Xstrata said the demand outlook for coal is robust due to urbanisation in China and India.

Xstrata chief executive for coal Peter Freyberg said Australia will be a key investment region as the company seeks to boost production in order to tap rising consumption, reports Bloomberg.

The company expects to increase coal production by 50 million tons a year by 2015.

By 2020, China and India will account for 70% of the demand for coking coal, a raw material required in steelmaking.