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These excerpts taken from the ACI 10-K filed Feb 29, 2008. The Coal
Industry
Global Coal Supply and Demand. Because of its
availability, stability and affordability, coal is a major
contributor to the global energy supply, providing approximately
40% of the world’s electricity, according to the World Coal
Institute, which we refer to as the WCI. Coal is also used in
producing approximately 64% of the world’s steel supply,
according to the WCI. Coal reserves can be found in almost every
country in the world, and approximately 50 countries are
currently mining coal.
Coal is traded worldwide and can be transported to demand
centers by ship and by rail. Worldwide coal production
approximated 5.9 billion tons in 2006 and 5.4 billion
tons in 2005, according to the WCI. China produces more coal
than any other country in the world. Historically, Australia has
been the world’s largest coal exporter, exporting more than
200 million tons in each of the last three years, according
to the WCI. China, Indonesia and South Africa have also
historically been significant exporters in the global coal
markets, however, growing demand in China has resulted in
declining coal exports and increasing coal imports. These trends
have caused China to become a less significant seaborne coal
supply source. In 2007, coal supply from other regions was
similarly affected because of mine disruptions, train
derailments and port congestion.
Growing demand for coal for power generation in many Asian
countries has begun to strain global coal supplies. Seaborne
coal trade increased 4.6% to approximately 806.9 million
metric tons in 2007, according to SSY Consultancy &
Research, Ltd. Seaborne trade into Asia increased approximately
9.1%, while European trade decreased approximately 4.3%. Demand
in China is expected to grow rapidly, as the demand for
electricity and the need for steel used in construction and
automobile production increase.
U.S. Coal Consumption. In the United
States, coal is used primarily by power plants to generate
electricity, by steel companies to produce coke for use in blast
furnaces and by a variety of industrial users to heat and power
foundries, cement plants, paper mills, chemical plants and other
manufacturing and processing facilities. Coal consumption in the
United States has increased from 398.1 million tons in 1960
to approximately 1.2 billion tons in 2007, based on
information provided by the Energy Information Administration,
which we refer to as the EIA.
Throughout the United States, coal has long been favored as a
fuel to produce electricity because of its cost advantage and
its availability. Since 1970, the use of coal to generate
electricity in the United States has nearly tripled in response
to growing electricity demand. According to the EIA, coal
accounted for approximately 50% of U.S. electricity
generation in 2007 and is projected to account for approximately
55% in 2030. By comparison, generation from natural gas is
expected to peak at approximately 21% in 2018 before slowly
Table of Contents
declining. The following chart shows U.S. electricity
generation by fuel source from 1980 through 2007 and the
projected generation through 2030:
The Coal Industry Global Coal Supply and Demand. Because of its availability, stability and affordability, coal is a major contributor to the global energy supply, providing approximately 40% of the world’s electricity, according to the World Coal Institute, which we refer to as the WCI. Coal is also used in producing approximately 64% of the world’s steel supply, according to the WCI. Coal reserves can be found in almost every country in the world, and approximately 50 countries are currently mining coal. Coal is traded worldwide and can be transported to demand centers by ship and by rail. Worldwide coal production approximated 5.9 billion tons in 2006 and 5.4 billion tons in 2005, according to the WCI. China produces more coal than any other country in the world. Historically, Australia has been the world’s largest coal exporter, exporting more than 200 million tons in each of the last three years, according to the WCI. China, Indonesia and South Africa have also historically been significant exporters in the global coal markets, however, growing demand in China has resulted in declining coal exports and increasing coal imports. These trends have caused China to become a less significant seaborne coal supply source. In 2007, coal supply from other regions was similarly affected because of mine disruptions, train derailments and port congestion. Growing demand for coal for power generation in many Asian countries has begun to strain global coal supplies. Seaborne coal trade increased 4.6% to approximately 806.9 million metric tons in 2007, according to SSY Consultancy & Research, Ltd. Seaborne trade into Asia increased approximately 9.1%, while European trade decreased approximately 4.3%. Demand in China is expected to grow rapidly, as the demand for electricity and the need for steel used in construction and automobile production increase. U.S. Coal Consumption. In the United States, coal is used primarily by power plants to generate electricity, by steel companies to produce coke for use in blast furnaces and by a variety of industrial users to heat and power foundries, cement plants, paper mills, chemical plants and other manufacturing and processing facilities. Coal consumption in the United States has increased from 398.1 million tons in 1960 to approximately 1.2 billion tons in 2007, based on information provided by the Energy Information Administration, which we refer to as the EIA. Throughout the United States, coal has long been favored as a fuel to produce electricity because of its cost advantage and its availability. Since 1970, the use of coal to generate electricity in the United States has nearly tripled in response to growing electricity demand. According to the EIA, coal accounted for approximately 50% of U.S. electricity generation in 2007 and is projected to account for approximately 55% in 2030. By comparison, generation from natural gas is expected to peak at approximately 21% in 2018 before slowly
Table of Contentsdeclining. The following chart shows U.S. electricity generation by fuel source from 1980 through 2007 and the projected generation through 2030: | EXCERPTS ON THIS PAGE:
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