The accepted wisdom is that by 2130 the world will have exhausted all available supplies of coal, or sooner if demand increases by 50 per cent in the next 20 years as the International Energy Agency predicts. However, according to our miners, coal's immediate future is even less certain.
Recently Australian Prime Minister Tony Abbott addressed the Asia Society Texas Centre in Houston, USA, telling the assembled audience: "For many decades at least coal will continue to fuel human progress as an affordable, dependable energy source for wealthy and developing countries alike."
It was an understandably bullish statement from Mr Abbott given coal's importance to the Australian economy. Coal stands as our second largest export by value behind only iron ore, and is forecast to contribute $40 billion in export earnings to our balance of trade this year.
On top of which our local coal sector supports 200,000 jobs, pays $5 billion in wages and some $4 billion in royalties each year. Australians need coal in many more ways than simply as an energy source.
However, the Prime Minister's enthusiasm isn't entirely shared by the chief executives of Australia's largest coal miners – Glencore, BHP Billiton, Rio Tinto, Anglo American and Peabody – who have all been tightening their belts, slashing jobs and winding back or shutting operations as the mining boom slows and coal prices go into freefall.
Feeling the pinch
Ten thousand coal mining jobs have gone in the past two years, and cuts are continuing. Peabody revealed it was considering shutting down more local mines following previous job cuts and mine closures in recent years.
Last month Glencore Xstrata announced that its Newlands underground coal mine in central Queensland would close with the loss of almost 200 jobs by the end of next year. Also in May Integra announced it was suspending work at two mines in New South Wales.
Earlier this month, Whitehaven Coal said it was cutting jobs at its coal handling and preparation plant at Gunnedah in response to market conditions. The list goes on.
Speaking at a recent Committee for Economic Development of Australia (CEDA) energy and resources event, President of BHP Billiton's global coal business, Dean Dalla Valle, said productivity improvements, cost reductions and a high-performing culture were needed if Australia was to ensure a long-term sustainable coal export industry.
"We are the largest coal miner in Queensland and a major contributor to the Queensland economy. Our business has the equipment, technology, infrastructure and expertise to operate our mines more safely and efficiently than ever before," Dalla Valle said.
"Over the past 18 months we have focused on our cost base throughout our operations. There is still more we need to do as we look for ways to improve the productivity and competitiveness of our mines."
Harry Kenyon-Slaney, Chief Executive of Rio Tinto Energy, said the industry faced a host of challenges, not just lower prices, but also a strong Australian dollar, increased regulation, delays in government approvals and community opposition to mining.
"Undoubtedly the role of coal, as a cheap and plentiful source of fuel, will be critical in meeting the world's future energy demands," Kenyon-Slaney said.
"There are however, global challenges we face – energy access, energy security, affordability of energy and reducing emissions, all require us to work together. The coal industry needs to be united, constructive and engaged in major energy policy discussions."
Crisis of confidence
The sentiments of the major miners was given further weight when PricewaterhouseCoopers (PwC) released its 11th annual report on the global mining industry earlier this month, which found the profits of the world's 40 biggest mining companies had plunged 72 per cent despite embracing radical measures and strategies to improve the industry's long term position.
PwC's report, Mine 2014: Realigning Expectations, found overall costs rose 4 per cent, net debt soared 42 per cent to and revenues inched up just 1 per cent.
PwC Australia's Energy, Utilities and Mining leader Jock O'Callaghan said the pace of change was unprecedented, and while many hoped the industry had reached rock bottom it was too hard to call whether conditions were poised to improve or would continue to bounce along the bottom.
"There's no doubt the industry has moved fast to counter its sudden change in fortune: fleets were parked, jobs slashed, development projects deferred - every dollar spent requires care and consideration," O'Callaghan said.
"These are the sorts of traditional levers just about every mining company in the world has employed at some point in recent years, but they are ultimately unsustainable and they simply won't support growth."
O'Callaghan said there now needed to be an intrinsic strategic shift because the fundamentals of the industry were still strong.
"This can be seen in a focus on simpler structures, a bid to boost returns from higher quality assets, a willingness to share critical infrastructure and a concerted effort to improve productivity levels, which remain way too low," he said.
"Many miners from traditional markets are talking about reducing costs and, in some instances, heralding increased production volumes under the broad banner of productivity gains but many are still executing a strategy at their mines which is effectively the same as during the boom."
What for the future?
Paradoxically while the short term future of the coal industry is difficult, longer term it's not time to write off coal just yet.
In the Bureau of Resources & Energy Economics' (BREE) report Australian Energy Projections 2049-50, coal and gas are expected to provide 96 per cent of Australia's energy production in 2050, with an increasing proportion for the export market.
Further while coal's share of total electricity generation is projected to fall to 13 per cent by 2050, electricity generation as a whole is set to grow by a whopping 49 per cent.
In its bi-annual overview of resources and energy projects, BREE identified 153 mining and related infrastructure projects under feasibility examination with a combined value of about $146 billion.
Of those projects, there are 50 new coal developments under examination with a combined value of $54 billion, more than any other commodity.
Or as Kernot Professor of Engineering at the University of Melbourne Professor Robin Batterham says, the dominance of coal is here for some time to come.
Professor Batterham is also former Chief Scientist of Australia, as well as the former Chief Technologist for Rio Tinto, and while he might be accused of being pro-coal, he also knows what he's talking about.
He points to predictions made by international think tank and centre of innovation, The Club of Rome, back in 1972 before we write off coal's future.
"The Club of Rome in 1972 got it right when they suggested that the future of the world would be very dependent on energy," Professor Batterham said.
"They got it wrong, however, in predicting the end of oil in 1992 and gas in 1994.
"We still have to wait on their 2083 coal prediction."