Industry Analysis & Industry Trends
The global recession negatively impacted the Global Coal Mining industry's performance, as both thermal and metallurgical coal prices tanked in light of reduced downstream demand. However, their prices recovered rapidly as demand for electricity generation stabilized, especially in the developing world. The importance of coal in electricity markets is present in both developed and developing worlds; in the future, coal is expected to continue supplying the world with reliable and affordable energy. In the five years to 2021, demand for coal is anticipated to be moderate. Developing nations will continue expanding their infrastructures to supply their populations with reliable and affordable electricity.
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The Global 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. Evidently, levels of capital expenditure by the industry are typically very high. For every $1.00 spent on labor, IBISWorld estimates that companies will spend $1.12 on capital.
Ongoing investment requirements largely depend on coal prices... read more