Coal Mining

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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 91% of US coal consumption is used for electric power generation and the US has 601 coal-fired generating units in operation at 481 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

                                      Coronavirus Update

                                      Apr 22, 2022 - Mines Invest In Infrastructure
                                      • Amid strong demand and high prices for coal, underground coal operators are investing in infrastructure to improve safety and reduce downtime. Longwall mines are adopting new tools to prevent roof collapses and extend mine life. Roof bolter OEM J.H. Fletcher & Co. is developing several new concepts to improve the operating conditions for roof bolting machine operators, reports Coal Age. The focus is on boosting the efficiency of the roof bolting process, which allows bolting machine operators to install more bolts, more quickly, while maintaining effective support. Demand for tensionable cable bolts remains strong according to Jenmar, a leading industry supplier. A roof collapse at a mine in Kentucky killed a roof bolt operator in March 2022.
                                      • In response to low vaccination rates, the Mine Safety and Health Administration (MSHA) has launched the Miner Vaccination Outreach Program, designed to encourage and facilitate coronavirus vaccinations for miners and their families in Kentucky and Arizona. Miners often work in close proximity to each other, resulting in quicker spread of the virus in the mining community. Participation in the program is voluntary and free for mine operators in both states.
                                      • Asian and European countries that rely on coal from Russia are looking for alternate suppliers. Sanctions and embargoes on Russian products, coupled with the halting of financial transactions with most Russian banks, will create supplies shortages. It’s unclear if the US coal industry would provide some supply. Coal prices have jumped to US$288.40 per metric ton in Indonesia and topped US$100 per ton in the US for the first time since 2008.
                                      • Industry observers suggest that natural gas prices must be at least $3 per million Btu before power producers will consider switching back to coal. The price that the electric power industry pays for natural gas averaged $4.69 per million Btus in February 2022. The Russian invasion of Ukraine and resulting natural gas supply disruptions in Europe may affect prices globally. The monthly average price of natural gas has been over $3 per million Btu since the middle of 2021 and is forecast to remain over $3 through 2023, according to the US Energy Information Administration.
                                      • American coal production is forecast to increase 4% in 2022 and 1% in 2023, according to the US Energy Information Administration. The expected increase is due to more demand and higher prices for coal in the electric power sector because of higher natural gas prices. Production has not kept pace with rising domestic demand for steam coal in the electric power sector and export growth. Coal producers are working to replenish inventories held by the electric power sector that were depleted in 2021. Coal exports are expected to increase 3% in 2022 and 3.4% in 2023.
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