What happened

Shares of coal-mining outfit Peabody Energy (BTU -0.13%) closed Wednesday's session trading 11.7% higher, according to data from S&P Global Market Intelligence, buoyed by soaring coal prices that confirm the dirty fossil fuel is still a cost-effective means of producing electricity.

So what

Once presumed to be a fuel of the past, coal is back in vogue.

Blame high crude oil and natural gas prices, mostly. Although the costs of both have peeled back from their June highs, neither central governments nor utility companies are completely convinced their prices won't soar again. That's why both are reopening their minds to coal, despite its adverse environmental impact. German power producers are paying premiums for coal, for instance. They used it to produce nearly 30% of the country's power during the first half of the year after Russia's invasion of Ukraine -- and the world's response to it -- disrupted Germany's natural gas supply. China imported more Russian coal in August than it has at any point in the past five years. South Korea is burning more of it too, as are many other countries.

End result? Coal is now going at rates of about $324 per ton. That's down slightly from a recently hit record, but up 55% from year-ago levels, and nearly 500% higher than market prices from two years back.

The tailwind bodes well for all coal mining stocks, which have collectively surged by more than any other industry this year. Peabody Energy only recently plugged into this broad strength, though, with Wednesday's 11% rally dragging the stock higher by 26% for the week so far.

Now what

The tailwind is real. Despite record-breaking coal prices, the International Energy Administration believes coal consumption will reach record levels this year. Although some analysts suggest this price surge could dissipate as quickly as it developed, the sheer scope of the recent surge in natural gas and crude oil pricing should keep coal on power producers' radars for far longer than was considered likely just a few years ago when the clean-energy revolution was just getting started.

However, for most investors, too many uncertainties and too much volatility remain in the coal space. Peabody Energy and its peers remain mostly speculative plays on an industry that still faces an existential crisis, even if that crisis has been pushed further out into the future.