As of 2004, Australia contained 86.5 billion short tons (Bst) of recoverable coal reserves, the majority of which are concentrated along the country’s eastern seaboard. The Bowen basin in Queensland contains the largest reserves (37.8 Bst). Reserves in the Sydney-Gunnedah basin and surrounding areas of northern New South Wales (NSW) contain about 32.1 Bst. Minor reserves are also located in Southern and Western Australia as well as Tasmania.

Australia has more than 100 privately owned coal mines located throughout the country. Around 60 of these mines are open pit operations, with the remainder being mined underground. As a result of several consolidations in recent years, Australia’s coal industry is dominated by BHP Billiton, Anglo American (UK), Rio Tinto (Australia-UK), and Xstrata (Switzerland).

Australia is the world’s fourth largest coal producer. In 2004, Australia produced 390.9 million short tons (MMst). Together, Queensland and NSW account for almost 97 percent of Australia’s annual coal production and 100 percent of Australia’s black coal exports. While both states produce both coking and thermal coal, production of coking coal is significantly higher in Queensland, while NSW leads in thermal coal production. Over the last decade, coal production in Australia has grown by 36 percent, with new projects continuing to come online every year.

Australia exports approximately 60 percent of its annual coal production, making it the largest net exporter of coal (29 percent of global coal exports) in the world. Australia dominates the coking coal market, where it is responsible for over half of all world exports. Australia also leads the world in thermal coal exports, accounting for 21 percent of that market. However, Australia’s thermal coal exports recently began to face new competition from China, raising the possibility that its share of that market may shrink in the future.

Japan is the destination for over 60 percent of Australia’s coal exports. Additionally, some analysts are expecting China to be a growing market for Australian coking coal in the next few years, as the Chinese economy and need for raw materials both grow. Other important export markets include the rest of Asia and Europe. Australian suppliers set prices for their coal exports directly with Japanese utilities. The annually negotiated price of these contracts has a large effect on Australia’s coal export earnings.