Australia coal exports rise on Asian demand

The International Energy Agency now expects global coal demand to rise 1.2% to a record 8.94 billion tonnes in 2026, reversing earlier expectations of decline. A closure of the Strait of Hormuz has forced Asian buyers to lean harder on coal as a substitute for disrupted gas supplies, according to analysts and miners. Japan and South Korea are among the countries increasing coal use to replace scarce and expensive oil and gas, while electrification of transport could also keep coal in the system longer than many green-transition models assumed.

Australia is well positioned to capture that demand. It is the world’s second-largest coal exporter, and an industry outlook shows annual thermal coal exports rising by 8 million tonnes to 213 million tonnes in 2025-26. In New South Wales, where 37 coal mines operate, the state approved a 19-year mine extension last week that will generate 809 million tonnes of emissions, most of it released overseas when the coal is burned. Yancoal, the Chinese-backed miner, said it set a production record in the first half of 2026, digging up 19.8 million tonnes of saleable coal, up 4%.

For the market, that keeps a floor under producers such as BHP, Rio Tinto and Glencore, even if the long-term energy transition remains intact. Their shares have already reflected that resilience: BHP trades around the high $80s after a volatile run, while Rio Tinto has held above its long-term trend even after recent weakness. Coal equities may not be the market’s favorite climate trade, but the sector is still benefiting from supply shocks, not ideology.

The deeper investment lesson is that energy transition is rarely linear. Governments can push renewables, households can install solar and policymakers can set emissions targets, yet coal still surges when security trumps decarbonization. Australia’s own minister says short-term demand spikes should not be mistaken for a reversal, but they do underline the durability of fossil-fuel cash flows when the world gets nervous.

For long-term investors, that means coal remains a cyclical, politically fraught but economically relevant part of the energy mix. The better question is not whether coal will vanish tomorrow, but which producers can harvest today’s demand without being stranded by tomorrow’s policy shift. That makes the big miners and the coal-heavy regions worth watching, even for investors who prefer to own the transition rather than resist it.