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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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Thursday, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
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- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
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