As China's appetite for coal is booming, American investors and businesses are cashing in. American pension and mutual fund money is being invested in the Chinese coal industry, which is lucrative but in general has a poor record for pollution and worker safety. The biggest Chinese coal company is China Shenhua Energy Co. of Beijing, which produces about 170 million tons of coal a year from 21 mines and builds power plants. While about 80 percent of the company's stock is owned by Shenhua Group in Beijing, the rest of its shareholders reads like a who's who of U.S. investors: Fidelity Investments, OppenheimerFunds, Merrill Lynch, even the Teachers Retirement System of Texas.

Shares of Shenhua Energy jumped 65 percent between July and September.

In related news (as David pointed out yesterday), fully one quarter of China's carbon emissions can be linked to its exports to the U.S. and Europe.

Meanwhile, AP reports that Chinese industry is so ravenous for coal that it's about to become a net importer of the filthy stuff. U.S. coal companies, facing a mounting backlash against new coal-fired power plants here, are ecstatic at the prospect of conquering the fabled China market.

Massey Energy Co. of Richmond, Va., and International Coal Group of Scott Depot, W.Va., recently told investors they plan to increase metallurgical coal production to take advantage of rising world demand caused by China's transition from a coal exporter to an importer this year. And St. Louis-based Peabody spent $1.51 billion last year to buy its way back into Australia, a country it left several years ago, to export to China.

"In general, they're doing a very smart thing," said Mike Tian, an analyst with independent investment research company Morningstar. "That's where the money is."

In general, I think they're doing a very dumb thing; but it's hard to argue with the logic that "that's where the money is."