Coal Age

JUN 2019

Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.

Issue link:

Contents of this Issue


Page 3 of 51

May 2016 2 editor's note Reshuffling the Deck A s this edition was going to press, two major announce- ments broke in the U.S. Peabody Energy and Arch Coal announced they were combining their assets in Wyoming's Power River Basin (PRB) and Colorado, and the Environ- mental Protection Agency (EPA) issued the final Affordable Clean Energy (ACE) rule, which will replace former Pres- ident Barack Obama administration's Clean Power Plan (See News, p. 4-5). The Peabody Energy-Arch Coal joint venture ( JV ) would create the leading coal-producing entity in the U.S. with pro forma 2018 production totaling 206.8 million tons. As a point of reference, the top coal producers in 2018 were Peabody Energy (152.8 million tons), Arch Coal (96.6 mil- lion tons), Robert E. Murray (71.3 million tons), Cloud Peak Energy (49.5 million tons) and Alliance Resource Partners (40.3 million tons). The JV would be posi- tioned well above the No. 2 U.S. coal producer, private owner Robert E. Murray, who controls several coal companies including, but not limited to, Murray En- ergy Corp. and Foresight Energy. After the JV is consummated, Peabody Energy would be left with 29.9 million tons and Arch Coal would have 12.7 million tons. While the two St. Louis-based companies said they have discussed JVs in the past, it's the current drop in demand for these Western coals that has brought this about. Approaching the midpoint of 2019, year-to-date total U.S. coal production has declined 19 million tons (6.9%) compared to this time last year. Wyoming represents 10 million tons of that loss or more than half. The mines in the PRB have taken a huge hit and, in the midst of all this, two ongo- ing bankruptcies at Cloud Peak Energy and Westmoreland Coal are affecting other mines in the region. The transaction also included two longwall mines in Colorado, Arch Coal's West Elk mine (4.8 million tons) and Peabody Energy's Twentymile mine (3.8 million tons). Both these mines are capable of producing more high-quality bituminous coal if they could sell it. Peabody Energy will manage the operations and market the coal for the JV. Both companies said they will save on average $120 million per year during the first 10 years of the JV. They will be able to cut costs by optimizing mine plans, better logistics and reducing overhead as well as capital spending. They are do- ing this to compete with cheap natural gas and subsidized renewable energy. Also in this edition, John T. Hanou provides Coal Age readers with an update on the situation in the Illinois Basin (ILB), which includes the mines in Illinois, In- diana and western Kentucky (See Illinois Basin. p. 18). The region has endured its share of market swings. More recently, coal exports have improved ILB demand. That may or may not last depending on what happens with world markets. Hanou makes predictions for the ILB market, which also hinge on natural gas prices. The EPA's efforts to roll back the excessive environmental policies from the previous administration is great news for coal producers and coal-fired pow- er generators that managed to survive the last eight years. Will it be enough to convince U.S. power producers to begin building coal-fired power plants again? Time will tell. In the meantime, U.S. coal operators must do what they can to keep costs low enough to compete. Coal Age, Volume 124, Issue 5, (ISSN 1040-7820) is published monthly ex- cept January and July, by Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, Florida 32224 ( Pe- riodicals postage paid at Jacksonville, FL, and additional mailing offices. Canada Post Publications Mail Agreement No. 41450540. Canada return address: PO Box 2600, Mississauga ON L4T 0A8, Email: subscriptions@ Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available online at SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. Visit to subscribe. Non-qualified persons may subscribe at the following rates: US domestic addresses a 10 issue subscription, $75.00 USD, All addresses outside the USA a 10 issue subscription $125.00 USD. For subscriber services or to order single copies, contact Coal Age, c/o Stamats Data Management, 615 Fifth Street SE, Cedar Rapids IA 52401, 1-800-553- 8878 ext. 5028 or email ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of selected archived articles from Proquest. For microform avail- ability, contact ProQuest at 800-521-0600 or +1.734.761.4700, or search the Serials in Microform listings at POSTMASTER: Send address changes to Coal Age, 11655 Central Parkway, Suite 306, Jacksonville, FL 32224-2659. REPRINTS: Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA; phone: +1.904.721.2925, fax: +1.904.721.2930, PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clear- ance Center (CCC) at +1.978.750.8400. Obtain further information at COPYRIGHT 2019: Coal Age, incorporating Coal and Coal Mining & Processing. ALL RIGHTS RESERVED. Steve Fiscor, Publisher & Editor-in-Chief BY STEVE FISCOR PUBLISHER & EDITOR-IN-CHIEF Mining Media International, Inc. 11655 Central Parkway, Suite 306 Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 Fax: +1.904.721.2930 Editorial Publisher & Editor-in-Chief—Steve Fiscor, Associate Editor—Jennifer Jensen, Technical Writer—Jesse Morton, Contributing Editor—Russ Carter, European Editor—Carly Leonida, Latin American Editor—Oscar Martinez, Graphic Designer—Tad Seabrook, Sales Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, Western U.S., Canada & Australia—Frank Strazzulla, Scandinavia, UK and European Sales—Colm Barry, Germany, Austria & Switzerland Sales—Gerd Strasmann, Japan Sales—Masao Ishiguro, Production Manager—Dan Fitts, Marketing Manager—Misty Valverde,

Articles in this issue

Links on this page

Archives of this issue

view archives of Coal Age - JUN 2019