There are four main coal types: lignite, sub-bituminous, bituminous and anthracite. Here’s a look at their characteristics and uses.
Coal is a fossil fuel that is, essentially, “the altered remains of prehistoric vegetation,” as the World Coal Association (WCA) puts it. However, there are a number of different coal types.
Coal began to form during the Carboniferous period, which took place between 360 and 290 million years ago. Plant matter accumulated in swamps and peat bogs, and after being buried and exposed to high heat and pressure — largely due to the shifting of tectonic plates — it was transformed into coal.
The WCA explains that the quality of coal is largely determined by:
- The type of vegetation the coal originated from;
- The coal’s depth of burial;
- Temperatures and pressures at that depth; and
- How long it took the coal to form.
All of these factors contribute to “the degree of transformation of the original plant material to carbon,” and it is carbon content that determines a coal’s “rank.” Higher carbon content is associated with coal that has spent a longer time forming, while lower carbon content is a characteristic of “younger” coal.
Here’s a look at the four main coal types, arranged from lowest to highest carbon content, as well as explanations of what they are used for.
Coal types: Low-rank coals
- Lignite is the youngest type of coal. It is soft and ranges in color from black to shades of brown. As a result, it’s sometimes called brown coal. Lignite is mainly used for power generation and accounts for 17 percent of the world’s coal reserves.
- After millions of years, continued pressure and temperature convert lignite into sub-bituminous coal. It burns more cleanly than other types of coal due to its low sulfur content. Sub-bituminous coal has applications in power generation and also in industrial processes. This coal type makes up 30 percent of the world’s coal reserves.
Coal types: Hard coals
- Bituminous coal is harder and blacker than lignite and sub-bituminous coal, and can be divided into two types: thermal and metallurgical. Together, they make up 52 percent of the world’s coal reserves. This coal type is mostly used for power generation, cement manufacturing and other industrial purposes, while metallurgical coal is used primarily for making iron and steel.
- Anthracite is the most mature coal and thus has the highest carbon content of any type of coal. It is frequently used for home heating and, accounting for about 1 percent of the world’s total coal reserves, represents a very small portion of the overall market. Anthracite can be used as a smokeless fuel in domestic and industrial contexts.
As you can see, while coal types are often painted with the same brush, there’s more than one variety out there. Getting to know the differences is key for energy investors evaluating companies and projects.
For a closer look at the different coal types and their uses, check out our other articles on the subject:
- Coal 101: A Look at Lignite
- Coal 101: Sub-bituminous Coal Explained
- Coal 101: An Overview of Bituminous Coal
- Coal 101: What is Anthracite?
And if you want to start investing in coal, read our Introduction to Coal Investing.
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This is an updated version of an article published by the Investing News Network on October 11, 2013.
Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.