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 316 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 heat content, ranging from lignite (the lowest grade) to sub-bituminous, 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
According to the US Energy Information Administration (EIA), about 92% of US coal consumption is used for electric power generation, and coal supplies 16% of US electricity generation.
Industry size & Structure
The average US coal mining company operates 1-2 mines, employs about 135 workers, and generates $126 million in annual revenue.
- The US coal mining industry comprises about 316 companies operating 508 mines, employing 42,800 workers, and generating $40 billion in annual revenue.
- Electric power generation accounts for 92% of US coal consumption.
- The US has a total productive capacity of almost 872 million short tons of coal. About two-thirds of US coal production is from surface mines, while underground mines account for one-third.
- The industry is highly concentrated: the top 20 companies account for 77% of annual production.
- The largest US coal producers are Peabody Energy, Arch Resources, Navajo Transitional Energy Company (NTEC), Acnr Holdings, and Alliance Resource Partners.
- The largest coal producing states are Wyoming, West Virginia, Pennsylvania, Illinois, and Kentucky.
- The largest underground mine in the US is the Bailey Mine in Pennsylvania, producing over 11.5 million short tons annually. The largest surface mine in the US is Wyoming’s Black Thunder Mine, producing over 62.1 million short tons annually.
- According to the Bureau of Labor Statistics, employment by US coal mines is projected to fall 43.3% between 2022 and 2032, the sharpest decline of all industries.
Industry Forecast
Coal Mining Industry Growth
Recent Developments
May 27, 2024 - Producer Prices Easing
- Producer prices for coal mining firms ticked up 1.2% in March compared to a year ago after rising by 18.1% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by coal mining firms rose 3% in April compared to a year earlier, while average industry wages climbed 6.9% year-over-year in March to $36.62 per hour, down $0.40 from their peak in February, BLS data show. Both mining capacity utilization and mining industrial production dipped in March compared to a year ago, per the Federal Reserve.
- Coal’s share of US electricity generation declined last year, according to the Energy Information Administration (EIA). Coal-fired power plants generated 16.2% of the US’s electricity in 2023, down from 19.7% in 2022 and down by about half from a decade ago, according to the EIA. The decline was largely due to utilities and grid operators relying more on natural gas power plants, which are much cheaper to build and operate than coal plants. The growth of renewable energy also contributed to coal’s retreat, but not nearly as much as the growth of gas. Moreover, as the number of coal plants continues to shrink, plant owners are using the remaining ones less than before. The average capacity factor of coal plants was 42.1% in 2023, down from 48.4% in the prior year, Inside Climate News reported in April, citing EIA data.
- A federal appellate court in February delivered a victory for the mining sector when it vacated a lower court ruling that froze new coal leases on public lands, Politico reports. In an unsigned decision, the 9th US Circuit Court of Appeals vacated a lower court judge’s decision in 2022 that reinstated an Obama-era moratorium on reviewing most new coal leasing applications, according to Politico. The National Mining Association (NMA) applauded the ruling stating the court agreed with the NMA, as well as the states of Wyoming and Montana, that the case should have ended once the challenged Department of Interior Secretarial Order was rescinded in 2021. Rich Nolan, NMA president and CEO, said the lower court’s earlier decision “manufactured a nationwide injunction against federal coal leasing unless and until the Bureau of Land Management completed an unnecessary programmatic environmental impact statement.”
- As of January 19, 2024, the US Mine Safety and Health Administration (MSHA) required mine operators to have written safety programs for surface mobile equipment, excluding belt conveyors, at surface mines and the surface areas of underground mines, Coal Age reports. MSHA’s final rule requires that mine operators develop programs, implement them, and update them when necessary. Moreover, the written safety program must be developed and updated with input from miners and their representatives and include actions mine operators will take to identify hazards and risks to reduce accidents, injuries, and fatalities related to surface mobile equipment. In recent years, powered haulage equipment and machinery have been the leading causes of serious and fatal mine accidents. The mining industry had its deadliest year in a decade in 2023, as 40 miners died in accidents across the US. Compliance with MSHA’s final rule is not required until July 17, 2024.
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