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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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Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
Saturday, 01 August 20
SHIP SHAPE - OUCH: FIS
Thursday afternoon saw a report that US GDP in Q2 shrank by 32.9%. Now this may have beaten expectations, but it’s a bit like saying that you ...
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- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- PTC India Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Parliament of New Zealand
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
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