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Friday, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
 Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest privately owned coal company and the biggest U.S. coal producer, has finally acknowledged a long-apparent reality: Thermal coal mines in the U.S. have little value anymore and not much of a future.
The company said as much earlier this month when it slashed the book value of the largest coal mine in the country—the North Antelope Rochelle mine in Wyoming’s Powder River Basin—by $1.42 billion, or 22% of Peabody’s total asset value.
When Peabody emerged from bankruptcy three years ago after having discarded $5 billion of its unsustainable $10.1 billion debt load, CEO Glenn Kellow said the company was “well positioned to create substantial value for shareholders and other stakeholders over time,” and that Peabody had “taken significant steps to create a capital structure to succeed through all cycles.”
On its first full day of trading after that—on April 4, 2017—Peabody’s stock price closed at $27.25. After the company’s most recent earnings release on Aug. 5, the stock closed at $2.90, a drop of almost 90% after the company’s supposed comeback.
Peabody’s North Antelope Rochelle write-down is simply a reflection of the new reality in U.S. coal-mining that has been evident almost since the moment the company came out of bankruptcy. The industry continues to be battered by rapid structural decline driven by low gas prices, the low and falling cost of building wind and solar power generation, and sweeping initiatives by utilities and corporations to cut emissions. Peabody conceded the obstacles, almost word-for-word, in its earnings release.
DEMAND FOR COAL IS IN FREE FALL. In 2018, U.S. utilities consumed 637 million tons of thermal coal, and an additional 54 million tons were exported. This year, utilities are likely to reduce their consumption to 377 million tons, a 41% decrease over two years, while exports of thermal coal may fall to 25 million tons, a 50% drop over the same period, according to the latest short-term forecast from the Energy Information Administration.
Coal company bankruptcies more recent than Peabody’s, including Westmoreland Coal, Cloud Peak Energy and Blackjewel, have all drawn little investor interest, with mine values approaching zero, and in some cases, essentially negative asset valuations because of the significant payouts needed to coax financially weak buyers to take on huge cleanup liabilities.
Most of this action has centered on the Powder River Basin (PRB), the single biggest repository of U.S. coal, and one that has been beset by intractable problems for years.
Peabody, with some of the best economies of scale in the PRB and global expertise in coal mining, should have been well-positioned to outlast financially weaker and smaller rivals. But instead, the industry—Peabody included—embraced a perverse business model. The companies have been enabled by a lenient bankruptcy process and feeble oversight by federal and state regulators that has allowed companies to continue mining coal and undercutting each other on price while shirking their cleanup obligations, falling far behind on royalty and tax payments, and investing little capital in mine upkeep—all while spiraling toward bankruptcy anew.
ECONOMICALLY SPEAKING, THIS CAN’T CONTINUE. The U.S. thermal coal market has a vast oversupply of product chasing fewer and fewer customers. An orderly retreat would make sense, but instead, chaos reigns.
The growing probability is that the collapse of U.S. coal mining will be disorderly, resulting in bankruptcies that end in liquidation, abrupt mine closures, the abandonment of cleanup obligations, and possibly the financial collapse of some bonding companies that are supposed to be the backstop for those liabilities.
State and county finances are already at great peril in the Powder River Basin, as falling asset values and production reduce tax and royalty payments, adding to the pain of lost paychecks and damage to local businesses.
What seemed to be a slow-moving catastrophe not too long ago has gained momentum, and Peabody’s huge write-down is a stark warning that coal mining’s financial distress will continue.
Seth Feaster is an IEEFA data analyst.
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Friday, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business ye ...
Friday, 04 September 20
KOMIPO INVITED BIDS FOR AUSTRALIAN MIN 5,700 NCV COAL FOR NOVEMBER
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 260,000 MT Min.5,700 kcal/kg NCV coal November, 2020 loading. Acc ...
Thursday, 03 September 20
BRINGING SERVICES OF FTCCI CLOSER TO THE EXPORTERS AT GMR AIR CARGO COMPLEX AT SHAMSHABAD
Press Release: “FTCCI Trade Facilitation Services at your doorstep now” says J.S. Chandrashekar, IRS., Principal Commissioner of Custom ...
Thursday, 03 September 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 02 September 20
COAL PRODUCTION FALLS 7% IN APR-AUG; OFF TAKE DIPS 13.4% - FINANCIAL EXPRESS
In the month of August coal off take also increased 9.3% y-o-y to 44.34 MT as compared with 40.57 MT in the same period last year.
C ...
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- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Parliament of New Zealand
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- PTC India Limited - India
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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