In 2025, global coal production remained close to an all-time record, at 9.1 billion tonnes (Bt), as strong output in China and India offset declines in several export-oriented producing countries. Both China and India see domestic coal production as central to their energy security strategies. Following coal shortages in 2021, both countries sharply expanded their coal output, ramping up supply to historically high levels even as demand did not grow at the same pace and inventories accumulated across the supply chain.

China remained by far the world’s coal largest producer, with output reaching 4.71 Bt in 2025. The recovery in Shanxi province, after a 2024 mining accident temporarily constrained production, has further bolstered China’s coal output. But high inventories and weakening import demand have reduced the incentive to expand production further.

In India, 2025 coal production hovered at around 1.1 Bt for a second consecutive year, supported by continued efforts to strengthen domestic supply and reduce reliance on imports. Coal India Limited (CIL) remained the backbone of national production, while captive and commercial mines continued to make an important contribution to growth. However, high inventories have started to constrain further expansion: Large pithead stocks and comfortable power-plant inventories reduced the need to accelerate output further, while growing domestic capacity is increasingly displacing imports, particularly among electric utilities and industrial users.

Indonesia, the world’s third-largest coal producer and the leading thermal coal exporter, saw output fall by more than 5.5% from its 2024 record, as lower international prices and weaker demand from key Asian trading partners reduced incentives to maximise production.

In Australia, output was constrained by mine disruptions due to industrial action and adverse weather and weaker market conditions for metallurgical coal. The United States was a temporary exception to the broader trend, with production rising more than 5% year-on-year, thanks to stronger domestic demand amid new government policy measures that favour coal-fired generation.

Elsewhere, the outlook in Russia remained uncertain amid ongoing international trade sanctions, weak prices and financial pressure on coal producers due to debts accumulated in recent years. South Africa recorded a modest increase in production, but rail and port constraints continued to limit exports. Colombia saw a sharp drop as falling prices and operational disruptions linked to blockades at El Cerrejón mine rail weighed on output.

Global coal production is expected to edge lower (-0.7%) from 2025, marking its first annual decline after several years of growth. The dip reflects elevated inventories at the end of 2025 and policy measures that have constrained production in several major producing countries.

China remains by far the world’s largest producer, with output still expected to exceed 4.62 Bt. The growth of recent years, however, has been constrained by high inventories, and reversed by renewed safety inspections following a fatal accident in May in Shanxi province, one of the country’s most important coal-producing provinces and its main coking coal region. More than 100 mines, with a combined annual capacity of over 100 million tonnes (Mt) were temporarily shut, and only part of that capacity was back online by early June. As a result, coal production in June and July fell by around 10% year-on-year, the steepest drop since 2016. We expect production to recover over the remainder of the year as some idled capacity returns. Even so, healthy inventories at major ports and power plants should limit the need for a broader increase in output.

India’s coal production is expected to set a new record at 1 095 Mt in 2026, supported by the government’s continued efforts to bolster domestic supply and lower import dependence. High pithead inventories, however, have tempered output momentum. Coal India Limited (CIL), which accounts for around three-quarters of national production, reported lower figures in May as pithead stocks remained elevated. Amid this overcapacity, the company has been meeting customer demand by drawing down inventories. Thermal coal imports have also fallen, particularly among power plants. Record auction volumes aimed at replacing imported coal underscore the government’s commitment to import substitution.

Indonesia is expected to make the largest supply adjustment among the world’s major producers in 2026, with output projected to fall by more than 12 Mt (‑2.6%). The government has lowered its coal production target to 641 Mt, well below the previous year, creating fresh uncertainty for both producers and international buyers. At the same time, weaker demand from key Asian importers and higher domestic market obligations – which require more coal to be sold domestically at regulated prices – had lowered production incentives. Ongoing policy discussions over export taxes, revenue-sharing arrangements, mining permits and the possible centralisation of exports through a state-controlled entity have added yet more uncertainty. However, increasing demand owing to the Middle East crisis has improved export perspectives. As the largest flexible supplier of thermal coal to Asian markets, any reduction in Indonesia’s output or export availability has significant implications for seaborne supply.

Australia remains a major supplier of both metallurgical and high calorific value (CV) thermal coal to international markets. Domestic demand, including for lignite in Victoria, will continue to support some production, even as overall consumption declines. We expect output to reach 452 Mt in 2026, bolstered by a recovery in exports.

Elsewhere, coal production trends are being shaped by a mix of market conditions, logistics constraints and policy changes. Russia’s outlook remains uncertain, as trade sanctions, transport bottlenecks and weak profitability continue to weigh on producers, even as its coal remains attractive to some Asian buyers, particularly when offered at discount prices. Output in South Africa is expected to recover only modestly (+2.1%) from 2025 levels, despite rail disruptions on the Richards Bay corridor that continue to limit exports. Production and exports in Colombia are also rebounding from last year’s lows, despite temporary disruptions from blockades affecting Cerrejón, the country’s largest mine.

In the United States, domestic coal demand is forecast to decline by 7% in 2026, despite policy support. However, we expect production to fall by only 3%, as inventory rebuilding after the 2025 drawdown and stronger exports (driven by higher international prices) partly offset falling domestic consumption. European Union coal production is set to decline by 5.3%, in line with falling demand. A handful of member states still produce lignite, but following the closure of the Czechoslovak Youth Mine (CSM) in the Czech Republic, Poland is now the only remaining producer of hard coal in the bloc.

After years of supply growth running ahead of demand, global coal markets are gradually moved closer to balance. However, production is projected to increase slightly by around 26 Mt in 2027 and leaving global output above 9 Bt for a fourth straight year. This moderate upturn reflects a small rebound after the contraction in 2026 driven by Chinese restrictions, as a result of the accident in Shanxi in May. That follows in an ongoing historically high coal output, highlighting the enduring role of domestic coal in the energy systems of major producing countries.

China’s coal output is expected to recover in 2027 from the downturn caused by the mining accident in 2026 to stabilise domestic production. Production levels continue to be influenced by domestic demand, the competitiveness of imports and energy‑security considerations. India, by contrast, is projected to set another production record, with growth increasingly driven by captive and commercial mines, while Coal India Limited adjusts its output in line with demand and inventory levels. Indonesia is likely to see a further decline in coal production, although the fall should be less pronounced than in 2026 as the slowdown in export demand moderates.

In the United States, coal production is projected to fall further, as the structural decline in domestic demand outweighs the effects of higher exports and coal-friendly government policy. Australian output is also expected to edge lower, constrained by mine-level factors and a limited scope for expanding thermal coal supply. In Russia, production is also likely to remain under pressure as trade sanctions, weak profitability and high debt levels continue to weigh on coal producers. South African output could increase marginally if rail performance improves, although transport bottlenecks will remain a key constraint. In Colombia, production is expected to stabilise in 2027 following the recovery in 2026, while any boost from the new Administration’s more supportive stance toward the coal sector is likely to materialise only over the longer term. Coal production in the European Union is set to continue its decline as coal demand declines and coal phase-outs advance across the bloc.