The coal stocks are burning hotter, with related exchange traded fund testing its long-term trend line, as BHP Billiton (NYSE: BHP) points to a more optimistic outlook in the strained coal industry.

The Market Vectors Coal ETF (NYSEArca: KOL) has gained 1.8% over the past week and is up 1.7%, but the ETF is still down 4.8% year-to-date. KOL is now trading above its 200-day simple moving average. [KOL Connection: Downtrodden ETF Looks to Rebound]

Dean Dalla Valle, President of BHP Billiton, believes demand growth outside of China, which accounts for about half the world’s coal consumption, to increase, reports Rhiannon Hoyle for the Wall Street Journal.

“Over the next couple of decades we expect global growth in demand for both energy coal and metallurgical coal,” Dalla Valle said. “The likes of India, a country not overly endowed with metallurgical coal, [is]anticipated to be the most significant source of new demand.”

India is the world’s third-largest importer of coal behind China and Japan.

“Coal is expected to remain the centerpiece of Asia’s energy portfolio into the foreseeable future, where coal is the cheapest and most readily available source of energy,” Dalla Valle added.