The coal mining industry closed out 2015 with more than 65% of its global production and 72% of its Central Appalachian operations running at a loss, according to a year-end assessment by industry analysts Wood Mackenzie.
On the other hand, “there’s the risk that a shift away from coal could even be damaging for the climate,” resilience.org reports. “While coal mining companies are under pressure, Wood Mackenzie sees an upside for another fossil fuel, one that many scientists say is even worse for the climate than coal: natural gas.”
But the coal industry is in for tough times. Thermal coal faces tougher power plant regulations at a time when utilities are already stockpiling larger-than-average supplies. And coking coal, used in steelmaking, is confronted with a weak market in China, which accounts for about half of the world’s steel production.
It doesn’t help that Chinese steel production is about to see the most dramatic decline to the lowest in 20 years,” Oslo-based analyst Herman Hildan told Bloomberg. “Demand growth is collapsing.”
Small wonder, then, that “a wave of bankruptcies has swept the coal mining industry, with Patriot Coal, Alpha Resources, and Walter Energy all filing for restructuring in 2015,” as Kelly notes. “Though it’s worth keeping in mind that simply because a company goes bankrupt, that does not automatically mean that its mines wind up shuttered, but rather that changes in management are under way.”
