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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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- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
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- Planning Commission, India
- The Treasury - Australian Government
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- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
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- PowerSource Philippines DevCo
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- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
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- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
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