India has been flagged as the market with the greatest potential for Australia's thermal coal, as the country continues its consumption of the commodity in order to meet increasing energy requirements.
The potential of the Indian market was revealed in the office of the chief economist's Coal in India 2019 report, which examines the future of thermal coal in India, its future import requirements and implications for Australian exporters.
As the world's third largest energy consumer and second largest thermal coal importer, India stands as an appealing market for Australian companies, according to Minister for Resources Matt Canavan.
"There is no market in the world that has as much potential for increased trade with Australia as India. This report clearly illustrates that potential," Canavan said.
"Australia is already a strong and reliable energy partner for India as it continues its rapid development trajectory and brings its people out of poverty. We can grow this relationship further."
Canavan said the report found India's coal consumption was likely to continue increasing over the next decade, and possibly beyond, to meet India's growing energy needs.
"India is a large coal producer and its domestic production is growing. Australian coal is a perfect complement, not a replacement, for Indian coal. We specialise in a high quality coal that can be easily blended with Indian coal to produce better outcomes for all," he said.
"There is also room for us to boost our exports of metallurgical coal to India as their steel sector continues to grow."
The growth of India's energy sector has been significant. Since 2000, more than 500 million people have received access to electricity, with coal providing around 44% of India's energy mix.
However, in 2017, there was still 168 million people living in India with no access to electricity, equating to almost seven times the population of Australia.
"If we could lift our thermal coal exports to India to the same market share we currently have with China – to just under 25% of their imports – we could export an additional 37 million tonnes of high energy, low ash thermal coal," Canavan said.
"That is the equivalent of three or four new Adani Carmichael–sized coal mines. If this investment occurred in the Galilee Basin, it would open up a new, sustainably-sized coal basin in Queensland."
Canavan estimated that based on current average prices in 2019, this would deliver an extra $3.4 billion in export income and also potentially create upwards of 4000 new jobs for Australian in the coal sector.
(Writing by Tammy Yang Editing by Harry Huo)
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