieleman predicted that European countries will be able to source the coal they need and added “we will see very strong flows into Europe from Colombia, South Africa and even further away.”
Significant uptick
Maritime trade data platform Shipfix noted that 57 cargo orders for Tanzanian coal were made on the spot market in the second half of the year, in contrast with two in the corresponding period last year.
Tanzania’s Mining Commission expects its coal export to double this year and predicted that production will increase about 50%.
Tanzanian mining company Ruvuma Coal exported at least 400,000 tonnes of coal to France, India and the Netherlands in the period since November last year.
Braemar ship broker’s analysis shows that seaborne coal imports stood at 97.8 million tonnes in July, reaching a record high and presenting annual growth of approximately 9%.
Thunder Said Energy research consultancy analyst Rob West pointed out that coal mining companies earned about USD 15 per tonne before the price hike and stressed that the margin now stands at roughly 235 per tonne as prices more than quadrupled.
Increased prices opened new opportunities for landlocked producers who could not sell their coal on the seaborne market before price hikes.
Morné du Plessis, CEO of Botswanian coal company Minergy, pointed out “earlier, the logistics would kill us… however, at current prices, we can make this thing work.”
