How Europe expands the geography of its coal imports in light of the energy crisis

Published:

20 Sep 2022 16:05 GMT

In its aspiration to give up Russian energy, the EU buys coal in distant countries in Africa or South America, changing the logistics of the market

European countries, to reduce fuel purchases from Russia, are acquiring more coal in African and South American countries, as well as in Australia, communicates Reuters this Tuesday.

“European actors, after the Russian war [en Ucrania]They go to any place where the coal is found,” said Rizwan Ahmed, CEO of the mining company Bluesky Minings, from Tanzania. “They offer to pay a good amount,” he added. It should be noted that, according to Reuters reports, another Tanzanian company , Ruvuma Coal, has already supplied 400,000 tons of coal globally since November 2021, with some of its main buyers being France and the Netherlands.

The main supplier of coal to European countries until now was Russia, which typically provided around 70% of the EU’s thermal coal. However, after the start of the military operation in Ukraine, the EU hopes to redirect its imports by increasing purchases of thermal coal by 1,000% in Australia, South Africa and Indonesia, according to data from the Indian consultancy Coalmint released by Reuters.

The commodity broker Cargill also notes the global growth in maritime shipments of coal, whose volume has been nine million tons between June and August compared to seven million last year. “Europe must be able to source coal, and we will see strong flows to Europe from Colombia, South Africa and further afield,” said Cargill’s Transportation chairman Jan Dieleman.

Meanwhile, on September 16, the price of coal from the Australian port of Newcastle, which is used as a global benchmark, reached $429 per tonne compared with $176 a year ago. In July, global coal consumption reached its historical maximum, 97.8 million tons. In August it fell to 89 million tons due to Australia’s export problems.

The prominence that these coal exporting countries are acquiring in the market can benefit States with a developed port infrastructure that facilitates the transport of this energy resource. For example, Minergy, the Botswana mining company, uses the port of Maputo, the capital of Mozambique, to export coal. Madagascar may also “start exporting coal for the first time in its history,” said Prince Nyati, CEO of one of the country’s mining companies.