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The predominant use of coal is electricity generation, accounting for nearly 40% (between 35%-40%) of global power/electricity production. Coal-fired power plants remain vital in many countries due to coal’s abundance and reliability as an energy source. It is also essential in steel production, where metallurgical coal serves as a reducing agent in blast furnaces. Emerging uses include coal-to-liquids (CTL) and gasification technologies for synthetic fuels and chemicals.

China and India are the largest coal consumers, driven by their growing populations, industrial bases, and rapid urbanization. China alone accounts for over half of global coal consumption, fuelled by its massive industrial sector and reliance on coal for energy security. India follows, heavily dependent on coal for its power needs and burgeoning infrastructure projects. The United States and Europe consume less coal as they transition to cleaner energy sources, but they remain significant users in the metallurgical and export markets.

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According to US Energy Information Administration (EIA), there are roughly 1285 billion short tons of coal reserves globally. The largest coal reserves around the world are Unites States (accounting for around 21.3% of reserves), followed by Russia (13.9%), China (13.5%), Australia (12.8%), India (11%), Indonesia (3%), Germany (3%), and Poland (2.4%). The rest of the world is roughly 19% of remaining reserves.

China is the world’s largest coal producer, contributing more than 50% of global production (~45% of all coal since 2000) – mining at an extremely fast pace with ~36 years of reserve remaining, vs global of ~134 years. The Ordos Basin in Inner Mongolia and the Shanxi Province are significant coal-producing regions. Chinese coal deposits, especially in Shanxi, are rich in bituminous coal, prized for its high calorific value, making it suitable for power generation and industrial processes. However, many deposits contain higher sulphur levels, necessitating advanced scrubbing technologies. Given China’s position as a major manufacturing hub for goods and industries, coal plays avital role in supplying stable energy.

India ranks second (~11% of coal production in 2023, and ~8% since year 2000), with major coal deposits in the Damodar Valley Coalfields (Jharkhand and West Bengal) and the Mahanadi Basin (Odisha). Indian coal is predominantly non-coking and has lower energy content due to high ash content, limiting its efficiency in energy generation. Despite this, its abundance supports India’s energy-intensive economy.

The United States holds the world’s largest coal reserves, and makes up around 6% of global production (~12% of all coal produced since 2000) with significant production from the Powder River Basin (Wyoming and Montana) and the Appalachian Basin (Eastern US). Powder River Basin coal is primarily sub-bituminous, known for its low sulphur content, making it environmentally favourable for power generation. Appalachian coal includes high-quality bituminous and anthracite varieties, critical for both electricity and steelmaking.

Australia is a leading exporter, makes up ~5% of global production, and is known for its high-quality coking and thermal coal. The Bowen Basin in Queensland and the Hunter Valley in New South Wales are key deposits. Australian coking coal is highly sought after for steelmaking due to its low ash and high carbon content, while its thermal coal is valued for its energy efficiency and low impurity levels.

Indonesia is a top exporter of low-rank coal, with significant deposits in Kalimantan and Sumatra. Indonesian coal is mostly sub-bituminous and lignite, characterized by low ash and sulphur levels, making it a preferred choice for power generation in import-heavy countries like India and China. Its low calorific value is offset by cost advantages and proximity to key Asian markets.

Each country’s coal deposits offer unique combinations of energy content, impurities, and applications, shaping their global roles in coal production and export markets. Below shows the estimated export capacity for coal exports. Australia despite being a smaller player in global production (~6% of production over the last two decades), it has one of the largest export capacities. While China, being the largest producer of coal, have less export capacity due the majotiry of their coal being consumed domestically rather than export focused. These dynamics are important to understand as the selling prices of coal within domestic borders are often at extreme discounts to the internationally traded coal price, and thus there is market segregation.

Coal is also broken up into various types of coal, such as thermal coal which makes up around 80% of all coal produced. Thermal Coal is primarily used for heat in the generation of electricity, as well as in industries. The second category of coal is metallurgical coal (or coke), primarily used in blast furnaces for the production of steel, and is preferred in this process due to is higher calories density vs thermal coal which can be of less premium quality when burning with iron ore.

• Metallurgical Coal: High-calorific-value coal (~28–35 MJ/kg) with low sulphur (<1%) and moderate ash content, primarily used in steelmaking to produce metallurgical coke.
• Metallurgical Coke: A high-carbon, high-calorific-value product derived from metallurgical coal, with low impurities, used as a reducing agent in blast furnaces for steel production.
• Anthracite: The highest-grade coal with very high calorific value (~30–35 MJ/kg), low sulphur and ash, and used for heating, water filtration, and limited industrial applications.
• Bituminous Coal: A versatile, mid- to high-calorific-value coal (~24–32 MJ/kg) with moderate sulphur and ash, used for power generation, industrial applications, and as a precursor for coking.
• Sub-bituminous Coal: A lower-calorific-value coal (~18–24 MJ/kg) with lower sulphur and ash content, mainly used for electricity generation.
• Lignite: Low-grade coal with the lowest calorific value (~15–18 MJ/kg), high moisture, and moderate sulphur and ash, primarily used in power plants near the source.

Based on current world reserves of 1285 billion tons of coal, and an annual production of ~9.58 million tons, there is roughly 134 years of coal remaining in the world. In contrast to the oil market where there is only ~47 years of oil remaining. In British Thermal Unit (BTU) equivalent, there is also almost 4x more energy in coal form vs oil form, thereby highlighting the long-term importance and abundance of coal there is – despite the challenges of CO2 emissions and reaching Net Zero Targets. Carbon Capture Technologies are also an important piece of the puzzle and could therefore change the economics and sustainability of coal as a major source of power globally.

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Coal has been a cornerstone of human advancement, with its use dating back thousands of years. The earliest recorded use of coal was by the ancient Chinese, who mined it as early as 3,000 BCE for heating and cooking. Similarly, evidence suggests that the Romans used coal in Britain during the Iron Age for metal smelting and forging tools. However, its widespread adoption did not occur until much later.

The transition to coal as a dominant energy source began in medieval Europe, particularly in Britain. By the 13th century, coal was widely used for heating in London due to shortages of wood. Known as “sea coal” because it washed up on beaches, it was later mined extensively as demand grew. By the 16th century, coal mines proliferated in Britain, laying the groundwork for the Industrial Revolution.

The 18th century marked a pivotal moment for coal when it became integral to the operation of steam engines, first developed by Thomas Newcomen in 1712 and improved by James Watt in the 1760s. Steam engines powered factories, mills, and transportation, revolutionizing industries and fostering urbanization. Coal’s high energy density made it the preferred fuel for these innovations, catalyzing unprecedented economic growth.

The 19th century saw coal driving advancements in transportation. Steam locomotives, powered by coal-fired boilers, transformed land travel, while coal-powered steamships revolutionized maritime trade. The expansion of coal mining to the United States, Germany, and Russia during this period made coal the backbone of the global industrial economy.

The discovery of coke, a derivative of coal, in the early 18th century by Abraham Darby was another significant development. Coke, with its higher carbon content and lower impurities, became essential for smelting iron and later steel production, which formed the foundation of modern infrastructure and engineering.

In the 20th century, coal became the primary fuel for electricity generation. The advent of coal-fired power plants transformed energy systems, providing reliable and large-scale electricity for homes, industries, and cities. Technological advances in mining and combustion further enhanced its efficiency, while the development of scrubbers and other pollution-control technologies sought to mitigate its environmental impact.

However, the environmental consequences of coal use, including air pollution and greenhouse gas emissions, became apparent during the late 20th century. This spurred a global energy transition, with many countries diversifying their energy portfolios to include cleaner alternatives. Despite this, coal remains a critical energy source, especially in emerging economies like China and India, where it underpins industrial growth and energy security.

Today, coal is predominantly used for power generation, accounting for about 40% of global electricity production. Advanced technologies like high-efficiency, low-emission (HELE) coal plants and carbon capture and storage (CCS) aim to make coal cleaner and more sustainable. Its role in steel production remains indispensable, highlighting its continued importance in the global economy.

From its humble beginnings as a simple heating fuel to its transformative role in powering industrial revolutions and modern economies, coal’s history reflects humanity’s ingenuity and capacity for harnessing Earth’s natural resources to drive progress.