Uses of Coal are increasing as an alternative in the ongoing energy crisis
Global coal demand rose 11-fold within four months of the Ukraine war. Coal is said to be the most polluting fossil fuel. Ironically, the world leaders talked about various initiatives a year ago to stop coal use completely. Many countries have been looking for that coal, and the price is increasing.
Until late last year, few ships passed through the East African country of Tanzania’s Matwara port. There was no busyness. Cashew nuts have been mainly shipped through that port.
However, after the start of the Ukraine war, the port scene completely changed. It was as if the sleepy harbor had suddenly become fully awake. Coal-laden ships are leaving Matwara port one after another.
The Western world imposed an embargo on all types of Russian energy as punishment when Russian forces launched an invasion of Ukraine last February.
As a result, Russia’s fuel supply to the world market has cut off, and fuel prices have risen to record highs, negatively impacting the whole world.
In particular, Europe, dependent on Russian gas and coal, is in the greatest danger. European countries are now trying to procure energy products from other countries to meet the demand.
Tanzania has so far mainly exported thermal coal to neighboring countries in East Africa. Until now, the Tanzanian government could not even consider exporting coal outside the neighboring countries.
Because they have to travel more than six hundred kilometers by road to bring coal from the mines in the southwest of the country to the nearest port, Matwara, Tanzania’s Matwara port is on the Indian Ocean.
Thermal coal uses to generate electricity. Due to the lack of energy, the entire world is now in a power generation crisis. As a result, the demand for coal has increased. Thermal coal prices rose to record highs due to the Ukraine war.
Buyers in Europe and other countries are now willing to buy coal from relatively remote coal mines in countries such as Tanzania, Botswana, and even Madagascar. This resurgence in coal demand is entirely at odds with the climate plan made even a year ago.
Governments of various countries are now seeking to free themselves from dependence on Russian energy. Meanwhile, it is also trying to rein in the rising price of electricity. That is why they are again forced to go back to the use of fossil fuels which pollute the environment the most.
John Dieleman, president of Cargill’s shipping division, said, “Europe is now competing with other buyers. Alternative fuel gas has become much more expensive.
Europe must now find a source of coal, and we will soon see more coal ships to Europe from Colombia, South Africa, and even further afield.”
However, the geopolitical situation can change at any time. As a result, the demand for coal increases, and the opportunity to sell it at higher prices may not last long.
Still, the coal-rich countries see this as a perfect opportunity for them, a chance they do not want to miss.
Increased demand and tight supply have reopened the coal trade. According to data from Bremer Research, global demand and supply of fossil fuels reached record highs last July.
The European Union now imports thermal coal from Australia, South Africa, and Indonesia. Previously those were going to the Asian market. Global coal demand rose 11-fold in the fourth month since Russia’s invasion of Ukraine began.
