Why Canada isn’t Going to Abandon Coal

Canada is phasing out coal-fired electricity, but metallurgical coal presents a different economic and industrial challenge. Thermal coal is burned to generate power while metallurgical coal is used to produce coke, a key ingredient in the manufacture of steel. This distinction is central to the Canadian coal industry’s argument that the government should include coking coal on the list of critical minerals.

Steel remains essential to construction, transportation, pipelines and industrial infrastructure. It is also needed to manufacture transmission towers, wind turbines, and other technologies supporting the energy transition.

Although alternative methods for steelmaking are developing, blast furnaces continue to account for a substantial share of global steel production. The country’s metallurgical coal industry is particularly significant to its export economy. Data from Natural Resources Canada reported that the country produced roughly 42 million tons of coal in 2024, with metallurgical coal making up about 67% of output.

Exports of metallurgical coal reached approximately 29 million tons, valued at nearly $9 billion, substantially exceeding the value of exports of thermal coal. These revenues support mining jobs, railway networks, port operations and associated businesses.

Production is concentrated mainly in Alberta and British Columbia. British Columbia’s Elk Valley hosts major steelmaking coal mines supplying international markets, while Alberta contains deposits around Grande Cache and the Crowsnest Pass. Some proposed developments have faced regulatory challenges and environmental opposition, particularly over water quality and the potential release of selenium into surrounding ecosystems.

The industry is now urging Ottawa to include metallurgical coal as part of the list of critical minerals. The Coal Association of Canada argues that formal recognition could strengthen investment, support domestic employment and reinforce the country’s position as a reliable supplier to steel-producing economies, including India.

However, designation would not automatically guarantee project approval or access to government incentives.

Mining methods are another consideration. Underground extraction, including room-and-pillar mining, can reduce disturbance on the surface compared with extensive open-pit operations. Nevertheless, underground mines still present environmental risks, including groundwater impacts, subsidence and waste management challenges. Effective regulation, reclamation and Indigenous consultation remain essential.

Canada’s withdrawal from coal-fired electricity doesn’t necessarily require abandoning metallurgical coal production. If domestic output declines while international demand persists, steelmakers could turn to competing exporters, potentially shifting economic benefits abroad without reducing global consumption.

The challenge is balancing commercial opportunities with environmental responsibility. Recognizing the distinct roles of thermal and metallurgical coal would allow Canada to pursue its electricity transition while assessing whether steelmaking coal can remain a viable, responsibly managed part of its resource economy.

As Canada’s situation clearly shows, coal industry players like MAX Power Mining Corp. (CSE: MAXX) (OTC: MAXXF) (FSE: 89N) still have a major role to play in supporting economic activity in different economies around the world.

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