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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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Wednesday, 17 June 20
KOREA SOUTHERN POWER CO INVITED 80000 MT OF LOW CALORIFIC VALUE COAL FOR AUGUST 1H, 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) Min 4,200 kcal/kg - Max. ...
Tuesday, 16 June 20
A GLOBAL ECONOMIC SLUMP: WHAT WILL IT MEAN FOR METALS AND MINING? - WOOD MACKENZIE
Back before coronavirus knocked “normal” out cold, the key issues for miners were sub-investment prices, rising requirements for ESG an ...
Tuesday, 16 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.58 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.43 points Monday, up 0.58 percent week on week.
The index, released by China ...
Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other gl ...
Tuesday, 16 June 20
SHALE SHOCKED - WOOD MACKENZIE
Capturing shut-ins in real time
Oil markets are searching for balance as the world reflects on the impact of the COVID-19 pandemic. ...
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- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Economic Council, Georgia
- Eastern Energy - Thailand
- Planning Commission, India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
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