This study examines the history, current status and future prospects for increased coal use in Mexico. Environmental implications of the power-generation capacity expansion plans are examined in general terms. Mexican environmental law and regulations are briefly reviewed along with the new sense of urgency in the cleanup of existing environmental problems and avoidance of new problems as clearly mandated in recent Mexican government policy initiatives. It is expected that new capital facilities will need to incorporate the latest in process and technology to comply with existing environmental regulation. Technology developments which address these issues are identified. What opportunities have new initiatives caused by the recent diversification of Mexico`s energy economy offered US firms? This report looks at the potential future use of coal in the Mexican energy economy, examining this issue with an eye toward identifying markets that might be available to US coal producers and the best way to approach them. Market opportunities are identified by examining new developments in the Mexican economy generally and the energy economy particularly. These developments are examined in light of the current situation and the history which brought Mexico to its present status.