Coal Mining

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 370 coal producers in the US sell coal to electric utilities, industrial facilities, steel manufacturers, and energy marketing firms or traders. Exports are also an important market for US coal producers. Coal mines are classified by their mining method and the type of coal they mine. Surface mining is the predominant mining method, particularly in western states, while underground mining is often used in eastern states. Coal varies by its heat content, ranging from lignite (the lowest grade) to subbituminous, bituminous, and anthracite (the highest grade).

Environmental Compliance

Coal producers are directly impacted by a wide range of environmental regulations that affect the permitting, operation, and reclamation of mining sites.

Competition for Electric Power Generation

About 92% of US coal consumption is used for electric power generation and the US has 571 coal-fired generating units in operation at 468 plants across the country.

Industry size & Structure

The average coal mining company in the US operates 1-2 mines, employs about 112 workers, and generates $72 million in annual revenue.

    • The US coal mining industry consists of about 370 companies operating 669 mines, employing 41,600 workers, and generating $27 billion in annual revenue.
    • Electric power generation accounts for 91% of US coal consumption.
    • The US has a total productive capacity of almost 933 million short tons of coal. Surface mines represent 67% of this capacity, while underground mines are 33%.
    • The industry is highly concentrated: the top 20 companies account for 77% of annual production.
    • The largest US coal producers are Peabody Energy, Arch Coal, Contura Energy, Navajo Transitional Energy Company (NTEC), and CONSOL Energy.
    • The largest coal producing states are Wyoming, West Virginia, Kentucky, Pennsylvania, Illinois, Indiana, and Montana.
    • The largest underground mine in the US is the River View Mine in Kentucky, producing over 9.4 million short tons annually. The largest surface mine in the US is the Northern Antelope Rochelle Mine in Wyoming, producing just over 66 million short tons annually.
                                      Industry Forecast
                                      Coal Mining Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Nov 25, 2022 - COP 27 Repeats Call for Phasedown of Coal
                                      • Like last year, the agreement reached at the 2022 United Nations Climate Change Conference COP27 conference in Sharm El Sheikh, Egypt calls for a phasedown of unabated coal power, and “phase-out of inefficient fossil fuel subsidies,” but does not go further to call for a phase-out of all fossil fuels, including oil, gas and coal. The Glasgow Climate Pact, for the first time, called on nations to phase down unabated coal power and inefficient subsidies for fossil fuels. One of the hardest-fought phrases in the Glasgow agreement is a commitment to “phase down” coal-fired power generation. Originally that was a phase-out, but India insisted on the change, despite pleas from other developing countries. According to the World Bank, some 46 countries count on oil rents for at least 1% of their GDP, while just three nations are as dependent on coal.
                                      • President Biden’s pledge at a November 2022 campaign event to shut down coal power plants and replace them with wind and solar power drew quick criticism from Republicans and the coal industry. Coal advocacy group America’s Power took issue with the president’s assertion that coal plants are too expensive to operate, arguing that replacing coal power plants with wind farms would cost $1.2 trillion to provide the same reliability that coal power plants offer to electricity consumers and that billions of dollars would have to be spent to build new electric transmission lines to deliver wind power to consumers. The White House’s Green energy agenda – which calls for replacing fossil fuels with clean energy alternatives – includes several measures to restrict future coal production and regulate emissions from coal-fired plants.
                                      • The US Energy Information Administration (EIA) in October 2022 released its Annual Coal Report (ACR) with final data for 2021. The report shows that US coal production increased 7.8% year over year in 2021 to 577.4 million short tons (MMst). The total productive capacity of US coal mines decreased 6.6% from the 2020 level, while the average number of employees at US coal mines declined by 2,641 from the 2020 level to 39,518 employees. Other key ACR findings showed US coal mining productivity, as measured by average production per employee hour, increased 9.5% from the 2020 to 6.71 short tons per employee hour. Notably, coal consumption in the United States increased 14.5% from the 2020 level to 545.6 MMst, with the electric power sector accounting for about 91.9% of total US coal consumed in 2021.
                                      • Global coal consumption is expected to return to record levels set in 2013 as the global energy crunch grinds on, CNBC reported in August 2022. Despite concerns over coal’s contribution to global warming, energy markets and governments are stocking up on coal amid fuel shortages caused by the war in Ukraine. A July Coal Market Update from the International Energy Agency (IEA) said that global coal consumption is set to rise by 0.7% in 2022 to match the record set in 2013 (assuming the Chinese economy recovers in the second half of the year). Moreover, coal demand is likely to increase further in 2023 to a new all-time high, according to the IEA’s update.
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