UPI: Global coal demand up, mining surging

Global coal demand up, mining surging

NEW YORK, Nov 16, 2004 (United Press International via COMTEX) Strong demand for coal from China and India is driving coal production to record levels, the Wall Street Journal reported Tuesday.

Last year world coal consumption rose 6.9 percent, compared with 2.1 percent for oil, according to BP, the British petroleum company.

To fill that need, in the United States coal production is expected to climb to a record of more than 1.2 billion tons, an increase of more than 3.7 percent from 2003. In China, coal production is expected to grow about 200 million tons, or 11.8 percent, this year to 1.9 billion tons.

Coal is booming because power plants are located close to the mines, reducing the plants' cost of operation, and there are still huge untapped coal reserves that can be developed at a low cost, unlike oil.

Also, the cost of producing enough coal to generate a specific level of energy is less than half the cost of producing enough oil to do the same.

By producing more coal for Chinese and Indian markets, the upward price pressure they would otherwise place on oil is relieved, thus putting a damper on petroleum prices.