Metallurgical Coal

Metallurgical Coal

Metallurgical Coal

Metallurgical coal, also known as coking or steelmaking coal, or simply “met coal”, is a carbon-rich, black sedimentary rock with high density, hardness, porosity and reflectivity. More than 70% of global steel production is from iron produced in blast furnaces, using coke derived from metallurgical coal, with an average of approximately 780 kg of metallurgical coal needed to produce 1,000 kg of steel. 1

Coal deposits are widely spread across the planet with many countries possessing very large reserves of various kinds of coal. China produces more than half of the world’s metallurgical coal, with Australia being the next largest producer, extracting approximately a fifth of global volumes in 2020.3 The market prices of all forms of coal have increased considerably since 2021, peaking at quadruple the pre-2021 prices in the middle of 2022; however, prices began to fall again in the beginning of 2023. Demand increases have played a role in price rises, particularly due to European countries’ efforts to secure supplies of thermal coal for power generation, to reduce dependency on Russian gas imports following the start of the Russia-Ukraine war.4

In terms of ESG risks, metallurgical coal is most strongly associated with a large carbon footprint when used for coke in blast furnaces in steelmaking, which is critical to many industries and contributes more greenhouse gas emissions than any other form of metal processing. Additionally, localised air pollution during coal extraction, combustion and conversion to coke is known to increase the prevalence of potentially fatal respiratory illnesses in coal workers and local communities.5

Main Uses and Attributes

Coal can be categorised in a multitude of different ways, one of which is based on carbon content. In decreasing order of carbon content, the four main kinds of coal are: anthracite; bituminous coal; sub-bituminous coal and lignite. More practically, coal types can be defined based on their end uses as thermal coal for heat and power generation, or as metallurgical coal.

Thermal coal is burnt in order to generate electricity and is most commonly sub-bituminous and lignite coals, whereas coking coal is primarily used for smelting in metallurgical furnaces and is typically composed of higher carbon anthracite and bituminous coals. Coals with higher carbon contents are also used as thermal coal for household heating, although are typically more expensive than conventional thermal coals .6

Coking coals can be used to produce coke by anaerobically heating coal to very high temperatures so that many of its impurities can be removed without undergoing combustion, producing a carbon-rich coke residue. Coking coals also exhibit a ‘caking’ ability through which they form a solid, coherent residue in oxygen-poor, high temperature conditions, whereas other coals will tend to form powdery residues not suitable for coke production.[GL4] [AM5]  Coke is then used to reduce iron ore into pig iron, which is an essential step in the steelmaking process. 7

Over 90% of the coking coal consumed in the EU is used for smelting iron ore to produce steel, with comparatively small amounts used in furnaces to produce ferro-chromium, ferro-manganese or other base metals. Coke can also be utilised in the manufacture of carbon electrodes that are deployed in metallurgical processes9 Additionally, some by-products of the coking process can be used to develop a variety of materials, including pesticides, chemical products such as tar, carbon fibres for lightweight products, and even certain medicines.10

Main Uses

  • Cars
  • Machinery and Equipment
  • Metal Alloys
  • Steel

Key Industries

  • Automotive
  • Construction
  • Renewable energy
  • Steel Making
  • Transportation

Key Countries

Top Producer China
Top Reserves United States of America

Supply Chain Risk

TDi assesses Metallurgical Coal for key risks affecting the security of supply, and for its association with artisanal and small-scale mining.

Overall Supply Chain Resilience Risk
Strength of Association with ASM
Very Low Moderate Very High

Country Governance Risks

Metallurgical Coal's association with countries experiencing:

Violence and Conflict
Weak Rule of Law
Poor Human Rights
Poor Environmental Governance
Very Low Moderate Very High

Association with ESG issues

TDi Sustainability's data rates Metallurgical Coal's association with the following issues as high or very high:

Very Low Moderate Very High

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