NEW YORK, Oct 20 (Reuters) - Demand for coal to generate electricity and make steel in China and India is expected to grow by 7 percent to 8 percent annually in the next five years, leaving the world "chronically" short of the fuel, the head of U.S. coal miner Peabody Energy Inc (BTU.N) said on Tuesday.
He also outlined his company's plans to double exports from Australia to handle Asian demand and to develop its joint venture in Mongolia to produce coal for the Chinese.
The coal shortage, as industrial activity rebounds from last year's economic downturn, is driving up prices and Peabody forecast steam, or thermal, coal selling for $100 per tonne by 2012, up from around $70 today. It also said metallurgical, or coking, coal is already selling for $160 per tonne -- way above this year's benchmark of $129.
"We believe China is short of met (steel-making) coal and demand is shredding supply and pushing prices north," Chief Executive Greg Boyce told Wall Street analysts on a conference call to discuss Peabody's third-quarter earnings.
"India will turn to seaborne markets and in the next five years we see the region with 7 percent to 8 percent growth compounded annually, which is 300 million to 400 million tonnes per year.
"That will leave the world chronically under-supplied," Boyce said.
http://www.reuters.com/article/marketsNews/idUSN2044542920091020
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