There must be a kaleidoscope in the middle of the coal industry, because I'm seeing things getting flipped around.

Earlier in the week, steelmaker ArcelorMittal (NYSE: MT) marched into met coal mania by manifesting interest in making M&A with Massey (NYSE: MEE).

As you can see, those events were brought to you by the letter "M."

With the coal world watching, Walter Energy (NYSE: WLT) went wild with a wish to wed Western Coal. That $3.24 billion deal is clearly brought to you by the letter "W," which of course is just an upside-down "M."

If you're looking for the common denominator, it all comes down to steel, and the crystal-clear outlook for long-term growth in global steel demand. As my top coal pick, Peabody Energy (NYSE: BTU), recently explained, steel consumption is expected to grow by 30% worldwide over the next five years. Dry bulk hauler Diana Shipping (NYSE: DSX), for its part, sees a 14% surge in global coking coal shipments for 2011. With that kind of demand growth afoot, a major spike in consolidation activity comes as no surprise.

With the addition of Western Coal to its high-quality portfolio of metallurgical coal, Walter Energy fashions itself as the "leading, publicly traded 'pure-play' metallurgical coal producer in the world, with unique and strategic access to steel-producing markets in both the Atlantic and Pacific Basins."

Nonetheless, the scale of the combined asset portfolio will fall well shy of its competitors. With 1.3 billion tons of met coal reserves, Massey Energy's stash is more than three times the size of Walter's pro forma reserves following the acquisition of Western. Walter will be an attractive pure play, but still a medium-sized fish in an ocean of leviathans.

In an unexpected twist, Massey Energy also revealed this week that it may pursue some M&A of its own, even as it reiterated interest in fielding additional offers for a buyout. Alpha Natural Resources (NYSE: ANR) has also revealed its growing zeal for acquisitive growth, and Fools can expect Peabody Energy to select an alternative to its failed bid for Australia's Macarthur Coal. Fools are encouraged to keep looking through coal's kaleidoscope, as further variations on this theme are destined to play out before our eyes.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.