Industry Analysis & Industry Trends
The global recession negatively impacted the 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. In the next five years, demand for coal is anticipated to be moderate. Environmental concerns and weak coal prices could negatively impact the industry, but demand for electricity in less developed regions will surpass this negative impact... read more
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 $1.54 on capital.
On-going investment requirements largely depend on coal prices... read more