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: https://coal.epubxp.com/i/668539
T he opening spread for News this month has three items that Coal Age readers probably never thought they would ever see. First, former Massey Energy CEO Don Blankenship has been sentenced to prison. As this edition was going to press, Peabody Energy, one of the world's largest coal pro- ducers, filed for bankruptcy. Also, total coal production in the U.S. continues to plummet. Many thought Blankenship would never serve time. If he loses on appeal, this case could have some huge implications for executives that manage industrial companies. He has asked the court to remain free during the appeals process. While he might serve his time before the appeals process is completed, which would be unfair if he overturned the court's ruling, the judge in this case has shown little sympathy for Blankenship. Similarly, labor groups and widows have voiced with great emotion that they believe the sentence is too lenient. As of press time, the court had not answered Blankenship's requests. Peabody President and CEO Glenn Kellow used the term "historically chal- lenged" to describe the company's current position. The amount of wealth destruction that has taken place is truly incredible. In 2011, Peabody Energy's market capitalization was valued at $20 billion; today, the value of the company's market capitalization is $38 million, according to The Wall Street Journal. Peabody Energy has posted losses for nine consecutive quarters, and in 2015, it posted a $2 billion loss for the year. Readers might recall that the company paid more than $5 billion in 2011 for Macarthur Coal in Australia, but this is more about the U.S. mining operations. Peabody Energy's U.S. mines are profitable, but they are unable to service the debt the company has accumulated. And, the company secured $800 million in "emergency financing" to keep operations running. Meanwhile, overall U.S. coal production for the first quarter of this year has dropped more than 31% year-on-year to less than 170 million tons. If this trend continues, annual coal production in the U.S. will drop to 680 million tons — a fig- ure this industry has not seen since the late 1970s or early 1980s. The market shift is now beginning to impact the large mines in Wyoming's Powder River Basin (PRB). Both Peabody Energy and Arch Coal announced large layoffs in the PRB for the first time this month. About 31,000 miners have lost their jobs since 2009, according to statistics from the Mine Safety and Health Administration. Local media is reporting that miners are leaving southern West Virginia and Virginia in droves seeking work elsewhere. What will the coal industry of the future look like? It will certainly be much smaller. As these companies work their way through these reorganizations, the assets (or the mines) could end up in the hands of the creditors, which would like- ly sell them to private owners to recoup their money. Natural gas prices are low and they look to remain low for the foreseeable future. Coal prices have dropped to levels not seen since the early 1990s, but costs have escalated substantially in that 25 years. This will be a seminal year for the U.S. coal industry. Coal Age, Volume 121, Issue 4, (ISSN 1040-7820) is published monthly by Mining Media Inc., 10 Sedgwick Drive, Englewood, Colorado 80113 (mining-media.com). Periodicals postage paid at Englewood, CO, and additional mailing offices. Canada Post Publications Mail Agreement No. 40845540. Canada return address: Station A, PO Box 54, Windsor ON N9A 6J5, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available online at www.coalage.com. SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: USA and Canada, 1 year, $56.00, 2 year, $96.00, 3 year, $162.00, Student, $16.00, Outside the USA and Canada, 1 year, $77.00, 2 year, $137.00, 3 year, $225.00 surface mail (1 year, $145.00, 2 year, $257.00 airmail delivery). For subscriber services or to order single copies, write to Coal Age, 8751 East Hampden, Suite B1, Denver, CO 80231 USA; call +1.303.283.0640 (USA) or visit www.mining-media.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of select- ed archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For microform availability, contact ProQuest at 800-521- 0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to Coal Age, P.O. Box 1337, Skokie, IL 60076 USA. REPRINTS: Mining Media Inc, 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1.978.750.8400. Obtain further information at www.copyright.com. COPYRIGHT 2016: Coal Age, incorporating Coal and Coal Mining & Processing. ALL RIGHTS RESERVED. www.mining-media.com Mining Media International Editorial Office 1 1655 Central Parkway, Suite 306 J acksonville, Florida 32224 U.S.A. P hone: +1.904.721.2925 F ax: +1.904.721.2930 Mining Media International Corporate Office 8 751 East Hampden, Suite B1 D enver, Colorado 80231 U.S.A. P hone: +1.303.283.0640 F ax: +1.303.283.0641 P resident/Publisher—Peter Johnson, pjohnson@mining-media.com Vice President of Sales & Marketing—John Bold, jbold@mining-media.com Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S. & Canada, Sales—Mary Lu Buse, mlbuse@mining-media.com Scandinavia, UK and European Sales—Colm Barry, colm.barry@telia.com G ermany, Austria & Switzerland Sales—Gerd Strasmann, info@strasmann-media.de Australia/Asia Sales—Lanita Idrus, lanita@mining-media.com Japan Sales—Masao Ishiguro, ishiguro@irm.jp Indonesia Sales—Dimas Abdillah, dabdillah@mining-media.com Latin America Sales—Paulina Downey, paulina@downeyassociates.cl / Sylvia Palma, sylvia@downeyassociates.cl Classified Advertising—Kirk Carbo, kcarbo@mining-media.com Show Manager—Tim Fearney, tim@semcoproductions.com Production Manager—Dan Fitts, dfitts@mining-media.com BY STEVE FISCOR / EDITOR-IN-CHIEF Historically Challenged e d i t o r ' s n o t e 2 www.coalage.com Steve Fiscor, Coal Age Editor-in-Chief sfiscor@mining-media.com E d i t o r - i n - C h i e f — S t e v e F i s c o r , s f i s c o r @ m i n i n g - m e d i a . c o m W e s t e r n F i e l d E d i t o r — R u s s C a r t e r , r c a r t e r @ m i n i n g - m e d i a . c o m F i e l d E d i t o r — D o n n a S c h m i d t , d s c h m i d t @ m i n i n g - m e d i a . c o m E u r o p e a n E d i t o r — S i m o n W a l k e r , s i m o n . i e t s @ b t i n t e r n e t . c o m L a t i n A m e r i c a n E d i t o r — O s c a r M a r t i n e z , o m a r t i n e z @ m i n i n g - m e d i a . c o m A s s i s t a n t E d i t o r — J e n n i f e r J e n s e n , j j e n s e n @ m i n i n g - m e d i a . c o m G r a p h i c D e s i g n e r — A u s t i n S t . C l a i r , a s t c l a i r @ m i n i n g - m e d i a . c o m