CEOs: Third World thirst to boost coal
The coal industry rebounded from the global recession and is poised to ride developing countries’ thirst for steel and energy production for decades to come, said industry analysts and CEOs of energy producers Tuesday at the 14th annual Met Coke World Summit, Downtown.
“Coal is the fuel for the entire world,” said J. Brett Harvey, CEO of Cecil-based Consol Energy Inc. “I don’t see any change in that for the next 50 years.”
Consol projects shipping more than 700,000 tons of coal from the United States to China in the fourth quarter.
Harvey; Don Blankenship, CEO of Richmond, Va.-based Massey Energy Co.; Michael Thomson, CEO of Knoxville, Tenn.-based SunCoke Energy; and John Elmore, director of Jindal Steel and Power Ltd. in India, talked about trends in the industry at an event attended by about 250 coal industry insiders. The summit continues today.
Blankenship agreed that coal is the fuel of the present and the future, particularly in developing countries. Access to electricity improves quality of life and leads to longer life expectancy, he said.
“It’s strange that that idea hasn’t caught on,” he told the audience, eliciting a round of laughter.
The Massey CEO predicted coal use will increase by 81 percent in “emerging” countries and 1 percent in developed countries by 2035. Brazil, Russia, India and China, which make up 43 percent of the world’s population, will account for much of that growth, he said.
Coal is “good for the environment” because it is the cheapest way to raise living standards by providing electricity to poor countries, Blankenship said.
“It bothers me that we are spending so much on renewable energy that supposedly will improve the environment when there is a lot of suffering going on,” he said after his presentation.
China, India and Brazil will continue to be major importers of coal, particularly metallurgical coal for production of coke and steel, the CEOs said. Brazil, which will host the soccer World Cup in 2014 and the Summer Olympics in 2016, has limited resources but a strong economy. Its need to build infrastructure quickly makes it a major player, they agreed.
“The same thing happened in China (before it hosted the 2008 Olympics), but it just kept going,” Harvey said. “They are raising their standard of living. We could see the same thing in Brazil. Maybe not on the same pace, but once they get a taste of it …”
The auto industry’s rising thirst for steel also drives coal use, the CEOs said.
Particularly in China, car production is soaring with plenty of room to grow, Blankenship said, noting that 128 people out of every 1,000 people in China own cars, compared to 765 out of 1,000 in the United States. China last year produced 13.3 million vehicles, compared to 8.8 million in North America, the Massey CEO said.
Africa will become a major importer of coal as the country begins to modernize, Harvey and Blankenship said.
Blankenship declined to answer questions regarding a possible sale of Massey or whether he might step down. In a conference call with analysts last week, he acknowledged the rumors, saying Massey is “considering all options,” but declined to discuss specifics.
Massey runs the Upper Big Branch mine in Montcoal, W.Va., where an April 5 explosion killed 29 miners and injured two. It was the deadliest U.S. mine disaster in 40 years. State, federal and company investigations are ongoing.