Market Snapshot: Canadian Coal Production Continues to Decline

Release date: 2018-09-05

Canadian coal production has continued its downward trend since the National Energy Board’s previous market snapshot on coal, released last year. Production declined approximately 2.3%, from 61.5 million tonnes (MT) in 2016 to 60 MT in 2017. Coal production in 2017 is 24% lower than it was at its height in 1997.

Source and Description

Source: Statistics Canada and NEB’s Energy Futures 2017.

Description: The chart shows total Canadian coal production. The data from 1946 to 2017 comes from production reported by Statistics Canada. Data from 2018 to 2040 comes from the NEB’s Energy Futures 2017 projections. Production in 1946 was 16 MT and reached a peak of 78 MT in 1997. Production in 2017 was 60 MT.

Coal produced in Canada is divided in two categories: thermal and metallurgical, each representing about half of total production. Thermal coal is almost entirely used domestically in electric power generation. Any thermal coal that is surplus to power generation is exported. Metallurgical coal is converted into coke for use as an input in the steel-making process.Footnote 1 The majority of Canadian metallurgical coal is exported to Asia through the Port of Vancouver; the remainder is used by domestic iron and steel-makers.

Total coal production is expected to decline to 34.3 MT by 2040. This would be primarily caused by lower thermal coal production resulting from provincial and federal commitments to phase out the use of coal in power generation. On the other hand, production of metallurgical coal is expected to increase slightly. Continued development and population growth in the Asian-Pacific regions are expected to increase future demand for metallurgical coal. Given Canada’s reserves of quality metallurgical coal and its proximity to the Asian-Pacific market, it is in a position to capture a portion of the increasing demand from the Asian-Pacific region.

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