In this globalized economic era, China's hunger for coal creates ripples that effect millions outside the country.  Despite record high prices, and intense efforts to increase production and to geologically explore for new coal fields (such as this one), China's coal consumption is growing so fast it's production cannot keep up. 

China used to mine much more than it needed just a few years ago, but it recently ceased to be a major regional coal exporter to countries like Japan and Korea.  Australia is nearby, and has lots of coal, but infrastructure limitations mean it will take years for the Aussies to ramp up its capacity to meet demand.  All this begs the question where needy nations are gonig to get their coal.

From Reuters:

Asia was set to buy more coal from South Africa and Canada to meet its growing needs because China was soaking up supplies across the Pacific region, an Australia's government forecaster said on Monday.

Growing demand should also maintain Asian coal prices at "historically high levels," Alan Copeland, a commodity analyst at the Australian Bureau for Agriculture and Resource Economics (ABARE) said.

... "As long as Asian coal prices remain where they are, then South African coal prices will remain competitive and the Japanese and Koreans will buy more from them," Copeland said on the side of the Coaltrans sector conference in Brisbane.

Korean generators last week purchased six cape cargoes of South African for delivery in Q4 and in 2008, at around $61 a tonne FOB Richards Bay from producers and traders, sources said. Sources have also said Korean power generators bought two prompt-loading cape-sized Canadian spot cargoes.

A " capesize" cargo is actually a HUGE quantity of coal, up to 400,000 metric tons, so each delivery could be worth over $25 million.

Benchmark Australian spot thermal coal prices, based on the globalCOAL index, hit a fresh record of $72.75 this month...