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

                                      Mar 27, 2023 - Coal Prices Retreat
                                      • Coal prices are expected to be lower, on average, this year compared to 2022, but will remain high by historical standards, according to the World Bank’s Data Blog (WBDB).The decline in the price of coal reflects a reshaping of global energy trade, which got a jolt from Russia’s invasion of Ukraine. Global demand for coal reached an all-time high last year driven by increased consumption in India (+10%) and in Europe (+5%) in response to electricity generating facilities substituting away from Russian natural gas and filling the supply gap created by weaker production from other sources, including nuclear and hydro, according to the WBDB. Coal consumption in the US, however, fell by 8% in Q4 2022 due to less significant natural gas price increases compared to Europe, which limited the substitution between coal and gas for electricity generation here.
                                      • US coal production will decrease 9% year over year to 539.2 million short tons in 2023, according to US Energy Information Administration estimates. "Uncertainty in macroeconomic conditions could significantly affect energy markets in the forecast period," the EIA said. US domestic coal consumption also is expected to decline this year amid increased electricity generation from renewables, according to EIA data. The agency projects the US will generate 952.6 billion kilowatt-hours from renewables and 770 billion kilowatt-hours from coal in 2023, compared with 882.3 billion kilowatt-hours and 824.6 billion kilowatt-hours, respectively, in 2022.
                                      • Increasing US power generation from new renewables capacity – mostly wind and solar – will reduce generation from both coal-fired and natural gas-fired power plants in 2023 and 2024, the US Energy Information Administration (EIA) reported in January. With new solar and wind projects coming online this year, the EIA forecasts these two energy sources will account for 16% of total generation in 2023, up from 14% last year and 8% in 2018. In contrast, the agency’s forecast share of power generation from coal falls from 20% in 2022 to 18% in this year. The 2% decline in coal generation in 2023 comes as lower natural gas fuel costs make coal a less competitive source for electricity supply. The EIA forecast of coal generation falls again in 2024 to 17%.
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