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Coal, a sedimentary rock composed mainly of carbon, is used to produce electricity or heat through combustion. It currently meets nearly a third of the world’s energy needs and produces roughly two fifths of global electricity. Coke, a fuel usually derived from coal is used for smelting iron ore during steel manufacturing.
Iron ore is the core component of steel, which is used in many forms of modern construction. Steel can be recycled – on average it takes 17 years for a piece of steel to be reused – so demand is proportionately much higher in countries which are industrialising. Today, China produces half of the world’s steel, some two million tonnes per day. It imports 75 million tonnes of iron ore a month and accounts for two thirds of seaborne demand.
On the supply side, Australia is the largest exporter of iron ore with 2014 exports anticipated to reach 650 million tonnes. Brazil is expected to export 330 million tonnes, and China to produce some 350 million tonnes.
Alumina is the intermediary product that sits between bauxite and refined metal in the aluminium supply chain. Global demand for aluminium exceeds 50 million tonnes and is anticipated to grow to 75 million tonnes by 2020.
Demand is being driven by the increasing use of aluminium across a number of industries, including the automotive and aerospace industry, the packaging industry and in building and construction. A car with aluminium parts can be both significantly lighter and stronger than a car made of steel, making it significantly more energy efficient. Whilst growing urbanisation in developing economies and the recognition of the possibilities of aluminium in modern architectural design are driving demand in the construction sector.