US coal production in 2008 will be near the record set in 2006, defying a slowing economy, said the National Mining Association (NMA) in its annual forecast for coal. NMA also forecast record demand in 2008 for America’s coal reserves, the world’s largest, and projected continued strong demand for minerals and metals mined in the USA.
The 1.16 billion short tons (1,052 Mt) of production NMA forecasts for 2008 tops the 1.147 billion short tons mined in 2007 and is just 2 million short tons shy of the 2006 production record. NMA’s forecast for coal is based on projections reported from the association’s member companies.
“Last year the nation had more coal-based power plant capacity than in any year in this decade,” said NMA President and CEO Kraig R. In addition, another 24 coal-based plants are under construction, and as of October 2007, there were an additional 10 GW of coal-based plants or units near construction or are already in the permit phase, ensuring coal will maintain its current 50% share of the growing market for electricity generation. Two coal plants are projected to come on line in 2008, following the addition of three plants in 2007.
NMA expects coal production in the Eastern US this year to remain flat at 435 Mt, while Western production will likely increase to 617 Mt, a 2.1% gain over the 2007 level.
The projected record-breaking coal demand of 1,097 Mt will surpass last year’s 1,083 Mt mark. A 1.3-1.7% increase in total electricity demand and another strong year for exports, fueled by a weak dollar and strong offshore demand for metallurgical and steam coal, will drive coal demand in 2008.
NMA says its 2008 export projection of 64 million tons is conservative, especially for high-grade met coal. Coal imports will remain flat at 33.1 Mt in 2008 after rising sharply over recent years, said NMA. Meanwhile, coal inventories at US power plants will approach optimum levels in 2008 following two successive years of sharp build ups.
Based on a variety of public and private forecasts, NMA anticipates increased production from US minerals and metals mining owing to continuing demand in China and to a lesser extent in India and other developing economies. This is despite an increase in global production capacity for most metals and minerals in the past two years.
Copper production in the US is expected to grow slowly in 2008 from the 1.25 Mt mined in 2007, the highest level since 2001. Global demand for refined copper is forecast to rise by 5.9% this year, following 5.2% growth in 2007. Copper production worldwide is expected to balance demand in 2008 due to increases in capacity primarily outside the US.
Gold mining production is again expected to be strong throughout the world in 2008, driven by a combination of factors, including political unrest, financial instability, growing fears of inflation and a weak dollar, that favour gold as an investment. Mine production increased on a global basis in 2007, and most analysts expect modest gains in 2008. The US Geological Survey estimates that gold production totaled 248 t in 2006. Given data through September, gold production in 2007 should be at the same level. “Production in the US in 2008 will be flat with some small upside potential,” the NMA predicts.
Other metals, including nickel, lead, zinc and iron ore, will continue to be in demand by rapidly industrialising countries in 2008, according to most analysts.
“Our forecast reflects the powerful underlying conditions that are continuing to drive up coal and mineral demand,” said Naasz. “The abundance of these commodities in the US makes them especially valuable in a global economy driven by strong growth in large, rapidly developing countries.”