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IN RICH countries, where people worry about air quality and debate ways of pricing carbon emissions, coal is deeply unfashionable. Elsewhere demand for the dirty rocks has never been stronger. The International Energy Agency (IEA) reckons world consumption will increase by a fifth over the next 25 years, assuming governments stick to their current climate-change policies. A new age of coal is upon us.

The IEA estimates that China, which generates more than 70% of its electricity with coal, will build 600 gigawatts (GW) of coal-fired power capacity in the next quarter-century—as much as is currently generated with coal in America, Japan and the European Union put together. Nomura, a Japanese bank, thinks that may be an underestimate. It reckons China will add some 500GW of coal-fired power by as early as 2015, and will more than double its current generating capacity by 2020. It expects Indian coal-fired power generation to grow too—though more slowly.

Even developing countries with vast quantities of coal under home soil will find themselves unable to dig it out quickly enough to meet demand. China, the world's biggest coal producer by some distance, has turned to foreign suppliers over the past couple of years and is likely to rely on them even more in future. Its voracious appetite for energy and steel means it will need at least 5-7% more coal each year. Citigroup reckons China will import 233m tonnes in 2011. As Daniel Brebner of Deutsche Bank points out, that is considerably more than the annual capacity of Richards Bay in South Africa or Newcastle in Australia, the world's biggest coal ports.

Domestic supply has failed to keep up with demand for several reasons. China's coal is located in the north and west of the country, far from the coastal cities where energy demand is growing strongly. And China's mines are old. The coal is deep underground and expensive to extract. Congested railways and roads mean domestic deliveries can be less reliable and pricier than the imported sort. Production has also been hit by government attempts to close inefficient (and dangerous) smaller mines and encourage consolidation.

China's efforts to improve coal supplies include the building of a new east-west passenger railway line, set to open in 2013, which should free existing tracks for coal transport. New high-speed and light railways across the country may alleviate bottlenecks further. But for the foreseeable future the country will depend on ships laden with foreign coal.

India is even less capable of increasing coal production. Much of its impressive reserves sit under protected forests or land set aside for ethnic minorities. The country's creaking railways make it hard to move the stuff, as does the absence of a mechanism to negotiate bulk rail contracts. And Indian coal is generally of poor quality, which makes it unsuited to newer, more efficient, coal–fired power stations. India could become the world's biggest thermal coal importer by 2015. It is already largely dependent on imports of coking coal, used to make steel.

All this is good news for the mining industry. Nomura reckons that thermal coal will hit a peak price of $170 a tonne in 2012 compared with $110 now. Asian firms will benefit most. Indonesia is now the biggest source of imports to China because of its proximity to the country and the high quality of its coal (see article). Indonesia has few proven reserves, but high prices may well spur further exploration. Mongolia, which is also handily close to China, and Mozambique could join Australia, South Africa and Colombia as big exporters.

The coal boom has spurred a sackful of deals. The industry produced a record number of mergers and acquisitions last year, with a value of $52 billion, according to Dealogic, a financial-information firm. Rio Tinto, a global mining giant, has offered A$3.9 billion for Riversdale, which has mines in Mozambique. Chinese state-backed firms are also investing abroad. Yanzhou's $3.5 billion purchase of Australia's Felix Resources in 2009 is the biggest such deal so far.

Two potential giants may yet weigh in. America, the world's second-biggest coal producer after China, has mammoth reserves and a power industry that is turning against coal (currently responsible for almost half of domestic electricity generation). Environmental regulations and cheap shale gas will leave miners looking for new markets overseas. Russia, with vast coal reserves thousands of miles from the nearest port, might yet build the infrastructure needed to send its coal to the world market.

This boon for miners bodes ill for the environment. The power stations frantically being built in China to feed the country's new electricity grid will be relatively efficient and thus less polluting than older coal plants around the world. But that is a rather low bar. Coal is the filthiest fossil fuel and is cheap only because its dirtiness isn't included in the bill.

Indeed, the coal boom blows yet another hole in the effort to restrain greenhouse-gas emissions. The Kyoto protocol makes countries responsible only for their own direct emissions. As environmentalists point out, rich countries that spurn coal-fired power while exporting the rocks to countries with less ambitious emissions targets are merely shifting the problem around the globe. Even China's modest hopes of bringing its share of coal-fired power down to 63% by 2015 sit ill with its growing dependence on coal. Alongside coal-fired power stations and coal exports, a coal conundrum is growing.