SYDNEY, AUSTRALIA – In Indonesia, the world’s biggest coal exporter, declines are exacerbated by surging production in China, a top customer.

An international agreement to reduce coal use dragged miners’ shares lower on Monday, November 15, but tight supply of the commodity provided a floor for a sector that has chalked up huge gains this year.

United Nations climate talks in Glasgow ended on Saturday, November 13, with a deal targeting fossil fuel use. Wording was softened to call for a “phase down” rather than “phase out” of coal after lobbying from India, among others.

Big miners China Shenhua Energy and Yanzhou Coal fell 1% and 2.4% respectively in Hong Kong, where the broader stock market edged up slightly. An index of mainland-listed miners fell about 1%. Coal stocks in other regions also came under pressure.

“Climate activists will undoubtedly frame COP26 as failing on coal (and fossil fuels). We look past this frustration (and current energy market conditions) and see ongoing incremental consensus in the need to reduce demand for fossil fuel,” said Cowen analyst John Miller.

In Indonesia, the world’s biggest coal exporter, declines were exacerbated by surging production in China, a top customer. No. 1 miner Bumi Resources fell 5.7%, while Adaro Energy and Indika Energy tumbled 4.5% and 7% respectively.

Shares in Australia-listed thermal coal miner Whitehaven Coal fell about 1.6% and rival New Hope about 1% in a slightly firmer broad market.

Source: Rappler