CANBERRA (Realist English). The closure of the Strait of Hormuz and disruptions to liquefied natural gas supplies have forced countries in Asia and Europe to return to coal‑fired generation. Prices for thermal coal have soared by 20–30%, while shares of major producers have gained up to 57%.
South Africa’s Thungela Resources nearly sextupled its profit, and Australia, according to Westpac estimates, will receive a multi‑billion‑dollar windfall for its budget through 2030.
Global energy shock and the return to coal
The US‑Israeli war against Iran, which began on 28 February, led to the effective closure of the Strait of Hormuz, through which approximately 20% of global LNG supplies pass. This triggered a global energy crisis and an unexpected return to coal – the “dirtiest” fuel that the world had been trying to phase out.
According to The Wall Street Journal, countries around the world are returning to coal‑fired generation.
Taiwan is restarting previously idled coal plants, while South Korea increased coal‑fired generation by 36% and 39% in March and April respectively. Italy has placed its coal plants on standby, and Japan is signalling plans to increase coal use to compensate for the energy shock.
Coal price surge
The Asian price benchmark is Australian coal from the port of Newcastle. Its price has risen by 20–30% since the start of the war:
| Period | Price (Newcastle, per tonne) |
| Before the war (27 February) | $115.96 |
| Peak (mid‑March) | 140 $ |
| Peak (mid‑June) | $150.25 |
| Late July – August | $131–134 |
At the same time, the current price rise is significantly more modest than the spike to $440 per tonne following Russia’s invasion of Ukraine in 2022.
South Africa: Thungela’s profit surges sixfold
South African coal company Thungela Resources, listed in Johannesburg and London, reported on 17 August that its first‑half 2026 profit had risen almost sixfold – to R1.4 billion ($86.6 million). The company attributed this to improved coal prices and higher sales volumes amid the Iran war.
| Indicator | H1 2025 | H1 2026 | Change |
| Profit | ~R0.24 billion | R1.4 billion | 461 % |
| Revenue | — | R15.2 billion | — |
| Export sales | — | 9.5 million tonnes | 12 % |
| Earnings per share | R1.92 | R4.80 | 150 % |
Source: Thungela Resources report
The company’s revenue for the first half reached R15.2 billion, with nearly half of that amount coming from sales to India. Export sales rose 12% to 9.5 million tonnes. Coal prices in South Africa and Australia, where Thungela also operates, rose by 15% and 25% respectively.
CEO Moses Madondo said Thungela is exploring opportunities to invest in new mines, expecting “enormous” demand for coal in India.
Since the start of the war, Thungela’s shares have gained 57%, adding R9 billion to its market capitalisation. Another major South African producer, Exxaro, also benefited from the price rally, with its market value rising by more than R6 billion.
Australia: a multi‑billion‑dollar windfall for the budget
Australia, the world’s second‑largest coal exporter, has become one of the main beneficiaries of the war. Westpac Banking Corp forecasts that the country will receive a multi‑billion‑dollar windfall from higher coal and gas prices.
Westpac economist Pat Bustamante estimates that higher prices will deliver Australia’s budget about A$20 billion ($14 billion) in additional revenues over the five years to 2030. The total windfall from the conflict over this period could reach nearly A$60 billion (~$45 billion).
Australian coal exports have already shown sharp growth: in April 2026, they rose 25.1% compared to the previous week. In June 2026, Asian thermal coal imports reached 77.37 million tonnes – a six‑month high. South Korea increased purchases of Australian coal by 179% and 189% in January‑April 2026.
Expert opinion: ‘Coal remains the cheapest and most reliable source’
Lars Schernikau, visiting fellow at the National Centre for Energy Analytics, told Anadolu Agency:
“The sharp rise in gas prices due to supply disruptions has pushed up prices across the entire energy mix, including coal. Coal remains the cheapest, safest and most reliable way to generate electricity.”
Ufuk Alparslan, Ember’s regional lead for Turkey and the Caucasus, warned:
“The return to coal is not a confirmation of its strategic importance, but a symptom of fossil fuel volatility. True energy security lies in developing renewables, which reduce dependence on global market volatility.”
Analysis: windfall profits amid environmental risks
For South Africa and Australia, the Iran war has become an unexpected economic boon. Coal companies are posting record profits, and governments are receiving additional tax revenues. Thungela has already announced plans to invest in new mines, and Australia, according to estimates, will receive tens of billions of dollars in additional revenue.
This profit comes at a high environmental cost. The return to coal undermines years of efforts to decarbonise and combat climate change.
Moreover, as analysts note, the current rise in coal prices is significantly more modest than the spike following the start of the special military operation in Ukraine, and the industry’s long‑term prospects remain uncertain amid the global energy transition.
