In a significant policy push, former U.S. President Donald Trump is reportedly directing the Pentagon to sign contracts with coal-fired power plants, aiming to revitalize the coal industry. The initiative is expected to be enacted via an executive order. Additionally, Trump may announce a U.S. Department of Energy plan providing $175 million in upgrade funding for six coal plants.
Ahead of Wednesday's market opening, several U.S. coal stocks rallied. Peabody Energy gained nearly 4%, while Coronado Global Resources rose over 2%. Core Natural Resources, Inc. and Warrior Met Coal each advanced more than 1%.
Notably, coal stocks in the A-share market also surged collectively on February 11. By the close, the coal sector had risen over 1%, significantly outperforming the broader market indices. This marks the third consecutive trading day of gains for A-share coal stocks. Some brokerages suggest that medium to long-term coal prices may gradually stabilize and rebound, supported by expectations of tightening overseas supply and recovering downstream demand.
According to Bloomberg, Trump's plan involves using government funds and Defense Department contracts to sustain U.S. coal plant operations, increasing domestic reliance on fossil fuels. A White House official indicated the core proposal would be announced via executive order on Wednesday, directing the Secretary of Defense to secure power supply agreements with coal plants for military operations.
Trump will also unveil a $175 million grant program targeting six coal plants across Kentucky, North Carolina, Ohio, Virginia, and West Virginia. The Department of Energy had previously outlined this funding in 2024, stating it aims to enhance plant efficiency and extend operational lifespans.
Coal industry executives, miners, and energy leaders are invited to the White House for the announcement. Bloomberg notes this represents Trump's latest effort to revive the struggling coal sector, over a decade after his initial campaign promise to "put miners back to work."
The move coincides with the Tennessee Valley Authority's plan to delay retiring two coal plants. Even before Trump's term, some utilities had sought to extend coal plant operations. With federal support and surging electricity demand from AI development, this trend is accelerating.
This is Trump's most recent action to bolster coal since his return to the presidency. A longtime advocate for the industry, he first pledged to restore mining jobs during his 2016 campaign.
In recent sessions, A-share coal stocks have continued climbing. During intraday trading on February 11, the sector initially fell 1% before rebounding sharply to gain nearly 1.6%. At the close, the sector was up approximately 1.3%, with Jiangxi Tungsten Group hitting the upside limit, Shanxi Coking Coal rising nearly 8%, Yankuang Energy Group gaining almost 5%, and Lu'an Clean Energy and Shanxi Huayang Group following upward.
Market analysts attribute the rally to price increase expectations. Indonesia plans to cut coal output from 790 million tons to about 600 million tons by 2026, a 24% reduction aimed at stabilizing global prices. Following the announcement, some Indonesian miners halted spot coal exports.
Zheshang Securities noted that strict enforcement of Indonesia's production quota could tighten global thermal coal supply, potentially reshaping the coal supply-demand landscape and significantly raising price benchmarks. Domestically, declining social inventories, pre-holiday mine closures, and regulatory policies may constrain supply, while post-holiday demand peaks in March, supporting higher coal prices.
With some coal firms reporting 2025 results, Founders Securities believes weak coal prices this year have established an earnings bottom, and future performance should improve as prices recover.
Kaiyuan Securities stated that current thermal and coking coal prices remain near historical lows, leaving room for rebounds. Supply-side policies curbing overproduction and seasonal heating demand may steadily improve fundamentals, supporting price elasticity for both coal types. Thermal coal benefits from long-term contract adjustments and profit-sharing mechanisms with power plants, while more market-driven coking coal may show greater sensitivity to supply-demand shifts. The sector offers both cyclical and dividend appeal, with institutional holdings at lows and fundamentals having turned positive, presenting a strategic entry point.
Guotai Junan Securities expressed optimism about rising global coal prices, confirming the cycle bottom occurred in Q2 2025. With supply-demand dynamics having reversed, coal and downstream power sectors are expected to enter a new upcycle starting in 2026.