Industry Analysis & Industry Trends
The Coal Mining industry has lost steam over the past five years. This is because the emergence of natural gas-generated electricity has increased competition for the industry. Emerging market demand for metallurgical coal has created need for this export, as developing countries are extensively building infrastructure and demanding steel-making coals at increasing rates. Additionally, coal stockpiles have remained high around the globe, depressing prices and causing industry revenue to contract. In the five years to 2019, slower growth in emerging economies will hurt demand for US metallurgical coal and cause prices to stagnate. Furthermore, natural gas will continue to erode coal demand, as the appetite for alternative sources of electricity expands globally... 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