Nice (Platts)--20May2008

Coal's importance in the world energy mix is set to increase in the
future, according to the chief economist of the Paris-based International
Energy Agency, Fatih Birol.

"The global energy system is on an increasingly unsustainable path, and
coal will have an even more significant role in the future," Birol told a
coal conference in Nice, France.

Painting a particularly bleak portrait of the future overall global
energy system, Birol said a supply crunch could not be ruled out. He cited
speculation that plans to increase cooperation among gas producers could lead
to the formation of a "gas OPEC," which he said would was "not good news for
consumers and a worrying signal about security of supply."

Birol said that "decolletage," or the widening gap between demand and
supply in the oil, gas and coal sectors would lead to further tightness in
each of the respective markets as well as higher energy prices in the future.

"China started to put pressure on the [coal] market and that's one of the
main reasons why prices have risen," he told the conference, adding that the
country "may import up to 120 million mt next year due to growing steel and
power generation demand."

He also said that China and India would build an additional 800 GW of
power generation capacity from 2005 to 2015, 90% of which would be coal-fired.

On the supply side, Birol questioned whether coal producing countries had
sufficient infrastructure in place to meet coal-fired generation requirements
until 2030.

"In terms of availability of [coal] resources, I think we're fine but
it's becoming more and more difficult and expensive to get the coal out of the
mines," he said.