This month’s edition of Coal Age is packed with good news. Readers should note in Leading Developments that Bravus Mining and Resources has started mining coal at the Carmichael mine in Queensland, Australia. This is the culmination of a 10-year effort by the Adani Group to open a major coal mining operation that will employ more Australian miners and meet a portion of India’s energy needs for years to come. Good on you, Bravus. Congratulations!

In that same section, Coal Age highlights Coronado Global Resources shipping U.S. met coal to China. That’s a statement unto itself. A year ago, production was suspended at the Buchanan mine, one of the deepest longwall mines in America. Today, the mine is ramping up production after the company completed a longwall move and an upgrade at the prep plant.

For the longest time, the met market seemed to be the only hope remaining for many U.S. coal operators. Several major U.S. coal producers reoriented themselves to become mostly met coal producers, shedding thermal production assets or minimizing their exposure to power markets. More recently, however, the fundamentals for coal-fired power generation have improved.

Alliance Resource Partners President and CEO Joe Craft recently mentioned some of these market changes while discussing the company’s second-quarter results (See U.S. News, p. 10.). “In the primary U.S. markets, coal-fired generation surged in response to a 7.5% year-over-year increase in power demand through the first half of 2021 and soaring natural gas prices,” he said. He also mentioned that API-2 spot prices recently hit a 13-year high of $131/metric ton. That’s the benchmark for coal imported into northwestern Europe.

The national statistics from the Energy Information Administration (EIA) indicated the same. At the end of July, year-to-date U.S. production currently stood at nearly 332 million tons, an 11.2% increase over the same period last year. Domestic spot prices for U.S. thermal coals currently stand at a respectable level as well.

The global economic recovery and a dramatic increase in natural gas prices jump-started coal markets and the momentum is building. For now, it appears spot prices for natural gas will remain north of $3.50 per million Btu and as high as $4 per million Btu, which is nearly double the cost of coal-fired power. Once known as “clean-burning,” natural gas has been labeled as the less dirty fossil fuel by the environmental groups it curried favor with to the detriment of coal, which somewhat levels the playing field.

Aside from power, many nations, including the U.S., are talking about infrastructure programs. These programs require steel, which will only be a boost for metallurgical-grade coals. Let’s make hay while the sun shines. Enjoy this edition of Coal Age.