Gaining access to coal exposure via an ETF is unsurprisingly thin on the ground, so we must venture to the US for an ideal vehicle – it tells you something about how the investment community views the commodity’s long-term future. The Range COAL ETF is the most purpose-built coal ETF available globally. It holds 34 companies across both metallurgical and thermal coal, with its top three holdings including Warrior Met Coal (10.7%), Yancoal Australia (8.3%), and Alpha Metallurgical Resources (7.8%). For local investors, it’s notable that YAL, WHC and BHP make up close to 20% of the ETF, posing the question of whether it’s easier just to buy the local names.
- We believe the thin ETF landscape actually reinforces the direct stock argument. If you want coal – WHC, YAL and NHC remain the cleanest, most concentrated expression of the trade available to ASX investors. The ETF route, whether domestic or global, either dilutes the position or forces you offshore into a small, less liquid product.
Coal is not going away quietly, or anywhere near as quickly as the energy transition narrative suggests. Despite decades of decarbonisation pledges, global coal demand hit a record 8.85 billion tonnes in 2025 and still generates roughly a third of the world’s electricity. The IEA’s best case sees demand falling by just 3% by 2030, with India adding over 200 million tonnes of new demand and Southeast Asia growing at more than 4% per year, largely offsetting declines in Europe and the US. By 2040, the direction is clearly downward, but the pace is slow, particularly across Asia where energy security and affordability remain the dominant priority for hundreds of millions of people who simply cannot wait for renewables to catch up. For investors in names like WHC and NHC, the demand floor is considerably more solid than the headlines imply, even if the long-term price ceiling is capped by the structural headwinds that build through the late 2030s.
- We like the risk/reward towards the COAL ETF around 4-5% below last night’s close.
