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