Thermal coal: Extraction
Draglines, longwalls and the four ranks of coal
What this tab covers How it is mined, drilled or grown, and processed into a tradeable form: the main methods compared, their unit economics, by-products, and the companies that do this work globally and in India.Coal is fossilised plant matter, ranked by carbon and heat content from lignite through sub-bituminous and bituminous coal to anthracite. Thick, shallow seams in Australia, Indonesia and the US Powder River Basin are strip-mined with draglines, shovels and trucks. China and India combine huge open pits with underground longwall mines. Raw coal is crushed and often washed to cut ash, then blended to a heat content such as the 6,000 kcal/kg grade behind European price indices (Geman). Lignite is wet and low in energy, so it is usually burned beside the mine. Coal seams also yield coal-bed methane.
Steam coal is mined either from the surface or underground, then upgraded only as far as the buyer will pay for. Surface (open-cut) mining dominates in Indonesia, Australia, the US Powder River Basin and India, where most Coal India output comes from large opencast mines. Underground longwall mining dominates in China's older northern and eastern fields and in US Appalachia. Lignite, a young, wet, low-energy coal, is dug from huge pits next to power stations because it is not worth transporting. Coal quality, especially calorific value and ash, decides whether it is burned locally or traded by sea.
Methods compared
| Method | Share of supply | Typical scale | Recovery / efficiency | By-products | Unit cost |
|---|---|---|---|---|---|
| Open-cut (strip) mining with truck-and-shovel or draglines | majority of Indian, Indonesian, Australian and US output (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | large mines 10-80 Mt a year; Coal India's Gevra and Kusmunda mines are among the world's biggest (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | typically 85-95% of the seam in the pit (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | overburden, mine water | cash costs at large Indonesian and Powder River Basin mines are among the lowest in the world, often well under $40/t FOB for Indonesian sub-bituminous coal (indicative; basis: typical industry range, not checked against a sourced 2025 figure) |
| Underground longwall mining | most of China's output, which was 4,780 Mt in 2024 (Energy Institute); null for a precise share | a single modern longwall can produce 5-10 Mt a year (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | about 60-80% of the seam (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | coal mine methane (a safety hazard and potential fuel) | higher than open-cut; null for a sourced figure |
| Bord-and-pillar underground mining | a small and falling share of Indian output (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | small mines under 1 Mt a year (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | often 40-60% because pillars are left (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | none significant | higher than opencast in India (indicative; basis: typical industry range, not checked against a sourced 2025 figure) |
| Lignite pit mining at mine-mouth power plants | about 0.62 Gt of lignite in 2024, roughly 7% of all coal by mass (World Mining Data 2026) | single German pits produce tens of Mt a year (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | high in the pit (indicative; basis: typical industry range, not checked against a sourced 2025 figure) | ash, gypsum from flue-gas desulphurisation | low per tonne but low energy per tonne (indicative; basis: typical industry range, not checked against a sourced 2025 figure) |
How each method works
Open-cut (strip) mining with truck-and-shovel or draglinesOverburden is drilled, blasted and removed in benches until the seam is exposed, then coal is loaded into trucks. The strip ratio, tonnes of waste per tonne of coal, drives cost. Mined-out areas are backfilled and rehabilitated.
Cheap, safe and scalable; large land take, dust, water and displacement impacts.
Industry practice (indicative) Underground longwall miningA shearer cuts coal along a face up to 400 m wide while hydraulic shields hold the roof; the roof collapses behind as the face advances. Conveyors carry coal to the surface. China's large state groups run most of the world's longwalls.
Reaches deep seams with less surface damage; methane, fires and roof collapse are the main safety risks.
Energy Institute 2025; industry practice (indicative) Bord-and-pillar underground miningRooms are cut into the seam leaving pillars of coal to hold the roof; continuous miners or drill-and-blast are used. India's older underground mines, many run by Coal India and SCCL, use this method and are generally loss-making.
Low capital and suits thin seams, but low productivity and recovery.
Industry practice (indicative) Lignite pit mining at mine-mouth power plantsBucket-wheel excavators and conveyors dig soft, wet lignite (often 30-60% moisture) from deep pits and feed it straight to an adjacent power station. NLC India in Tamil Nadu, Germany's Rhineland and Turkey's Afsin-Elbistan work this way.
Cheap local fuel with no transport; very high CO2 per kWh and large pits.
World Mining Data 2026 Unit economics are indicative ranges from the sources named; costs vary widely by deposit, region and year.Who does it: global
| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| China Energy Investment Corporation (CHN Energy) Volume not verified in sources checked, so left blank. | China | parent of China Shenhua; coal mining, power, rail and ports (group total not found) | not published | 2025 | Not found in sources checked |
| China Shenhua Energy | China | listed coal arm of CHN Energy (Shendong, Zhunge'er mines), power, rail | 332 Mt commercial coal produced (sales 431 Mt) | 2025 | China Shenhua 2025 operating data (via Tiger Brokers) |
| Shandong Energy Group Volume not verified in sources checked, so left blank. | China | coal mining in China and Australia (Yancoal) | not published | 2025 | Not found in sources checked |
| Glencore | Switzerland | largest seaborne thermal coal exporter (Australia, Colombia, South Africa) and trader | 98 Mt energy (thermal) coal, 100% basis of controlled assets | 2025 | Glencore Full Year 2025 Production Report |
| Bumi Resources Volume not verified in sources checked, so left blank. | Indonesia | largest Indonesian producer (KPC, Arutmin) | not published | 2025 | Not found in sources checked |
| Peabody Energy Volume not verified in sources checked, so left blank. | US | largest US producer (Powder River Basin) and Australian exporter | not published | 2025 | Not found in sources checked |
Who does it: India
| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| Coal India | India | state miner with eight subsidiaries; world's largest coal company by output | 781 Mt coal | FY2025 | Ministry of Coal Annual Report 2025-26, Chapter 9 (FY2026 target 875 Mt; 529 Mt in April-December 2025) |
| Singareni Collieries (SCCL) | India | Telangana state-central joint venture miner | 69.01 Mt coal | FY2025 | Ministry of Coal Annual Report 2025-26, Chapter 9 |
| NTPC (captive coal blocks) | India | largest power generator, mining its own blocks such as Pakri Barwadih and Talaipalli | 34.38 Mt coal from captive mines (FY2025 target 40 Mt; FY2025 actual not found) | FY2024 | NTPC press release, April 2024 |
| NLC India Volume not verified in sources checked, so left blank. | India | lignite mining and mine-mouth power at Neyveli; also coal at Talabira | not published | FY2025 | Not found in sources checked |
| Adani Enterprises Volume not verified in sources checked, so left blank. | India | largest private coal importer and trader; mine developer-operator in India; Carmichael mine in Australia | not published | FY2025 | Not found in sources checked |
India is the world's second-largest producer (1,085 Mt in 2024, 12% of world) and second-largest importer (18.4% of 2024 coal import value), mostly Indonesian and South African steam coal for coastal plants (Energy Institute; UN Comtrade). Coal India dominates output; captive and commercial blocks run by NTPC, Adani-operated mines and others are the fastest-growing slice. India produced 1,047.5 Mt in FY2025: Coal India 781.1 Mt, SCCL 69.0 Mt and captive and other mines 197.5 Mt; captive and commercial output rose to 210.5 Mt in FY2026. India imported 243.6 Mt of coal in FY2025 (Ministry of Coal).