August 7, 2020 Read More →

Massive writedown of Powder River Basin mine ‘speaks volumes’ about coal business

NS Energy:

Peabody Energy’s coal mine write-down “speaks volumes about the state of the industry,” says an energy analyst.

The Missouri-headquartered firm, which is the US’s largest private sector coal company, slashed the book value of the world’s biggest coal mine — the North Antelope Rochelle mine in Wyoming’s Powder River Basin (PRB) — by $1.42bn, or 22% of Peabody’s total asset value this week.

Peabody said the downgrade was driven by “lower long-term natural gas prices, timing of coal plant retirements and continued growth from renewable generation,” with the company projecting coal’s share of the US generation mix to continue to tumble over the coming years.

Seth Feaster, a data analyst at the US-based Institute for Energy Economics and Financial Analysis (IEEFA) believes the miner’s asset write-down “speaks volumes about the state of the industry” and is a “reflection of the new reality in US coal mining.”

“The industry continues to be battered by rapid structural decline driven by low gas prices, the low and falling cost of building wind and solar power generation and sweeping initiatives by utilities and corporations to cut emissions,” he added.

[James Murray]

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