In this piece, we will take a look at the 11 best coal mining stocks to invest in. To know more about the top stocks, go directly to 5 Best Coal Mining Stocks To Invest In.
Coal has been recognized for its role in alleviating poverty through coal mining by offering employment opportunities in areas with limited or no jobs. Also, coal mining can spur economic growth by attracting investment and generating revenue for local governments. It is most reliable, and constant power of energy in areas that use coal as a primary energy source thus contributing to enhanced productivity and quality of life. Despite being the most reliable and abundant source of energy, coal consumption has been witnessed to partially decline particularly in the United States due to apprehensions regarding the impact of carbon dioxide and other emissions on climate.
Predominantly “green companies” have been claiming for a long time now that wind and solar are the cheapest forms of electricity and transitioning to renewable energy will contribute to the broader target of achieving net zero emissions. However, the opposite is true in this case as the transition to renewable energy sources has been witnessed to fail because it misaligns with the “Energy Trilemma” of focusing on security, affordability, and sustainability.
According to Ernst & Young’s 2024 report, “Top 10 business risks and opportunities for mining and metals 2024”, ESG poses both substantial risks and considerable opportunities for miners that can contribute to achieving long-term value for all stakeholders. Moving forward, coal asset divestment continues because it produces carbon that represents a significant proportion of GHG emissions. Many diversifier miners have either divested their coal assets or set a timeline for closure. As per the latest IEA market report, a decline of 2.3% has been expected to take place globally in the demand for coal by 2026 in comparison to 2023.
Coal Industry Outlook 2024
China, India and Indonesia are the three largest coal producers. China, among them, has dominated global coal production for decades and is likely to continue as the foremost coal producer in the foreseeable future. Despite setting renewable energy targets, the growing economies of China and India continue to remain the top consumers of coal in efforts to fuel economic growth. China is the world’s largest energy consumer and over 60% of its electricity is generated by coal. Based on the projections from Energy Watchdog International Energy Agency, China’s share of global electricity consumption will surge to one-third by 2025, marking a substantial increase from a quarter in 2015.
On the contrary, according to Ember’s Global Electricity Review 2023, wind and solar energy are expected to replace coal by 2030, it will contribute to 41% of global electricity generation with a significant increase of 10% in 2021. Simultaneously, this transition demands a reduction in coal generation by 54% and gas generation by 28%. A notable surge in electricity demand with an average annual increase of 3.7% from 2021 to 2030 is also anticipated in this period.
Coal’s contribution to Energy Mix in 2024
According to the European Electricity Review of 2024, fossil generation plummeted by a record 19% last year with an unprecedented collapse in coal and gas generation. Coal generation fell by 26% to its lowest level accounting for only 12% of the EU electricity mix in 2023. Also, gas generation fell by 15%, which accounts for 17% of the total EU generation in 2023.
In the US alone, about 60% of 4.18 trillion kilowatt-hours of energy was generated last year from fossil fuels that included coal, according to the US Energy Information Administration. Coal amounted for roughly more than 16% of electricity generation in the nation.
Some of the best coal stocks include Teck Resources Limited (NYSE:TECK), Arch Resources, Inc. (NYSE:ARCH), Peabody Energy Corporation (NYSE:BTU), and others. For this, we decided to take a look at the 11 best coal mining stocks to invest in.
11 Best Coal Mining Stocks To Invest In
Our Methodology
To compile the list of the best coal mining stocks to invest in, we filtered companies listed on the New York Stock Exchange and Nasdaq that were engaged in coal mining operations. The stocks were ranked based on Insider Monkey’s database of 933 hedge funds tracked at the end of Q4 2023. The ranking was based on the ascending order of the number of hedge fund investors in each stock and then the top 11 coal mining stocks were picked for investment purposes. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here)….
Read More: 11 Best Coal Mining Stocks To Invest In