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Alpha Natural Resources to Seek Chapter 11

The ailing U.S. coal industry is about to get another black mark. Alpha Natural Resources Inc. is expected to file for chapter 11 bankruptcy protection early Monday to cut its more than $3 billion debt load, according to people familiar with the matter, as a severe slump in coal prices continues to wreak havoc on the industry. The Bristol, Va., company, one of the largest U.S. coal producers, hasn’t completed the terms of a restructuring plan but will likely sell some of its best mines or turn them over to creditors and close others during its trip through bankruptcy court, the people said. Alpha has secured as much as $600 million in bankruptcy financing from senior lenders and secured bondholders to fund its operations during its chapter 11 case, some of the people said. A steep drop in coal prices has Alpha and its rivals bleeding cash and choking […]

Posted On : Published By : Tom Whipple
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Coal Left Fighting Over America’s Last Plants as Rules Mount

U.S. power plants are burning the least amount of coal seasonally in more than a decade, and yet supplies continue to climb. For the latest front in the war on coal, look no further than the Coffeen Power Station, about 60 miles south of Springfield, Illinois. Trains roll into Dynegy Inc.’s plant hauling coal mined halfway across the country in Wyoming’s Powder River Basin — even though there’s a mine just a few miles down the road. That galls Illinois state representative John Bradley, who’s pushing for legislation that’ll boost the use of the state’s own supply. “Powder River Basin coal is not as good as coal from Illinois,” Bradley, a Democrat, said by phone. “Illinoisans are sitting on better coal than any other in the country.” America’s coal miners are getting so desperate, beaten down by the lowest prices in eight years, increasing competition and mounting environmental regulations, […]

Posted On : Published By : Tom Whipple
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Three Years Ago This Coal Mine Was Worth $624 Million. Now It Sold for $1

The destructive force of a collapse in world coal prices has been underscored by the sale of a mine valued at A$860 million ($631 million) three years ago for just a dollar. Brazilian miner Vale SA and Japan’s Sumitomo Corp. sold the Isaac Plains coking-coal mine in Australia to Stanmore Coal Ltd., the Brisbane-based company said Thursday in a statement. Sumitomo bought a half stake for A$430 million in 2012. A slump in the price of coking coal, used to make steel, to a decade low is forcing mines to close across the world and bankrupting some producers. Alpha Natural Resources Inc., the biggest U.S. producer, plans to file for bankruptcy protection in Virginia as soon as Monday, said three people with direct knowledge of the matter. It was valued at $7.3 billion in 2008. Isaac Plains in Queensland “was one of the most exciting coal projects in Australia,” […]

Posted On : Published By : Tom Whipple
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Arch Coal’s Future Gets Darker

One of the world’s largest coal companies in terms of reserves, Arch has seen its stock slump some 99.7% in the past five years to 20 cents recently. That should be a more respectable $2 or so after Monday—but only because the number of shares will fall due to a reverse stock split . Big Coal is at once a faint shadow of itself yet still vital economically. Mainly used for power generation and metallurgy, the percentage of U.S. electricity from coal-fired plants recently fell to 30% , just below the share from natural gas, according to SNL Energy. Five years ago, coal had twice the share of gas at 44%. But years of cheap, abundant shale output and tightening environmental standards have led many utilities to shut coal plants. That shift hasn’t been enough to absorb the glut of North American gas, something that would be a relief […]

Posted On : Published By : Tom Whipple
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US coal carload volumes rise to highest total in 11 weeks: AAR

Coal carload volumes originated on US railroads reached to an 11-week high, according to data released Wednesday by the Association of American Railroads. For the week ending July 18, the AAR reported 99,975 coal carloads, up 4.9% from 95,318 carloads the previous week. It was the second straight week of coal shipment gains since a year-low 82,924 carloads were reported for the week ending July 4. It was the highest volume of coal carloads since 101,495 carloads for the week ending May 2. Despite the increase, the latest total marked the 15th week this year coal volumes were below 100,000 carloads. It is the most times in a year weekly volumes have remained that low since the AAR began such record keeping in 1988, more than doubling the previous high of seven weeks in 1989. Article continues below… Platts Coal Trader provides the latest prices for key benchmark coals, […]

Posted On : Published By : Tom Whipple
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Coal Miners Pressed on Cleanup Costs

State and federal regulators are pressing U.S. coal companies to prove that they can pay for the cost of cleaning up after they are finished mining, putting new financial pressure on an industry already facing historic strains. Regulators even in energy-friendly states such as Wyoming and West Virginia are stepping up oversight on coal companies amid concerns that taxpayers could be left on the hook for expensive and environmentally complicated cleanups if the companies go bankrupt. That has created a political challenge for governors of coal states, who don’t want to be viewed as pushing vital industries into further financial trouble. “It is tough times in the coal fields right now,” said Harold Ward, acting director of the mining and reclamation division at the West Virginia Department of Environmental Protection. “You hope for them to be successful, but you anticipate the worst.” Coal producers have been rocked by competition […]

Posted On : Published By : Tom Whipple
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Gas overtakes coal at US power stations

The US generated more of its electricity from gas than from coal for the first time ever in April — in a sign of how the shale boom is putting mounting pressure on the country’s mining industry. Plunging prices for natural gas, which have fallen alongside oil since last summer, led to it being used to generate 31 per cent of America’s electricity in April, while coal contributed 30 per cent. This was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, according to SNL Energy, a research firm — although it came close in 2012 when gas prices were also very weak. In 2010, coal provided 45 per cent of US power. Since then, competition from cheap shale gas — unlocked by the rise of horizontal drilling and hydraulic fracturing — plus a growing regulatory burden on coal-fired power plants, has squeezed out coal […]

Posted On : Published By : Tom Whipple
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Gas overtakes coal at US power stations

The US generated more of its electricity from gas than from coal for the first time ever in April — in a sign of how the shale boom is putting mounting pressure on the country’s mining industry. Plunging prices for natural gas, which have fallen alongside oil since last summer, led to it being used to generate 31 per cent of America’s electricity in April, while coal contributed 30 per cent. This was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, according to SNL Energy, a research firm — although it came close in 2012 when gas prices were also very weak. In 2010, coal provided 45 per cent of US power. Since then, competition from cheap shale gas — unlocked by the rise of horizontal drilling and hydraulic fracturing — plus a growing regulatory burden on coal-fired power plants, has squeezed out coal […]

Posted On : Published By : Tom Whipple
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Weekly US coal production estimates dip below 16 million st: EIA

Weekly US coal production totaled an estimated 15.5 million st in the week that ended Saturday, down 4.7% from the prior week and down 17.8% from the comparable week a year ago, US Energy Information Administration data showed Thursday. While EIA does not comment on its production estimates, the weekly production estimate came in below 16 million st for the fourth time in the last five weeks, as coal output continues to fall because of low natural gas prices. Coal production during the week that ended June 27 in Wyoming and Montana, mostly made up of output from the Powder River Basin, totaled an estimated 6.7 million st during the week, down 17% compared with last year, according to the EIA. Year-to-date coal production in Wyoming and Montana is estimated to total 195.3 million st, down 8% compared with the same period last year. Article continues below… Platts Coal […]

Posted On : Published By : Tom Whipple
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Michigan, Iowa utilities to go forward with coal retirements, conversions to gas

Despite the US Supreme Court’s ruling Monday against the Environmental Protection Agency’s Mercury and Air Toxics Standards rule, electric power utilities in Michigan and Iowa say they are moving forward with plans to close coal-fired power plants or convert existing coal burners to natural gas over the next several years. The Supreme Court Monday ruled the EPA erred by refusing to consider cost when deciding to regulate emissions of mercury from the power sector. The Michigan South Central Power Agency’s decision late last week to retire its 55-MW Endicott coal plant at Litchfield in June 2016, has nothing to with MATS, general manager Glen White said in a Monday interview. Endicott, which went into commercial operation in 1983, is equipped with a scrubber and already complied with MATS, which took effect in mid-April, White said. Article continues below… Platts Coal Trader provides the latest prices for key benchmark coals, […]

Posted On : Published By : Tom Whipple