Coal is the world's most abundant and widely distributed fossil fuel and possibly the least understood in terms of its importance to the world's economy. Currently, about five billion tons are mined in more than 40 countries. In Canada alone, coal produced was valued in 1996 at $1.9 billion. In spite of considerable publicity and push towards "clean-fuels," coal continues to be second only to oil in meeting the world's energy needs. An estimate of 4.4 billion tons will be required annually by the year 2005 just to generate electricity.

As with some metals, coal provinces (clustering of deposits in one area) occur in regional sedimentary structures referred to as coal basins. More than 2,000 sedimentary, coal-bearing basins have been identified worldwide but less than a dozen contain reserves of more than 200 billion tons.

Although the majority of mined coal continues to be consumed within the country of production, the value of traded coal is increasing. The U.S.A. and Australia account for about 50 percent of world coal exports. This figure increases to 70 percent if exports from South Africa and Indonesia are included. Japan is the largest recipient of exported coal - fully 25 percent of world trade - and as such, Japan's agreements with coal suppliers greatly influence the world coal price. Japan, Taiwan and South Korea together import about 45 percent of all exports and the European Union accounts for another 30 percent .

Coal use is concentrated on power utility markets and the steel industry. Coal has had a long history of being a primary energy source and still accounts for significantly larger reserve base than either of oil or gas. As one example, coal in the U.S.A. still accounts for over 50 percent of the country's electric generating industry requirements, all from domestic production. The European Union, on the other hand, must import fully one-half of its energy requirements (in the form of oil, gas, uranium and coal).

Production of steel accounts for the second largest use of coal. Minor uses include cement manufacture, the pulp and paper industry, and production of a wide range of other products (such as coal tars and chemicals).

As with industrial minerals, the physical and chemical properties of coal beds are as important in marketing a deposit as the grade. The simple percent age of carbon (gases and sulfur) is not sufficient to determine what an individual coal seam might be used for. The differences in the kinds of plant materials (called maceral) comprising the bed of coal (referred to as type), the degree of metamorphism (rank) and range of impurities (grade) are used in classifying coal deposits. Coal rank is particularly important as the amount of fixed carbon, percent age of volatiles and moisture in coal provides a measure of the BTUs of energy that are available.

Production of coal is both by underground and open pit mining. Surface, large-scale coal operations are a relatively recent development, commencing as late as the 1970s. Underground mining of coal seams presents many of the same problems as mining of other bedded mineral deposits, together with some problems unique to coal. Current general mining practices includes coal seams that are contained in beds thicker than 27 inches and at depths less than 1,000 feet. Roughly 90 percent of all known coal seams fall outside of these dimensions and are, therefore, not presently economical to mine. Present coal mine technology in the U.S.A., for instance, has only 220 billion tons of measured proven recoverable reserves out of an estimated total resource of three to six trillion tons.

Problems specific to coal mining include the fact that coal seams typically to occur within sedimentary structures of relatively moderate to low strengths. The control of these host rocks surrounding the coal seams makes excavation in underground mining a much more formidable task than that in hard, igneous rocks in many metal mines. Another problem is that coal beds can be relatively flat-lying, resulting in workings that extend a long distance from the shaft or adit portals. Haulage of large tonnages of coal over considerable distance, sometimes miles, is expensive. Finally, most seams give off varying quantities of methane gas during the course of mining. Methane gas, when mixed with air, can be explosive. Coal, being largely composed of carbonaceous material can also catch fire, in some cases spontaneously. Coal, for the miner, has not been an attractive occupation. Interestingly though, the problem of methane, may in the future become a profitable byproduct from closed coals mines. Canada, for instance, is reported to have about 210 trillion cubic meters of coal bed methane trapped in Nova Scotia's abandoned coal mines.

As coal contains both organic and inorganic components, run-of-mine coal contains both these components in varying amounts. In many instances coal beneficiation is required to reduce the inorganic matter (ash) so that a consistent product can be more easily marketed. Most coal beneficiation consists of crushing in order to separate out some of the higher ash content, or washing that exploits the difference in density between maceral and inorganic matter.

Because of the abundance of coals and large number of known coal deposits that have not yet been developed, exploration for new and major coalfields by the junior mining sector is relatively rare. Large companies, including Peabody, Cyprus-Amax Coal, Consol, Arco Coal, Zieger, Luscar and Fording Coal dominate coal production in North America. Small players such as Hillsborough, a Vancouver based junior, have penetrated the market and become producers. Potential economic production of gas from abandoned coal mines may attract the junior sector in the future.

Coal is far from being a dead commodity, as much research has gone into improving the efficiency of coal-fired plants based on clean coal technology (pressurized fluidized-bed combustion).

In fact, in 1998 investors recognizing the long-term value opportunities of coal created a major consolidation in the U.S. coal industry. Almost US$6 billion in prime assets changed hands. The positive factors for the future of the industry are that coal is readily available, is inexpensive and the technology for its use is well-developed. As electricity markets deregulate, it is expected that additional exploration and development of coal resources in niche markets will take place.

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