The past decade has been a period of rapid expansion for Chinese coal consumption, maintaining breakneck speed year after year. At a growth rate of 10%, the Far Eastern giant will soon account for half the world's production and consumption of the resource.

But according to the experts, a dearth of domestic supply is about to put the brakes on the industry.

China's already finding it tough to keep up with its outsized domestic demand -- in three years alone, the country's coal companies spent upwards of $20 billion on overseas acquisitions. Policy makers are now considering putting a cap on coal output, lest the nation run through its reserves too quickly.

But government restrictions or no, it seems unlikely that China will be able to keep up the pace they've set.

Euan Mearns, energy analyst at The Oil Drum, predicts that "Chinese production growth in 2010 will be significantly less than 10%," and "we will see a plateau develop" between now and 2015.

So what happens if China can't meet its resource demands with its domestic supply? One outcome would be a scale-back of consumption. But seeing as the Asian powerhouse isn't exactly known for conservation, it's more probable that instead, they'd start buying their coal on the international market.

With China being the gluttonous energy consumer that it is, the world would have a tough time keeping up with their needs. The likely result? A dramatic spike in coal prices, bad news for a global economy that relies on procuring its energy on the cheap.

It's hard to say exactly when Chinese coal will hit its peak. But given that the country has already blown through 37% of its resources, it could be a lot sooner than most people think. If China's resources are running on empty, it's not a bad idea to know which coal companies stand to gain from it ...

Here's a list of the top performing coal companies over the last year. We'll also list the five-year sales growth for each company. Use this list as a starting point for your own analysis if you want to gain exposure to this trend. (Click here to access free, interactive tools to analyze these ideas.)

Company

Sales Growth Over Past 5 Years

Performance (Year)

Alliance Holdings GP, (Nasdaq: AHGP)

13.50%

100.82%

Alliance Resource Partners (Nasdaq: ARLP)

13.51%

67.71%

Westmoreland Coal (NYSE: WLB)

5.93%

54.47%

Natural Resource Partners (NYSE: NRP)

16.09%

54.18%

Yanzhou Coal Mining Co. (NYSE: YZC)

13.88%

49.53%

Interactive Chart: Press Play to compare monthly and annual returns for all stocks mentioned above.


 

Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

Alliance Resource Partners LP is a Motley Fool Income Investor pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.