Thermal Coal
Distinct from coking coal used in steelmaking, this industry mines coal specifically intended to be burned in power plants to generate electricity.
Why it exists
Thermal coal exists to generate baseload electricity at very large scale, especially in emerging markets.
Why it’s necessary (currently)
Despite decarbonization goals, coal remains a major source of affordable electricity for billions of people where grid alternatives are limited or unreliable.
Key components
Surface and underground coal mines
Rail and port logistics
Power plant supply contracts
Blending and quality control systems
How to evaluate businesses
Evaluate cost per ton, mine life, rail access, regulatory exposure, and export optionality. Cash flow can be enormous in tight markets but collapses cyclically and politically.
How the industry could be improved
Tighter emissions controls, co-firing with biomass, carbon capture deployment where viable, and structured transition paths to avoid grid destabilization in high-dependence regions.