Coal may be controversial and be competing with gas and other energy sources but it will be a major energy for at least 50 years, according to a report by PriceWaterhouseCoopers.

“Coal may, one day, be replaced by renewable sources,” PwC energy, utilities and mining leader Jock O’Callaghan said. “But transitions to new energy sources can take 50 years to complete, so we are yet to write the final chapter in coal’s story.

“If the demand story dominated the past five years the next five will be shaped by supply issues. Supply has failed to keep up with demand, and that’s likely to remain the case for a great while yet.”

Coal is the world’s most abundant and widely distributed fossil fuel and of the major commodities it’s also the most controversial, according to the report.

“While its dominance is not about to wane, its future demand profile will change as the imbalance grows between countries with a coal surplus and those with a deficit,” the report states.

“Coal will increasingly become an internationally traded commodity rather than one traded locally.”

The report identified key supply issues including: how decreasing grades and rising input costs are changing cost bases; evolving fiscal regimes and resource nationalism; continued disruptions to production; the increasing remoteness of deposits and higher capital costs to bring supply to market.

High commodity prices have not translated into new supply, despite making even the most marginal assets profitable. Tier-one assets are worth more than ever, yet so is the cost to bring them into production.