Coal is one of the oldest fuels that has been responsible for powering the modern day world. Before humans were able to generate electricity on an industrial scale, and before they could harness the power of petroleum fuels through the internal combustion engine, they used coal to power up factories and trains.
Today, coal is being phased out in the developed world because it is one of the dirtiest fuels known to mankind. However, other countries, predominantly India and China continue to rely heavily on fuel. As opposed to the U.S., which is past the industrialization phase, industries in these countries are continuing to grow. Naturally, they require massive amounts of power, which can be generated cheaply through coal.
While not as big as the crude oil market, the global coal market is still worth billions of dollars. A research report from The Business Research Company outlines that the industry was worth $595 billion last year, and this year it has grown to $618.7 billion through a compounded annual growth rate (CAGR) of 3.9%. The Russian invasion of Ukraine has played an important role in this growth, particularly as countries aim to diversify their supply chain and global commodities prices surge. Russia also has the second largest coal reserves in the world, so naturally, any turmoil in the country also has a negative effect on the broader market. The Business Research Company also believes that by 2026, the global coal industry will have grown at a 3.7% CAGR and be worth $715 billion.
Zooming in on the global industry, Grand View Research estimates that coal generated 1,961 Gigawatts of electricity in 2020, and from then until 2028, coal power generation will grow by a 1.6% CAGR. This will enable it to generate 2,228 Gigawatts by the end of the forecast period. Naturally, the research firm also points out that Asia Pacific was the largest coal power generation market in 2020, as it accounted for a whopping 74% of the market share. China, the world's largest economy in purchasing power parity terms, was also the largest Asia Pacific player, with Chinese electricity generation accounting for 71% of the Asian Pacific coal power generation.
However, even as coal surges in Asia, the Western world is decommissioning its power plants. Visiongain Reports has a report for this particular market, as it estimates that the segment was worth $7.1 billion in 2022 and it will grow at a CAGR of 6.9% by 2032. As is evident, this lends it a higher growth rate than both the broader coal market and the coal power generation sector. Some major companies that operate in the coal power plant decommissioning industry are Worley Engineering, D.H. Griffin Companies, Arup Group, and AF Gruppen ASA (LON:AFG.OL).
Leading coal power generation companies are KEPCO Engineering & Construction Company, Inc. (KRX:052690.KS), American Electric Power Company, Inc. (NASDAQ:AEP), and Uniper SE (ETR:UN01.DE). Similarly, some of the biggest coal mining companies in the world are China Shenhua Energy Company Limited (OTCMKTS:CSUAY), Alliance Resource Partners, L.P. (NASDAQ:ARLP), and CONSOL Energy Inc. (NYSE:CEIX). Greenlight Capital's David Einhorn is very bullish on CONSOL Energy. CEIX currently trades at $64, yet according to Einhorn the company earn $50 per share in after-tax free cash flow by the end of 2023. Here is what he also said about CONSOL Energy (CEIX):
The company paid its first dividend of $1 per share in August and also announced a policy of distributing at least 35% of its free cash flow to its shareholders. We would emphasize the “at least” part and see room for the percentage to expand as the cash flows materialize. Coal markets have remained quite strong and visibility is improving, such that 2024 looks to us like another strong year.”
Finally, any industry introduction is insufficient without leading technological developments. For the coal industry, these involve using three dimensional (3D) visualizations to map out the terrain before mining begins. These mining systems enable companies to directly transfer blueprints from the site to the operator, which enables efficient and safe operations.
Coal
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Our Methodology
We used data from the U.S. Energy Information Administration to compile our list. As is the case with most natural resource mapping, data is often years old since surveying is a time consuming and expensive process that most countries do not regularly undertake. However, this is a theme common with other major sources of natural resource estimates such as the BP Statistical Review. Don't forget to check out our article on "20 Countries That Produce the Most Coal".
20 Countries with the Biggest Coal Reserves
20. Islamic Republic of Pakistan
Coal Reserves as of 2021: 3377 short tonnes
The Islamic Republic of Pakistan is an Asian country with a $1.5 trillion economy and the fifth largest population in the world. The bulk of its electricity is generated through natural gas and hydroelectric power, and generation is done via state owned public sector power companies. Despite having large coal reserves, Pakistan often relies on imported coal to generate its electricity, which leads to high costs particularly due to long transportation distances.
19. Socialist Republic of Vietnam
Coal Reserves as of 2021: 3703 million short tonnes
The Socialist Republic of Vietnam is a Southeast Asian country with a $1.2 trillion economy. Its energy is generated mostly through a state owned company as well, with hydropower, coal, and fossil fuels taking up the bulk of power generation. Out of these, coal and oil take up the bulk of the share.
18. Czech Republic
Coal Reserves as of 2021: 3962 million short tonnes
The Czech Republic, commonly known as Czechia, is a landlocked Central European country with a $510 billion GDP. The country generates a large portion of its electricity through nuclear power plants, and it has often been an electricity exporter as well due to generating excess power. The country's largest coal producer is OKD, with multiple mines all over the country.
17. Republic of Colombia
Coal Reserves as of 2021: 5019 million short tonnes
The Republic of Colombia is a South American country with large income disparities. It generates most of its electricity through hydroelectric power plants, with the remainder of the share taken up by sources including gas, coal, and liquid fuels. Additionally, the Republic of Colombia also relies on natural resources such as crude oil and coal for the bulk of its exports.
16. Canada
Coal Reserves as of 2021: 7255 million short tonnes
Canada is a prosperous North American country that is one of the most developed countries in the world. The Canadian GDP is worth $2.2 trillion, and it is one of the few developed countries of the world that continues to rely on commodities for GDP output. In fact, crude oil, coal, and other natural resources form almost one fifth of Canadian exports. Some coal companies are Pioneer Coal Limited and HD Mining International.
15. Federative Republic of Brazil
Coal Reserves as of 2021: 7270 million short tonnes
The Federative Republic of Brazil is a South American country that is also the region's largest economy and the biggest in terms of landmass. It is known for its strong mining sector, with the largest mining company overall being Vale S.A. (NYSE:VALE). Brazil's largest coal producing state is Santa Catarina, and the bulk of the country's energy is generated through dams.
14. Republic of Serbia
Coal Reserves as of 2021: 8282 million short tonnes
The Republic of Serbia is a Central European landlocked country with a $164 billion GDP. The country primarily relies on thermal power plants to generate its electricityd and has large coal plants as well which generate more than 1,000 megawatts of electricity. Most of its power is generated by a state owned enterprise. Serbia relies primarily on agricultural exports for its foreign exchange.
13. New Zealand
Coal Reserves as of 2021: 8349 million short tonnes
New Zealand is an island country which counts itself among the list of the world's most developed nations despite having a relatively small economy. Like Canada, it is another developed country that relies on primary inputs for its exports. Oil and renewables have the largest share of NewZealand's power generation, and its largest coal miner is a state owned company.
12. Republic of South Africa (RSA)
Coal Reserves as of 2021: 10905 million short tonnes
The Republic of South Africa (RSA), or South Africa, is one of the most prosperous countries in Africa. It relies on natural resources to fuel its exports, and it is also the only country in Africa with a nuclear power plant. While South Africa also exports coal, the bulk of its power generation is also coal fueled. Most of its coal mining is done by international firms, with local players such as South Africa Energy Coal and Exxaro Resources Limited (JSE:EXX.JO) also pitching in.
11. Republic of Türkiye
Coal Reserves as of 2021: 12,704 million short tonnes
The Republic of Türkiye is a prosperous European and Asian country with a $3.32 trillion economy that is the 11th largest in the world. Turkey also generates a large chunk of its electricity through coal, with its lignite coal contributing significantly to air pollution and premature deaths. State owned Turkish firms are the largest coal miners.
10. Republic of Kazakhstan
Coal Reserves as of 2021: 28,224 million short tonnes
The Republic of Kazakhstan is a Central Asian country with a $569 billion economy. It relies primarily on crude oil exports for its foreign exchange and has the largest economy in Central Asia. It also has the largest coal reserves in Central Asia, and relies on the fuel for a large chunk of its power generation.
9. Republic of Poland
Coal Reserves as of 2021: 31,450 million short tonnes
The Republic of Poland is a Central Asian country with a relatively advanced economy that relies mostly on assembled products and cars for its exports. Coal forms the backbone of its power generation sector, despite the high costs of extraction that are fueled primarily by government subsidies. It is still a large coal importer and has relied primarily on Russia for this purpose. In the aftermath of the Ukraine invasion, Poland announced that it would completely stop Russian coal imports.
8. Ukraine
Coal Reserves as of 2021: 37,891 million short tonnes
Ukraine is the second largest country in landmass in Europe, coming second only to Russia. Coal and gas are the largest contributors to electricity generation, with nuclear also playing a crucial role especially since Ukraine has Europe's largest nuclear plants. Coal mining is also one of the largest industries in the country.
7. Republic of Indonesia
Coal Reserves as of 2021: 38,436 million short tonnes
The Republic of Indonesia is an Asian and Oceanic country. It is also commonly referred to as an Asian Tiger, due to its massive $4 trillion economy. It is also one of the world's largest coal exporters and also relies on it to generate power. Some Indonesian coal companies are PT Bumi Resources Tbk (OTCMKTS:PBMRY), PT Adaro Energy Indonesia Tbk (IDX:ADRO.JK), and PT Indo Tambangraya Megah Tbk (OTCMKTS:PTIZF).
6. Germany
Coal Reserves as of 2021: 39,572 million short tonnes
The Federal Republic of Germany is Europe's largest economy with a massive $5.3 trillion GDP. Roughly a quarter of German energy is generated through coal, making it one of the few highly developed countries to continue to rely on the dirty fuel. This is also due to the fact that Germany has banned all nuclear plants from operating on its territory, fueled in part by Japan's Fukushima nuclear disaster.
