Significant changes are afoot in the dynamics of the coal industry, with demand for imports of both coking and thermal coal from India and China underpinning growth in the seaborne coal market in this region and Australian export coal in particular.

Australia’s exports of coal are projected by the Australian Bureau of Agricultural and Resource Economics (ABARE) to increase substantially in the medium term.
 
Based on reports issued by AME Mineral Economics the total world demand for metallurgical coal in 2006 was more than 680 million tonnes. By 2013, global coking coal consumption is forecast by BMO Capital Markets (BMO) to jump to just under a billion tonnes and world marketed energy use for coal is estimated by the US Energy Information Administration to reach 150.8 Quadrillion British Thermal Units (Btu) by the same year .
 
The current demand for metallurgical coal to supply steel mills is strong and the world outlook is bright.

As global steel production continues to rise, international trade in metallurgical coal is set to grow strongly at double the rate of the last 10 years. The major driver of the projected higher demand rates will increasingly be the inability of India and even China to service their total coking coal requirements from domestic production.

As a leading stable and reliable world source of metallurgical coals, Australia will play a major supply role to key markets. In this environment the discovery of new sources of metallurgical coal by Tiaro Coal would provide a valuable new source of supply in a world where there is increasing demand for premium coals.

In the absence of national policies and/or binding international agreements that would limit or reduce greenhouse gas emissions, world coal consumption is projected to increase from 123 quadrillion Btu in 2005 to 202 quadrillion Btu in 2030, at an average annual rate of 2.0 percent. Coal’s share of world energy use has increased sharply over the past few years, largely because of strong increases in coal use in China, which has nearly doubled since 2000 and is poised to increase strongly in the future. With its large domestic base of coal resources and continuing strong economic growth, China alone accounts for 71 percent of the increase in world coal consumption in the International Economic Outlook 2008 reference case.

While China is the largest metallurgical coal user, Japan, Korea, Europe, India and Latin America drive seaborne demand, which comprises roughly 30% of total global metallurgical coal demand.

By 2013, global coking coal consumption is forecast to jump to just under a billion tonnes. Production must expand at least 215 Mt from 2007 levels to balance the market, according to BMO's analysis.