April 18, 2016 Read More →

Peabody, Before Bankruptcy, Began a ‘Downsizing’ in Step With a Vastly Smaller U.S. Coal Industry

Taylor Kuykendall for SNL:

Peabody Energy Corp. appears to be stepping up to take a major step in the downsizing of the U.S. coal industry, a trim many believe is necessary to stabilize prices in the oversupplied market.

An analysis of early U.S. Mine Safety and Health Administration data shows drastic production cuts across the company’s coal portfolio. The struggle to “rightsize” supply has been a frequent topic of discussion within the industry, particularly as a reluctance to shut down production has created so-called zombie mines that produce with little profit or even a loss.

Ted O’Brien, CEO of Doyle Consultants, said at a recent coal industry conference: “At the end of the day, the industry needs some sort of radical change. The market will not bail out the coal industry this time.”

Peabody’s total operations reporting so far were down 30.1% year over year.

Full article ($): Ahead of bankruptcy, Peabody cut production at nation’s largest coal mine by a third

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