Thermal coal: Overview
Power, cement kilns and China's coal-to-chemicals plants
Power, cement kilns and China's coal-to-chemicals plants What this tab covers What the commodity is used for, why, in what volumes and with what alternatives, and its chain from mine or field to end user. Also the latest price moves, top recent news, three things to know, and buttons into each tab.Key uses
| Use | Share | Annual volume | Why this commodity | Alternatives |
|---|---|---|---|---|
| Electricity and combined heat and power | 70% | about 5.5 Gt of steam coal and lignite a yearbasis | Coal is the cheapest dispatchable fuel where it is mined nearby, can be stockpiled for weeks beside a plant, and large grids in China and India were built around it. It supplied 34% of world electricity, 58% of China's and 75% of India's in 2024. Long-lived plants and cheap domestic supply keep it running. Energy Institute Statistical Review 2025 (generation by fuel); share derived and indicative | Solar and wind with battery storage Natural gas combined-cycle plants Nuclear and hydro Biomass co-firing (small share) |
| Cement and lime kilns | n/a | indicative 0.3-0.4 Gt coal-equivalent a yearbasis | Kilns need sustained flame temperatures near 1,450 C and accept low-grade, high-ash fuel because ash becomes part of the clinker. Coal and petcoke are the cheapest fuels that do this, and India's 470 Mt cement industry relies on them. USGS Mineral Commodity Summaries 2026, Cement; kiln energy ratio indicative | Petroleum coke Natural gas Refuse-derived fuel and biomass (co-processing) Electrified kilns (pilot) |
| Coal-based sponge iron (DRI) and other metallurgy | n/a | n/a basis | India is the main user: hundreds of small rotary kilns reduce iron ore with non-coking coal because the country lacks cheap gas. It lets small mills avoid scarce coking coal. Industry practice | Gas-based DRI (Middle East) Blast furnace with coking coal Hydrogen DRI (pilot) Scrap-based electric arc furnaces |
| Chemicals and coal-to-liquids | n/a | n/a basis | China gasifies coal to make methanol, olefins, ammonia and liquid fuels because it has coal but imports most oil and much gas. South Africa's Sasol has run coal-to-liquids since the apartheid-era oil embargoes. Industry practice | Oil- and gas-based petrochemicals Imported ammonia and methanol Green hydrogen routes |
| Captive power and process heat for industry (aluminium, paper, textiles, bricks) | n/a | n/a basis | Aluminium smelters in China and India run captive coal plants to secure cheap round-the-clock power; many small boilers and brick kilns burn coal because it is the cheapest fuel per unit of heat. Industry practice | Grid renewable power with storage Natural gas Biomass boilers Electric boilers |
| Residential and commercial heating | n/a | n/a basis | Still used for winter heating in northern China, Poland and parts of Central Asia where coal is local and cheap, though air-quality rules are pushing it out of cities. Industry practice | Gas Heat pumps District heating |
From mine to user
- Exploration and mine planning Drilling maps seam thickness, depth and quality (calorific value, ash, sulphur, moisture). In India, mines are allotted to Coal India, SCCL or through commercial auctions run by the Ministry of Coal.
- Overburden removal and mining Open-cut mines strip soil and rock with shovels, trucks and draglines; underground mines use longwalls or bord-and-pillar. World output was 9,242 Mt of all coal in 2024, 52% in China and 12% in India (Energy Institute).
- Crushing, washing and blending Run-of-mine coal is crushed and sized; export coal is often washed to cut ash. Coal is blended to meet a contract grade, such as 6,000 kcal/kg NAR for Newcastle.
- Inland transport Rail moves most coal: in India coal is the largest commodity on Indian Railways; in Indonesia barges carry it down rivers; in the US unit trains run from the Powder River Basin.
- Export terminals and seaborne shipping Ports such as Newcastle, Richards Bay, Kalimantan anchorages and Vostochny load Panamax and Capesize ships. Indonesia and Australia supplied about 68% of world coal export value in 2024 (UN Comtrade).
- Import and stockyards Coastal power plants (for example Mundra and Krishnapatnam) and inland plants hold weeks of stock; India's Central Electricity Authority sets minimum stock norms by days of burn.
- Combustion Pulverised coal is burned in boilers to raise steam for turbines; ash is landfilled or sold to cement and brick makers.
Price movement snapshot 2026-10-25
Coal, Australian (World Bank monthly) 147 $/mt Month 2026-09 1 week no daily price 6 months +6.1% World production 9,242 million tonnes, 2024 Largest producer China 51.72% of worldThree things to know
- World coal output hit a record 9,242 million tonnes in 2024, and China alone mined over half of it (Energy Institute).
- China's proved coal reserves equal only 37 years of its 2020 output; US reserves exceed 500 years (Energy Institute).
- Seaborne coal trade rose from 2% of world output in 1960 to 17% in 2013 (Radetzki & Wårell).
Top recent news snapshot 2026-10-25, last 30 days
- China's Thermal Coal Prices Surge to Three-Year HighCrude Oil Prices Today | OilPrice.com · 2026-09-30
- KTR seeks judicial probe into proposed foreign coal importsThe Hindu · 2026-10-16
- China Coal Prices at Three-Year High With Little Relief in SightBloomberg.com · 2026-10-12
- El Nino effect: India’s coal imports may rise in October-DecemberBusinessLine · 2026-09-28
- China September coal imports fall 6% on high inventories, Indonesia supply constraintsMining Weekly · 2026-10-14