The highest coal prices in years aren’t enough to spur investment in new mines in the face of heightened efforts by governments and financial institutions to get the world to abandon the dirtiest fossil fuel.
Prices are surging from China to Europe as demand for coal rebounds from a virus-induced hit, and temporary mine outages curtail supply. Yet companies remain hesitant to invest in new projects with financing difficult to come by and question marks over long-term demand.
That’s a boon for miners’ bottom lines but goes against the grain of the typical commodity cycle, where high prices are a signal to increase production and eventually bring the market back into balance.
