Industry Analysis & Industry Trends
The Coal Mining industry has been volatile over the five years to 2016. The prices of thermal and metallurgical coal surged early in the five-year period, peaking in 2011. Australian coal reentering the global market after flooding in 2011, the emergence of natural gas as a substitute for coal in electricity generation, a slowing Chinese economy and mild winters in the United States that reduced demand for thermal coal all contributed to price volatility. Consequently, coal stockpiles have remained high around the globe. Coal prices are expected to grow slightly in the five years to 2021, as slowing economic growth in major global markets (e.g. China) places downward pressure on product prices... purchase to read more
Industry Report - Industry Investment Chapter
The Coal Mining industry is highly capital intensive, with most of its assets held in the form of land holdings, stocks and equipment. Establishing a new mine or expanding an existing one requires large amounts of capital for mine site development and specialized equipment, including items such as draglines (used to remove overburden at open-cut operations), longwalls (shearers and accompanying hydraulic supports and coal extraction conveyors) and coal washing plants.
Ongoing investment requirements largely depend on coal prices. If coal prices are too low, then an operator might reduce production; it might not be economical to extract coal from the mine at a cost that might surpass the expected market price... purchase to read more