Australian coal facing constraints for next five years

Citigroup said last week that transportation constraints in Australia will cap the amount of coal the country is able to export until at least 2014, Bloomberg reported.

An analyst from Citigroup said that prices of coking coal may reach a record in April due to insufficient rail capacity to deliver the material to Australian ports. Ports themselves are another source of the bottleneck, but a lack of cohesion in developing a nationwide rail system to effectively move coal from mines to ports is primarily to blame.

Australia exported 253 million tons of coking coal in 2007 and that volume is projected to grow to 326 million by 2011, but the bottlenecks may effectively cap the amount the country can export at no more than 300 million, Citigroup said. 

Source: American Shipper