Investing in coal stocks

Stocks related to this fossil fuel critical to energy production have surged. Here's what you need to know before investing.

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Donald Trump referred to tariffs as "The most beautiful word in the dictionary." But on 4 February China responded to newly-imposed tariffs on Chinese imports to the US with tit-for-tat imports of their own – specifically a 15% tariff on coal and liquefied natural gas.

While demand for coal is expected to fall long-term amid concerns over climate change and a shift to other fuels, the sector still remains pretty hot. Here are some basics for those considering an investment in coal.

What is coal?

Coal is a rock that’s predominantly made of carbon. Its combustible properties make it useful to burn for fuel and accounts for almost 40% of the world’s electricity generation.

Ten countries produce 90% of the world’s coal, with China, India and the United States leading the pack. Despite a growing climate change movement and calls for green energy, the coal demand is forecast to remain stable into 2024.

Coal stocks include companies that mine and process coal for electricity plants and steel production.

How to invest in coal stocks

  1. Choose a platform. If you’re a beginner, our share-dealing table below can help you choose.
  2. Open your account. You’ll need your ID, bank details and national insurance number.
  3. Confirm your payment details. You’ll need to fund your account with a bank transfer, debit card or credit card.
  4. Search the platform for coal stock codes.
  5. Research the shares you want to buy. The platform should provide the latest information available.
  6. Buy your shares. It’s that simple.
Best for 0% commission stocks
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Earn 4.75% on uninvested funds
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97% would recommend
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Why invest in coal stocks?

China consumed over 50% of the world’s coal production in 2018, according to the BP Statistical Review of World Energy. While the global coal demand should remain stable for a while, China’s coal demand could peak in 2025.

High demand for this fossil fuel is likely to bump coal stock prices in the foreseeable future. So although coal won’t be the dominant energy source that it once was during the Industrial Revolution, it’s not going anywhere yet.

Risks of investing in coal

Coal stocks face three primary obstacles:

  1. Government policies. When coal is burned for energy, it produces greenhouse gas emissions. Governments are adopting stronger climate policies to reduce air pollution by slowly phasing out coal power generation.
  2. Competition. Renewable energy, including wind, solar power and natural gas, are slowly edging coal out of the market. For example, coal generation has been forecast to decline in 2025 and 2026.
  3. Developments in China. Being a coal consumer giant, China strongly influences coal demand. China expected consumption to peak in 2025. Coal demand will steadily fall as China weans off of coal and implements its cleaner energy strategy.

Coal stocks

Many coal stocks trade on the New York Stock Exchange. But certain stocks, including China Shenhua Energy, are only available over-the-counter or from an international exchange.

Select a company to learn more about what it does and how its stock performs, including market capitalisation, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

What ETFs track the coal category?

The only ETF tracking the coal industry shut down recently. So ETF investors can’t find a clean-cut coal play.

Bottom line

Coal stocks could be a solid short-term investing opportunity. Demand should steadily increase in the coming years, but keep your eye on renewable energy and natural gas that’s slowly inching toward a bigger piece of the energy pie.

To invest in coal, compare trading platforms to open a brokerage account.

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Product UKFST Finder Score Min. initial deposit Price per trade Frequent trader rate Platform fees Offer
eToro
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$100
£0 on stocks
N/A
£0
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XTB
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£0
£0
£0
£0
Earn up to 4.75% interest on uninvested cash.
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InvestEngine
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£100
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N/A
0% - 0.25%
Get a welcome bonus of up to £100 when you invest at least £100. Use code "FINDER". T&Cs apply.
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Hargreaves Lansdown logo
£1
£11.95
£5.95
£0 (0.45% for funds)
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Freetrade
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£1
£0
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Get a free share worth up to £100 when you sign up and deposit at least £50. T&Cs apply. Capital at risk.
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£0
From £8
From £0
£8 per month
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Wealthify logo
£1
£0
N/A
0.6%
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interactive investor logo
£0
£3.99 (free regular investing)
£0
From £4.99 a month
Get £100 worth of free trades with an ii Trading Account by 28 February. Capital at risk. T&Cs apply. New customers only.
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Moneyfarm logo
£1
£3.95
N/A
£0
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Charles Stanley logo
£0
£11.50
N/A
0.35%
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct. T&Cs apply. Capital at risk.
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CMC Invest
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£0
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£0
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Trading212
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.


Zoe Stabler DipFA's headshot
Senior writer

Zoe was a senior writer at Finder specialising in investment and banking, and during this time, she joined the Women in FinTech Powerlist 2022. She is currently a senior money writer at Be Clever With Your Cash. Zoe has a BA in English literature and a Diploma for Financial Advisers. She has several years of experience in writing about all things personal finance. Zoe has a particular love for spreadsheets, having also worked as a management accountant. In her spare time, you’ll find Zoe skating at her local ice rink. See full bio

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Zoe has written 160 Finder guides across topics including:
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