Supply costs for internationally traded coal
AUTHOR: Paul Baruya
DATE: July 2007
Historically, the world price of steam coal has been based on the cost of producing coal, but with the rise in prices to near record levels in recent years, cash profits have returned to the business. However, producers are facing rising operating costs as the costs of labour and materials are rising.
Relatively little is known about the cost of producing coal, and what is known is typically privy to the companies or specialist consultancies which have in depth knowledge of mining and operations. This report aims to gather the data that is available in the public domain and help to explain some of the underlying fundamentals that make up the cost of coal, from mining operations, through to the inland transport, port and seaborne shipments.
More coal is exported and traded by sea now than at any other point in history, and as the business continues to grow the costs and prices of these supplies will influence the price of coal around the world.