Tuesday, October 13, 2020

Mining companies pivot from thermal coal as utilities seek other energy sources

With cheaper and greener energy sources widely available, American utilities are moving away from using coal to generate electricity. So, many mining companies are pivoting away from thermal coal.

For instance, "activist investors are urging Contura Energy Inc. to accelerate its plan to get out of mining thermal coal for power plants, to focus instead on the more lucrative type that’s used to make steel. And Arch Resources Inc. is seeking to shed its thermal assets to also concentrate on metallurgical coal, after an effort to shift them to a joint venture was blocked last week," Will Wade reports for Bloomberg.

"Thermal coal demand in the U.S. has been sliding steadily for years," Wade notes. "Power plants are expected to burn about 433 million tons this year, less than half of what they needed a decade ago, and down 20% from 2019, according to the U.S. Energy Information Administration. Meanwhile, global steel production, the driver for met coal demand, has been climbing steadily since April."

The Trump administration has gone to great lengths to keep thermal coal viable, as shown by documents that detail the administration's failed efforts to save the Navajo Generating Station in rural Arizona, the largest coal-burning power plant in the Western U.S., Eric Lipton reports for The New York Times.

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