After unprecedented prices in 2021 and 2022 amid the energy crisis, coal prices continued to be higher than the pre-Covid levels throughout 2023 and 2024. Prices for different coal qualities generally move in tandem, as partial substitution is possible. Thermal coal is mainly consumed in power generation and in this section is classified into low-CV (CV below 4 200 kcal/kg), mid-CV (CV between 4 200 kcal/kg and 5 700 kcal/kg) and high-CV (CV above 5 700 kcal/kg) categories. In some cases, direct substitution between grades is feasible, and blending higher-grade coal with lower-grade coal is commonly employed to meet specific quality requirements. Coking coal is the most important type of met coal and is primarily used in the production of coke for steelmaking.

In the Pacific Basin thermal coal price markers have moved in correlation. Between January and August 2025, the price of high-CV coal averaged USD 104/t. Mid-CV and low-CV coal recorded average price levels of USD 71/t and USD 45/t, respectively. Most volatility occurred in the high-CV market, where prices fluctuated between USD 92/t and USD 122/t, while for low-CV the spread was only USD 9/t.

Met coal prices have followed a distinct trajectory since mid-2023, with significantly higher volatility compared with high-CV thermal coal. Prices exceeded USD 350/t in the third quarter of 2023, driven by rising demand from China and India. Market tightness eased in the second quarter of 2024, supported by increased exports from Mongolia to China. Since then, prices continued to decline, averaging USD 186/t in the first eight months of 2025.

Recent market movements underscore the different dynamics of coal prices, which are influenced by segment-specific factors and vary by region and coal quality. Nonetheless, except for high-CV thermal coal, price indicators suggest greater stability in 2025 compared with previous years.

Coal benchmark prices moderated in 2025 compared with 2024 across the major Atlantic and Pacific markers, while remaining above the pre-Covid-19 average (2017-2019) in nominal terms. Newcastle FOB (6 000 kcal/kg) averaged USD 104/t in 2025, a decrease of 22% from 2024, yet still around 17% above its 2017-2019 baseline of USD 89/t. The price of 6 000 kcal/kg coal at the Amsterdam Rotterdam Antwerp ports (ARA) including cost, insurance and freight (CIF) averaged USD 101/t in 2025, down 10% y-o-y but still about 12% higher than the 2017-2019 average of USD 90/t. South China including cost and freight (CFR) (5 500 kcal/kg) averaged USD 83/t in 2025, 20% lower than in 2024, yet still approximately 9% above the 2017-2019 average of USD 76/t.

The most pronounced y-o-y price adjustment occurred at Newcastle, reflecting softer supply–demand dynamics for high-CV seaborne coal in the Pacific Basin. While ARA prices also declined, the drop was less severe, supported by stronger than anticipated demand in the Atlantic Basin. In contrast, the South China CFR marker experienced a significant decrease, driven by robust domestic production and abundant stockpiles, which dampened import demand and consequently put downward pressure on import prices.

In 2025 price differentials between major coal benchmarks narrowed significantly. The spread between Newcastle FOB and ARA CIF contracted from USD 21/t in 2024 to just USD 3/t, indicating a more balanced supply–demand dynamic between the Pacific and Atlantic Basins and increasingly aligned market expectations across regions. The continued discount of South China CFR relative to Newcastle and ARA remains consistent with differences in coal calorific value, even when accounting for freight and delivery terms embedded in CFR pricing.

Prior to Russia’s full-scale invasion of Ukraine in early 2022, Russian coal prices from Baltic and Black Sea ports closely tracked European import prices (ARA), reflecting Russia’s role as a key supplier to European markets. However, the war and subsequent sanctions, including the EU ban on Russian coal imports, disrupted this relationship. Russian coal prices began to diverge from European benchmarks, with discounts deepening due to restricted market access and the need to attract alternative buyers.

The discount on high-CV Russian coal has remained persistent. In 2024, Russian coal from Baltic ports traded at an average discount of USD 36/t to ARA, excluding insurance and freight costs. This trend continued into 2025, with the discount holding steady at USD 36/t. The persistence of this discount reflects both geopolitical constraints and the compliance of European buyers with sanctions.

A similar pattern is evident in the Pacific Basin. Historically, Russian high-CV coal exported from Far Eastern ports closely tracked Australian high-CV prices because of overlapping buyer bases in Asia. However, since the invasion, Japan and South Korea, which are the main buyers of high-CV thermal coal in the region, have aligned with sanction regimes and reduced their intake of Russian coal, resulting in sustained discounts. In 2024, the average discount on Russian high-CV coal at Vostochny was USD 31/t, although this has narrowed to USD 21/t in 2025, as most Russian producers cannot reduce prices further.

For the years 2023-2025, we estimate that discounts have resulted in over USD 15 billion in potential lost revenue for Russian coal producers, with more than 80% of the losses concentrated in the Pacific Basin. These numbers should be considered with caution, as over half of this potential revenue loss occurred in 2023, when prices were high due to the crisis after Russia’s invasion of Ukraine, while the projected loss for 2025 is approximately USD 3 billion.

In contrast, the mid-CV segment has shown greater price convergence. In 2024 and 2025, the price spread remained minimal, with Russian coal trading at just USD 2-3/t below Australian benchmarks, indicating a more lenient buyer base of non-OECD Member countries in this segment.

International coal trade is primarily priced in US dollars, making exchange rates a key factor in coal competitiveness. When a currency depreciates against the US dollar, the cost of coal for buyers generally increases, making purchases more expensive.

In recent years, currency movements have continued to shape coal import dynamics. Several currencies resumed their depreciation against the US dollar in 2024 and 2025. The Turkish lira remained the weakest, depreciating by over 15% in 2025 following a 27% decline in 2024, further straining Türkiye’s coal import costs. The Indian rupee and the Korean won also weakened notably, by 3% and 4% respectively in 2025, while the Chinese yuan saw a more moderate decline of 0.7%.

The Japanese yen, the euro and the British pound showed modest but consistent gains in 2025 at 1.9-2.4%.

Poland stands out as a notable exception. The Polish zloty appreciated by over 6% in both 2023 and 2024 and maintained positive momentum in 2025 with a further 3.7% gain. These gains reflect strong economic performance, as Poland recorded the highest growth rates in the European Union. This sustained appreciation has helped offset coal import costs and supported Poland’s purchasing power in international markets.

United States domestic coal prices remained largely driven by domestic consumption under long-term contracts, typically indexed to cost inflation metrics such as diesel prices. In 2024, the average cost of coal delivered to US coal-fired power plants relative to 2023 declined by 3.2% to USD 52/t, before rising to USD 53/t by August 2025.

Regional price dynamics varied significantly. In the Illinois Basin prices reached a low of USD 44/t in August 2024 but recovered by 20% over the following 12 months. In contrast, spot prices in the Central Appalachian region increased by 5% in 2024 and a further 4% in 2025, averaging USD 86/t. Prices in the Powder River Basin remained broadly stable, fluctuating only by a few cents around USD 15/t, reflecting the region’s limited exposure to export markets.

The price spread between regions persisted, with Appalachian prices averaging USD 26/t higher than Illinois Basin prices during the first eight months of 2025, largely due to differences in coal quality, location and mining costs.

In 2023 and 2024, energy commodity prices remained elevated but were significantly lower than the peaks observed during the energy crisis. Throughout this period, Brent crude oil and TTF natural gas were consistently priced above coal benchmarks such as Newcastle FOB and ARA CIF when measured in terms of energy content.

TTF natural gas averaged USD 37/MWh (USD 11/MBtu) in 2024, but increased by 12% to USD 42/MWh (USD 12.3/MBtu) during the first nine months of 2025. Brent crude oil averaged USD 82 per barrel in 2024, equivalent to USD 50/MWh, but had declined by 13% to USD 71 per barrel or USD 44/MWh by September 2025.

Coal prices, already lower in energy-equivalent terms, fell further. Newcastle FOB (6 000 kcal/kg) dropped from USD 19/MWh (USD 134/t) in 2024 to USD 15/MWh (USD 104/t) in 2025, a 23% decrease. ARA CIF (6 000 kcal/kg) declined from USD 16/MWh (USD 113/t) to USD 14/MWh (USD 100/t), down 11% y-o-y.

These developments highlight the comparatively low valuation of coal in energy terms, particularly in 2025, when coal benchmarks reached their lowest levels in recent years. The widening gap between coal and other energy commodities underscores the competitiveness of coal as an energy carrier.

In addition to lower price levels, coal benchmarks have exhibited significantly reduced volatility compared with oil and natural gas indexes. This difference has become increasingly pronounced in the years since the energy crisis.

Since 2023, volatility in coal markets has remained consistently low. The ARA CIF index (6 000 kcal/kg) dropped to a standard deviation of 2 in 2023 and stabilised at 1 in both 2024 and 2025. In contrast, Brent crude oil showed higher volatility, albeit decreasing from 7 in 2023 to 5 in 2025. TTF natural gas remained the most volatile, with standard deviations of 11 in 2023 and 6 in 2025.

These developments highlight the relative stability of thermal coal prices compared with oil and gas. While natural gas and crude oil continue to be influenced by geopolitical risks and supply-side uncertainties, coal markets have shown more predictable and subdued price movements.

Normally, movements in the gas market exert a strong influence on coal prices because gas and coal are key substitutes in power generation. However, recent developments in forward pricing suggest a growing divergence between the two commodities. As of July 2025, the forward curve for ARA CIF coal remains broadly unchanged from its July 2023 level, hovering around USD 110/t. Moreover, coal forward curves have remained relatively flat across the coming years, indicating stable market expectations and limited anticipated shifts in supply–demand fundamentals.

In contrast, the TTF gas forward curve has shown a consistent downward trajectory across successive observation dates. In July 2023, forward prices for 2025 delivery were near USD 14/MBtu, falling to around USD 8/MBtu for a delivery in 2028. The January 2024 curve started at a lower level of approximately USD 11/MBtu, while subsequent curves in January and July 2025 began well above USD 10/MBtu. These later curves also exhibited a less pronounced backwardation, with smaller differences between delivery years.

The more dynamic movement in gas prices, particularly in the front years of the curve, reflects expectations of expanding LNG supply capacity, which is anticipated to exert downward pressure on prices over time. Coal markets, by contrast, lack a comparable supply expansion outlook. This structural difference is contributing to the divergence in both the level and trajectory of forward curves for coal and gas. Another factor behind the decoupling of coal and gas price signals in Europe is the reduced ability to switch between the two fuels in power generation. As coal phase-out policies advance, European countries have limited flexibility for short-term coal-to-gas shifts, weakening the traditional link between these markets.

The cost structure of coal mines is primarily shaped by operating expenses, which include labour, fuel, taxes and royalties. Transport-related costs include inland logistics, port charges and, unless sold FOB, seaborne freight. These cost components vary depending on the mining method, particularly the difference between surface and underground operations, as well as by producer, country and site-specific characteristics.

Globally traded input materials such as diesel fuel, explosives, tyres and steel products continue to be influenced by international market dynamics. Between 2023 and August 2025, price movements across these categories remained uneven. Explosives recorded a cumulative increase of 13%, while tyre prices remained broadly stable over the period. In contrast, diesel fuel prices declined by 2%, and steel products saw a more pronounced drop of 7%. The decline in diesel and steel product prices was largely driven by falling oil market prices and persistent overcapacity in the global steel industry.

Currency exchange rates continue to influence the global competitiveness of coal exporters. Although international coal transactions are primarily settled in US dollars, a substantial proportion of mining operating costs, such as labour, are incurred in local currencies. Consequently, when local currencies depreciate against the US dollar, the dollar-denominated cost of production declines, improving the cost efficiency and competitiveness of producers in international markets.

Between 2022 and 2024, most coal-exporting countries experienced currency depreciation against the US dollar, largely driven by elevated interest rates in the United States. This trend has continued into 2025 for several key exporters. The Australian dollar has fallen by 4% in 2025, following a cumulative depreciation of 13% over the previous three years. The Indonesian rupiah has declined by 3% in 2025, extending its downward trend. The Russian rouble, which had weakened considerably in 2023 and 2024, has appreciated by 8% in 2025, partially offsetting previous losses. However, this appreciation is exerting renewed pressure on the profitability of Russian coal producers by increasing the dollar-equivalent cost of local expenditure. South Africa’s rand has also strengthened slightly, gaining 1%.

In 2024, the Colombian peso stood out as the only major coal-exporting currency to appreciate against the US dollar. However, it has depreciated by 3% in 2025.

In 2025, operational costs for coal mining destined for export continued to vary significantly across regions, reflecting differences in mining practices, input prices and productivity. While some countries achieved cost reductions, others faced increases driven by higher labour or fuel expenses.

Fuel costs remained a major component in countries with extensive opencast mining, such as Indonesia and Mozambique, accounting for around 40% and 34% of total mining costs, respectively. As oil markets eased in 2025, fuel expenditure generally declined. The notable exception was Indonesia, where mandatory biofuel blending in mining operations pushed fuel costs up by around 20%. In countries with high wage levels, such as Australia and the United States, labour costs continued to dominate overall expenses. Because these costs are paid in local currencies, currency appreciation against the US dollar, as occurred in Russia in 2025, significantly increases labour costs when expressed in US dollars. Blasting-related costs remained relatively stable across most countries, typically representing between 4% and 9% of total costs. South Africa stood out for its high share of blasting-related costs at 16%, reflecting its continued reliance on blasting in hard rock mining environments.

Looking at total operational costs, Colombia recorded the highest level in 2025 at USD 59/t, up by 12% from 2024. Australia, while still the second most expensive, saw a notable decline, with costs falling from USD 54/t in 2024 to USD 50/t in 2025, reversing earlier increases thanks to reductions in both fuel and labour inputs. In contrast, Indonesia maintained the lowest costs globally at USD 18/t, despite upward pressure from biofuel obligations.

Governments typically impose royalties on each tonne of coal produced or sold in exchange for mining licences. These royalties have been adjusted in recent years, particularly in response to high coal prices in 2022, with significant variation across countries and regions.

Queensland has recorded the highest royalty levels globally. In June 2022, Queensland amended its coal royalty regime, applying six progressive coal royalty tiers depending on prices. In 2024 the state collected an average of USD 31/t under its progressive royalty scheme that links rates to coal prices. As prices moderated, average royalties declined to around USD 20/t in 2025. In May 2024, the Queensland government introduced the Progressive Coal Royalties Protection Bill 2024 to establish a floor in royalty rates for future years.

Other Australian states apply different schemes. In New South Wales rates vary by extraction method, using three tiers: surface, shallow underground and deep underground mining, while Western Australia maintains significantly lower royalty shares reflecting the lower value of their coal resources. Overall Australian royalties in 2025 remain higher than before the crisis.

Indonesian provinces raised royalty rates during the energy crisis of 2022, increasing them from 13.5% to a range of 14-28 %, with the highest rate applying when prices exceed USD 100/t. The highest royalties per tonne are paid in Central Kalimantan, with an estimated average of USD 10/t in 2025.

In the United States, the One Big Beautiful Bill Act lowered the royalty for existing and new coal leases on federal lands from 12.5% to 7%.

Overall, the drop in coal prices in 2025 has reduced total government revenues from coal exports. Royalties in Australia are estimated to fall by USD 2 billion to USD 6 billion in 2025, while in Indonesia estimates are a 24% decline to USD 3 billion. In other coal-exporting countries, revenues from export-related royalties are estimated to be 20% lower in 2025 compared with 2024.

Met coal mining generally incurs the highest production costs because it is predominantly extracted from underground operations, often at smaller sites, and requires more extensive preparation. These additional expenses are offset by the superior quality of met coal and its higher market price, which justify the elevated production costs. In 2025, the short-run marginal cost curve for hard coking coal seaborne exports declined compared with the previous year, falling from a volume-weighted average of USD 182/t to USD 149/t. This reduction was mainly driven by lower transport costs resulting from lower oil prices. In addition, lower market prices reduced royalty payments in jurisdictions with progressive royalty schemes, such as Queensland. At the lower end of the cost curve, the sharpest decrease occurred at the Elga mine in Russia following the opening of a private rail line. While the use of a private rail line reduced the short-run marginal costs of the mine, its capital expenditure requirements increased.

Global trade in met coal has eased in 2025, resulting in an estimated overall reduction in seaborne supply of coking coal of 10 Mt. Despite this decline, some regions recorded higher export volumes. For instance, mines in West Virginia increased shipments by around 60%.

Similar to developments in the hard coking coal cost curve, the short-run marginal cost curve for seaborne exports of high-CV thermal coal declined in 2025. The volume-weighted average cost decreased by about 10% y-o-y to USD 79/t. Higher costs for Russian mining operations were more than offset by lower costs for Australian exports. However, prices as indicated by the Newcastle high-CV marker fell more sharply, dropping by 40% to USD 102/t in 2025. This price decline was accompanied by a reduction in the supply curve of approximately 20 Mt.

The low- and mid-CV market segment is largely dominated by Indonesia, whose reserves are rich in these coal types. As noted earlier, production costs in the country were pushed up by higher fuel expenses within mines, although this was offset by lower transport costs. As a result, the volume-weighted average for the segment declined, with the overall short-run marginal cost of low- and mid-CV thermal coal seaborne exports remaining at USD 65/t in 2025. With imports and prices falling during the year, the length of the supply curve contracted by 60 Mt, mainly in Indonesia, which recorded the largest reduction among all segments.

Global coal trade is predominantly seaborne, with more than 90% of volumes transported by sea. Dry bulk vessels are the primary mode of transport, with Capesize vessels -above 80 000 deadweight tonnage (dwt)- and Panamax vessels (between 60 000 and 80 000 dwt) being the most commonly used. Freight rates are influenced by vessel type, trade route, fuel costs, and the balance between supply and demand.

Coal accounts for roughly one-quarter of total dry bulk trade, second only to iron ore, which represents nearly one-third. After a sharp decline in freight rates in 2023, prices recovered moderately in 2024, but the rebound was short-lived. Average rates in 2025 are lower than in 2024.

On the Australia to Japan route using Panamax vessels, freight rates averaged USD 14.5/t in 2024 and declined by 13% to USD 12.7/t in the first nine months of 2025. On the South Africa to Rotterdam route using Capesize vessels, rates fell by 12%, from USD 9.8/t to USD 8.6/t over the same period. On the Indonesia to South China route, also using Panamax vessels, rates dropped by 15%, from USD 8.1/t to USD 6.8/t.

Global coal exports continue to generate substantial revenues for the 11 major exporting countries, with total earnings estimated at around USD 140 billion in 2025. However, this represents a decline of approximately 25% compared with 2024, driven by both falling trade volumes and lower coal prices. As a result, revenues are projected to have decreased across most market segments. Global coal trade is now valued at roughly two-thirds of the global LNG market. And while LNG trade is expected to expand in the coming years, coal trade is projected to continue to contract.

Over 70% of global coal export revenues are concentrated in just three countries, which dominate the market in both volume and value: Australia, Indonesia and Russia. Australia leads in export revenue, accounting for around USD 45 billion or 32% of the global total in 2025. Although Indonesia surpasses Australia in terms of export volume, Australia maintains its lead in revenue due to its substantial share of high-value met coal exports. Prior to the invasion of Ukraine, Russia’s coal export revenues were comparable to those of Indonesia, each representing close to 20% of the global total. Since then, Russian coal has required significant discounts to remain competitive, resulting in estimated export revenues of USD 19 billion in 2025, well below Indonesia’s USD 33 billion.

Coal exports also play a critical role in the economies of certain countries. In Australia, coal exports represent a small single-digit share of GDP. In contrast, Mongolia’s coal exports accounted for over USD 8 billion in a total GDP of USD 26 billion in 2024, underscoring the sector’s outsized importance to the national economy.

Margins on thermal coal exports, excluding overheads such as marketing, contracted sharply in 2025 as falling prices outpaced cost reductions. Average revenues across major exporting regions declined by about 16% y-o-y, reflecting weaker international prices. In contrast, aggregate costs, which include mining, transport, royalties and capital charges, decreased only marginally, leaving producers with significantly lower profitability.

Margins fell in all regions, with several turning negative. Australia, Indonesia and South Africa maintained positive margins, excluding overhead costs, although these narrowed substantially compared with 2024. Australia remained the strongest performer with a margin of about USD 26/t, down from USD 41/t a year earlier. Margins in Indonesia and South Africa were reduced by half. Margins in the United States fell to USD 33/t, though this figure should be interpreted cautiously due to significant regional disparities. More severely, Colombia, Mozambique and Russia moved into loss-making territory, with Russia recording the deepest average negative margin of more than USD 13/t. Thus, we estimate that the Russian coal mining sector lost over USD 4 billion in the nine months to September 2025. As the coal mining industry is important for its social and regional implications, maintaining output may remain an objective for the Russian authorities even when operations are loss-making.

Overall, the average margin across the seven major exporters fell from nearly USD 20/t in 2024 to just above USD 5/t in 2025. Since these margins exclude overhead costs such as general company expenses and marketing, in accordance with our estimates most coal miners have been operating at a loss in 2025. This decline highlights the sensitivity of profitability to price fluctuations and underscores the limited flexibility of cost structures in the short term.

Similarly to thermal coal, profitability for hard coking coal exporters weakened considerably in 2025 as revenues fell faster than aggregate costs.

Margins contracted across all major exporters. Australia, Canada and Mongolia maintained positive margins, but these narrowed significantly compared with 2024. Australia’s margin fell from about USD 72/t to USD 45/t, while Canada dropped from over USD 102/t to around USD 59/t. Mongolia experienced a similar trend, with margins halving to roughly USD 59/t. The United States also saw declines, though they remained positive. Mozambique and Russia recorded the sharpest deterioration, with margins falling by more than 40%, albeit staying above zero.

On average, margins excluding overhead costs across the six exporters decreased from nearly USD 95/t in 2024 to about USD 52/t in 2025.

Average annual capital expenditure requirements for coal production remain significant across major exporting countries. These figures are IEA estimations and include sustaining capital costs for operating mines as well as expansion capital required to increase production. For expansion projects, annualised capital expenditure calculations are applied using a 20-year time span and weighted average cost of capital of 10%.

To sustain the world’s third-largest total production and the highest export volumes, Indonesia requires capital expenditure of over USD 5 billion per year, the largest annual capital investment for thermal coal, far exceeding other producers. Australia follows with more than USD 2 billion for thermal coal and nearly USD 1.6 billion for met coal. Russia and the United States also show substantial capital needs in both segments, each exceeding USD 1 billion for thermal coal and around USD 1 billion or more for met coal. South Africa’s thermal coal operations require approximately USD 1.8 billion annually, while Canada and Mongolia have smaller but still significant capital requirements for met coal, at around USD 0.5 billion each. Colombia’s capital needs are about USD 0.3 billion, consistent with its smaller production base and lack of expansion plans.

Overall, sustaining and expansion capital expenditure is particularly concentrated in Indonesia and Australia, although met coal investment needs remain significant for countries with specialised production. This analysis focuses only on export-oriented countries.