Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--It's probably too early to declare victory, but several factors are combining to create a more upbeat outlook for U.S. thermal coal, sources tell Industrial Info Resources.
Various factors are behind the improved outlook, sources said, including surging electric demand growth from current and projected data centers and artificial intelligence (AI), President Donald Trump's commitment to fossil fuels and rising concern over electric reliability given the significant retirements of coal-fired generation and other types of dispatchable generation that have taken place over the last 10-15 years.
"We are at an extraordinary moment," Conor Bernstein, a spokesperson for the National Mining Association (NMA), said in an interview. He added that projected electric demand growth from data centers and AI was "galactic, truly astronomical."
"There is a global industrial arm's race over AI, and the president has pledged that the U.S. will win it," he told Industrial Info. "This is a new era for coal. Everyone is eager to see how this plays out, but we see a lot of positive trends."
Industrial Info Vice President of Research for Metals & Minerals Joe Govreau agreed. "The last few years has seen an improvement for coal producers, especially for those which export as coal exports have risen. Delays in coal-fired generation closures will benefit coal miners in the short term. We will continue to see project activity in order for the industry to meet current levels of production and replace depleted assets. Industrial Info is tracking 329 coal mining projects in the U.S. totaling $6.6 billion in total investment value."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of the coal mining projects.
In a recent tweet, Mark Christie, chairman of the Federal Energy Regulatory Commission (FERC), which regulates bulk electric wholesale markets, said, "We need to stop the premature retirements of dispatchable generation and build more, otherwise we freeze in the dark. That is reality."
Christie is a longtime former state utility regulator in Virginia, the northern part of which is among the world's largest data center hubs. The state's largest electric utility, Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia), said it has connected 75 new data centers since 2019 with electricity demand jumping 7% since then. Dominion expects electric demand to grow by about 85% over the next 15 years, according to a mid-2024 article in the "Bay Journal."
The article quoted Dominion spokesman Aaron Ruby as confirming that power demand in Virginia is expected to grow by about 85% over the next 15 years.
The article also quoted Buddy Rizer, executive director of Economic Development for Loudoun County, Virginia, as saying, "We've just never seen anything like this."
Various reliability organizations have expressed concerns over electric reliability as well. For more on this, see January 13, 2025, article - PJM Pushes for More Investment in T&D as Demand Skyrockets; October 15, 2024, article - MISO Board to Consider 24 Transmission Projects Costing Over $20 Billion; and June 18, 2024, article - Was $10 Billion Enough? Texans Face Another White-Knuckled Summer.
Last month, in a virtual speech to the World Economic Forum in Davos, Switzerland, Trump said, "Nothing can destroy coal. Not the weather, not a bomb--nothing. And we have more coal than anybody."
Several large electricity generators--including Georgia Power (Atlanta, Georgia), the largest electric utility subsidiary of Southern Company (NYSE:SO) (Atlanta); merchant power provider Vistra Energy Corporation (NYSE:VST) (Irving, Texas); PacifiCorp (Portland, Oregon); and Wisconsin utility Alliant Energy Corporation (NASDAQ:LNT) (Madison, Wisconsin)--have pushed back their planned retirement dates for coal-fired generation. For more on that, see February 6, 2025, article - Rising Electric Demand Growth Delays Retirement Dates for Coal-Fired Generation.
In late 2024, consultancy Grid Strategies LLC projected that U.S. electricity demand could increase by about 15.8% by 2029, or about 128 gigawatts (GW).
"Load growth from planned data centers is changing the game," NMA's Bernstein said.
Use of thermal coal by U.S. electricity generators, which has plunged about 60% from its historic peak of slightly over 1 billion short tons in 2007, appears to have stabilized at just under 400,000 short tons in recent years, according to the U.S. Energy Information Administration (EIA).
In its January "Short-Term Energy Outlook," the agency increased its projection of coal use by U.S. electricity generators in 2025 by about 20 million short tons, to about 369 million short tons, compared to its mid-2024 projection. That projected demand is expected to hold steady in 2026, it added.
Click on the image at right to see a chart of coal use by U.S. electric generators since 2001.
The EIA also forecast that coal inventories at U.S. electricity generators will fall by about 50 million short tons through the end of 2026. Drawdowns of existing inventory may have to be replaced in future years, particularly if coal-fired generators slated for retirement continue operating. The drawdown, to about 80 million short tons by yearend 2026, would place inventories at the low end of the five-year period.
Although U.S. coal miner employment has plummeted in recent decades as a result of technology and fuel switching, it has stabilized at slightly over 40,000 in recent years, according to the St. Louis Federal Reserve Bank.
Click on the image at right to see a graphic of U.S. coal-miner employment since about 1985.
Thermal coal exports also are rising, as surging demand in Asia, particularly in China and India, are giving U.S. coal producers greater opportunities. Global coal demand is expected to remain robust in the near future. The International Energy Agency (IEA) recently revised its 2030 global coal consumption forecast upwards by 6%.
Third-quarter earnings calls from major coal producers agreed that Asian export markets were a bright spot. Asia has boosted thermal coal imports compared with last year, with India imports rising by 12% and China by 8%, according to an executive with Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri).
The EIA's January STEO predicted that thermal coal exports will be about 50 million short tons in 2025 and 2026, down just a few million short tons from 2024.
But U.S. exports of thermal coal to one country--China--just became more challenging. In retaliation for Trump's imposition of a 10% tariff on all Chinese imported goods, the Chinese government slapped a 15% tariff on imports of U.S. coal. That tariff was expected to go into effect Monday.
China was the fourth-largest importer of U.S. thermal coal for the first 10 months of 2024, according to S&P Global Commodities. China imported about 3 million metric tons of U.S. thermal coal during that 10-month period, behind India (10.4 million metric tons), Morocco (4.3 million metric tons) and Egypt (3.4 million metric tons) but ahead of Japan (2.3 million metric tons), S&P said.
It may be too soon for the coal-mining industry to declare victory, but NMA spokesperson Bernstein said, "Think about where we were during the Biden administration, which was committed to wipe out coal mining by 2035. Trump's energy dominance agenda is an incredibly positive development."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
