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BHP looks to India for coal growth as China demand declines

Image from BHP

The world’s biggest miner BHP (LON: BHP) is looking to India’s fast-growing economy and its accelerating steelmaking output as a way to help offset the declining Chinese coal demand in the new decade, The Sydney Morning Herald reported.

China’s consumption of iron ore and coal – key steelmaking ingredients and Australia’s two top exports – led to a windfall in 2019 for the world’s top miners and added a boost to the Australian government’s federal budget.  

But Chinese demand is projected to ease in the face of lower margins, weakening  global growth and the ongoing US-China trade war. 

Meanwhile, BHP projects Indian steelmaking is on course to grow by 7% per year over the next decade. India’s yearly output of over 100 million tonnes of steel has now surpassed Japan to become the world’s second-largest steelmaking country. 

“A lot of other markets are big but mature,” BHP vice-president of market analysis Huw McKay told the paper.  

“India is big but it’s barely got started.”