Asian steel stokes coal boom

Like oil, coal, too, is enjoying the nickname “black gold,” thanks to soaring prices.

Shares of coal producers have continued to climb on rising demand for their commodity from Asian steel makers and supply hiccups from countries such as Australia, China and South Africa.
The Stowe Global Coal Index, which tracks companies that make more than half their revenue from the coal industry, has shot up 100 per cent over the past year. And the boom times are not over, market observers say.

Supply problems have plagued not only coking coal – a metallurgical coal used to make steel – but also thermal coal, or “steam coal,” used to produce electricity.

“That is what is triggering the very high prices,” said Patricia Mohr, vice-president and commodity market specialist at Bank of Nova Scotia.

Elk Valley Coal Partnership, the world’s second largest producer of coking coal, which is co-owned by Calgary’s Fording Canadian Coal Trust and Vancouver-based Teck Cominco Ltd., is planning to expand to take advantage of high prices, Ms. Mohr said.

And those dollar signs are also spurring U.S. coal miners such as PBS Coals Inc. and Phoenix Coal Inc. to look to go public soon in Canada, The Globe and Mail reported yesterday.

Globe and Mail