Coal mining and production have some dangerous effects on the environment. Renewable energy is coming into the picture slowly, but till today coal stands at the top for producing energy.
The world is facing severe climate changes. Temperatures are not stable, glaciers are melting, and rivers are drying up, and still, it’s the best time to make a profit by coal mining.
The energy market is facing challenges after the Russia-Ukraine conflict. This has led to high consumption of the most-polluting energy source- Coal. The world is now more dependent on coal due to rising fuel crises. The demand for coal is expanding, and prices have reached all-time highs, this means extraordinary gains for the biggest coal producers.
Number one producer Coal India Ltd’s made nearly triple the usual profit and set a new record. The Chinese coal companies, producing more than half of the world’s coal, saw their profits surge more than double to an aggregate of $80 billion.
Glencore Plc, a commodities giant, stated that total earnings from its coal unit reached up to $8.9 billion, almost 900% in the first half, which is more than what big brands like Nike Inc. and Starbucks Corp. made in an entire year. Glencore has broken its profit record for coal production of so many years in just six months.
The number of profits received by coal production has been extraordinary and investments are now rising day by day.
As the requirement for coal is rising, producers are focusing on increasing production and investment in the mining sector to make more profits. But the concern is if the producers keep on mining and burning up the coal for the use of fuel, it would make everyone dependent on coal that the renewable energy sources will be forgotten and global warming will increase.
Recently many steps were taken to stop coal mining and look for alternatives to energy sources. Renewable sources of energy like solar energy, wind energy, hydropower, geothermal energy, biomass, etc, were making the world shift to cleaner fuels to stop global warming. Almost every country agreed to end the use and production of coal.
This increase in demand for coal has been a huge turnaround for coal producers and simultaneously production has also increased. This industry was going through existential crises and suddenly is gaining a fortune. Lack of investment in this industry has hampered the supply, and the demand is at an all-time high which is very profitable for the producers.
One of the largest consumers of fuel, Europe has cut off ties with Russian imports and has started importing alternatives like coal and liquified natural gas. As a result, coal prices at Australia’s Newcastle port went uphill to a record in July 2022.
According to Arch Resources Inc. and Peabody Energy Corporation, the biggest miners in the US say that the demand is so high in Europe that most of the European countries are buying high-quality fuel which is usually used to make steel to produce electricity instead.
Adani Enterprises Limited, owned by Gautam Adani, Asia’s richest man, has rushed to secure cargo import due to squeezed local supply. The revenue generated by the company has increased by 200% in just three months due to high coal prices.
Coal is still a cheap and reliable source of power, especially in many developing nations. Despite the introduction and promotion of renewable energy, almost 35% of the world’s electricity comes from burning coal.
Last year at a UN conference in Glasgow, developing countries like India and China came together to seek a “phase down” instead of a “phase out” of coal use.
As western coal producers are earning a fortune, top coal consumers, India, and China are still focusing on the growth of their nations rather than profit and global warming. The Chinese government has ordered its industry to increase coal production by 300 million tons this year and Indian coal producers are investing a large sum of their profits back into developing mines as pressure from the government increases.
Some time back, it was becoming difficult for coal developers to produce and supply any large amount of coal and gain profit as countries were shifting to renewable energy, and there was a constant backlash from climate activists. But now, the industry is going in a direction no one thought of a few years back.
As we look back, even the largest mining companies like Glencore were pulling back from coal production as the profits were not worth it. Today, as the market will remain tight for some time, profits will keep coming in. According to Glencore Chief Executive Officer Gary Nagle, these energy crises don’t seem to go away for a long time.
edited and proofread by nikita sharma