World coal producers have been under constant pressure in recent years because of falling export prices arising from oversupply and the Asian slowdown. This has resulted in a dynamic market place, a sharpening of focus on bottom line costs and some rationalisation of participants. Productivity has increased dramatically as many inefficiencies, typical of the coal industry, have been eroded through workplace reform. This is true for the both open cut and underground sectors of the industry. At the same time, the technology of underground mining is undergoing dynamic change. Mine operators are implementing better exploration and planning tools and are also starting to make gains against chronically low equipment availability and utilisation. Step-change' improvements in output are imminent. As the statutory environment shifts to a duty of care' regime, it is hoped that mine safety performance will improve, particularly with regard to fatalities. The focus of the paper is on the Australian coal sector, although references to international benchmarks are made. Despite environmental threats to the future of coal, it is concluded that the next ten years will see impressive performance results from underground coal mines which will assist coal to maintain its position as the preferred fuel of lowest cost.