Coal is a fossil fuel of sedimentary origin that has formed by coalification of vegetation over millions of years. Black coal consists of the higher rank anthracite, bituminous and sub-bituminous coals. The lower rank brown coal is sometimes known as lignite. In Australia coal deposits occur in all States and the Northern Territory and range from 15 million to 225 million years old.
Coal is primarily used as a fuel to generate electricity and in Australia is used to produce about 80% of the nation's electricity requirements. A special type of coal used to produce coke for the steel making process and by-products of coke-making include coal tar, ammonia, lights oils and coal gas. Coal is used in cement manufacturing, food processing, paper manufacturing and alumina refineries.
Black coal was first discovered in Newcastle 1791 and coal mining and exports commenced soon after in 1799. These early coal mining activities made a significant contribution to the progress of European settlement in Australia. With the progressive spread of settlement to other locations in Australia lead to further discoveries and mining of black coal including the discovery of coal near Ipswich in 1825, at Cape Paterson in Victoria in 1826 and Irwin River in Western Australia in 1846. Knowledge of the existence of brown coal in Victoria dates back to 1857. The Yallourn North open-cut began production in 1889. Over two hundred years later about 9,100 million tonnes of black coal and about 2,300 million tonnes of brown coal have been mined and the Australian coal industry provides significant employment, capital investment and domestic and export income to the national economy.
Each year Geoscience Australia estimates the coal resources in Australia including the Economic Demonstrated Resources (EDR), Sub-Economics Resources and Inferred Resources. This estimate is published each year in Australia's Identified Mineral Resources (AIMR).
Australia has 6 per cent of the world's black coal EDR and ranks sixth behind USA (31 per cent), Russia (21 per cent), China (13 per cent), India (8 per cent) and South Africa (7 per cent). Australia has about 25 per cent of world recoverable brown coal EDR and is ranked first. Australia is a major producer and exporter of coal and in 2008 accounted for about 6% of the world's black coal production and ranked fourth largest producer after China (45 per cent), USA (18 per cent) and India (8 per cent). Australia accounted for about 8 per cent of the world's brown coal production and ranked fifth largest producer after Germany (20 per cent), China (11 per cent), USA (9 per cent), Russia (9 per cent) and Greece (8 per cent).