Economics

Countries Earning The Most In Coal Rents Relative To GDP

Large differences in world market and domestic production costs for coal give South Africa and Kazakhstan major economic boosts.

The difference between the hard and soft coal production values at world prices and the total cost of production of coal is referred to as coal rents.

South Africa

South Africa has a big reliance on the coal industry. Coal rents here make up 1.9% of the GDP. This country is one of the top 5 coal exporters in the world, although, the majority mined coal is used for energy production.

Kazakhstan

Kazakhstan hosts the largest coal reserve in Central Asia. These reserves make up 3.8% of total global reserves. The country mined 58.4 million tons of coal in 2013 even though production is lower now than it was during the Soviet Union. Coal rents represent 1.5% of the GDP.

Ukraine

For the Ukraine, coal mining is one of its major industries. Reserves are located in the eastern and northwestern part of the country and provide jobs to approximately 500,000 people. Nearly all of the energy production here, 95% to be exact, is reliant on coal. The GDP is made up of 1.2% coal rents.

Mozambique

Mozambique went through a rapid increase in coal production over recent years. This fact explains why 1.1% of the GDP comes from coal rents. Currently, however, cheap coal prices and underdeveloped infrastructure have presented an obstacle to mining efforts.

Indonesia

The coal industry in Indonesia is alive and well. National demand has increased by nearly 35% over the last few years. At the same time, exports have decreased by 14%. The industry contributes 1% of the GDP.

Zimbabwe

A small portion of Zimbabwe’s GDP comes from coal, only .8%. Natural resources have always been the biggest contributor to the economy. It is agriculture that once made up the biggest portion of the GDP. However, land reform has significantly reduced production capacity. The country has attempted to invest in mineral extraction because of this though growth in coal has been declining.

China

China has a long history of coal production and is the world’s top producer and consumer. Due to a diversified economy, coal rents only make up .7% of the GDP however. Since 2013, coal use and extraction has slightly declined. The National Energy Agency issued a ban on new coal mines and mandated the closure of thousands of small mining operations in 2015.

India

Estimates claim that India has one of the largest coal reserves in the world. The country is considered a developing economy with a 7% annual growth rate that is expected to continue. Of approximately 3,000 mines, half are either coal, iron ore, or limestone. Although the mining industry contributes to 2.3% of the GDP, only .7% comes from coal.

Russia

Russia relies on coal for 14.4% of its energy production. It is the 6th largest producer of coal in the world. Russia houses the second largest coal reserve which holds 19% of global supplies. Like the Ukraine, coal production here has declined since the fall of the Soviet Union. Despite extracting 4% of the world’s total production, the economy is so large that coal rents make up only .6% of the GDP.

Estonia

Estonia is the final country on the list with .5% of the GDP coming from coal rents. Of all of its available natural resources, coal is relatively low on the list. The majority of mining focuses on the large deposits of oil shale. The nation is considered an advanced economy and has made significant efforts toward reducing pollution caused by the mining sector over the past couple of decades.

Countries Earning The Most In Coal Rents Relative To GDP

RankCountry% of GDP Sourced From Coal Rents
1South Africa1.9%
2Kazakhstan1.5%
3Ukraine1.2%
4Mozambique1.1%
5Indonesia1.0%
6Zimbabwe0.8%
7China0.7%
8India0.7%
9Russia0.6%
10Estonia0.5%

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