"I Love Coal!"

The title is obviously a tagline from the 2002 movie Austin Powers in Coalmember.

Coal is a dirty, antiquated source of energy yet it seems pretty clear that China is not going to make any meaningful changes to its coal consumption habits anytime soon. One part of the coal stock world that stands to benefit from China’s demand (aside from Chinese coal companies) are Australian coal companies. The FT reported that Gloucester Coal (GCL in Australia and GCRLF on the US pinksheets) ordered five bulk carriers to meet expected demand from China. A couple of other names from Australia include MacArthur Coal (MCC in Australia and MACDF on the US pinksheets) and Centennial Coal (CEY in Australia and CCOAF on the US pinksheets).

There is a lot of news to keep track of here in terms of deals and takeovers. Felix Resources, another name in the space, appears to be in a deal to be acquired by Yanzhou Coal (NYSE: YZC).

Fortunately there are ETFs to address this space which will be a time saver if nothing else. The PowerShares Global Coal Portfolio (Nasdaq: PKOL) has a 23% weighting to Australia and an 18% weight to China. The Market Vector Coal ETF (NYSE: KOL) captures less of this theme by weighting 46% to the US and only 5% to Australia.

That China will very likely continue to use coal also likely gives a bid to stocks that clean the air and water in China like (NYSE: DGW) and (Nasdaq: APWR).

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