The coal sector remains at the center of geopolitical and industrial dynamics that shape its global outlook. With tariffs imposed by China and the United States, record-breaking production in Indonesia, and economic challenges in India, 2024 is proving to be a pivotal year for the international coal market.
China and the U.S.: Trade War Hits the Coal Industry
China has announced new 15% tariffs on U.S. coal imports in response to the 10% tariffs imposed by the U.S. on various Chinese products. According to a Citi analysis, the global impact of this measure will be relatively limited: in 2024, the U.S. exported approximately 46.3 million tonnes (Mt) of thermal coal, with only 7% (3.4 Mt) directed to China. This accounts for just 0.3% of global thermal coal trade, estimated at 1,146 Mt.
More significant is the impact on U.S. metallurgical coal, used in steelmaking, in the Chinese market. The U.S. exported 10.7 Mt of this coal to China in 2024, covering 9% of China’s total metallurgical coal imports. However, analysts believe that the ample availability of coal in global markets will limit the price impact of these new tariffs.
Indonesia: Record Production and New Market Strategies
Indonesia remains the world’s leading exporter of thermal coal, closing 2024 with a record production of 836 Mt, surpassing its initial target of 710 Mt by nearly 18%. Exports also reached an all-time high, with 555 Mt of coal sold on international markets.
Looking ahead to 2025, the Indonesian government has set a production target of 735 Mt, though the trend of exceeding forecasts remains evident. A significant development could come from the introduction of the national benchmark price (HBA) as a global transaction reference. According to Energy Minister Bahlil Lahadalia, this move would allow Indonesia greater control over the value of its strategic resource, reducing dependence on international markets.
India: Rising Production but Slowing Demand
India recorded a 4.38% increase in coal production in January 2025, reaching 104.43 Mt compared to 100.05 Mt in the same period of 2024. Private and commercial mines saw even stronger growth, with production reaching 19.68 Mt (+31%).
However, domestic demand is showing signs of slowing. State-owned mining giant Coal India Ltd. reported a 17% drop in net profit in Q3 2024 due to weaker electricity consumption growth. Power demand increased by only 2.7% in the last quarter, compared to 10% in the same period the previous year. This trend could curb investment in the sector and slow plans for capacity expansion.
South Africa: Coal Remains a Critical Resource Despite Environmental Pressures
In South Africa, Minister of Mineral Resources Gwede Mantashe reaffirmed the importance of coal for the national economy, calling it a “critical” resource for the country. Currently, about 85% of South Africa’s electricity comes from coal-fired power plants.
However, the future of this resource is uncertain. At the end of 2024, South Africa’s High Court ruled that the government’s plans for new coal-fired power plants were illegal as they violated constitutional health rights. Additionally, the Centre for Research on Energy and Clean Air (CREA) estimated that extending the lifespan of existing power plants could result in up to 50,000 additional pollution-related deaths, with billions in healthcare costs.
Looking Ahead
The coal market is undergoing major transformations. While Indonesia continues to strengthen its production and export dominance, India and China face domestic challenges that could reshape the industry’s balance. Meanwhile, environmental pressures and national energy policies are shaping the future of the coal sector, balancing economic needs with the transition to more sustainable energy sources.