Metallurgical Coal Mining Projects Begin to Emerge with Improving Export Market

Researched by Industrial Info Resources (Sugar Land, Texas)--The price of coal is up, similar to other commodities such as gold, zinc and molybdenum, all of which have seen price increases in 2016. Both metallurgical coal, which is mainly used in steelmaking, and thermal coal, which is mainly used by coal-fired power plants, has doubled in price this year on international trading.

This has especially benefited coal miners in countries like Australia, which have strong export ties to Asia. Coal imports are up in China since earlier in the year, when the Chinese government announced coal mine production cutbacks.

North American coal miners are benefiting as well, thanks to strong demand, especially on the metallurgical coal front. This is a welcome respite from the pummeling that the coal industry has taken in recent years, with companies like Peabody Energy Corporation (St. Louis, Missouri) and Alpha Natural Resources (Bristol, Virginia) taking bankruptcy protection.

Some companies are emerging from bankruptcies and have been acquiring cheap assets during the downturn. Now, as the market shows signs of life, mining project development is beginning to seed. For example, Corsa Coal Corporation (TSX:CSO) (Canonsburg, Pennsylvania) acquired PBS Coals in 2014 and has a number of small mining projects to increase metallurgical coal production up to 2 million tons per year, with infrastructure to increase capacity up to 4 million tons per year. Corsa Coal has mining projects in Tennessee and Pennsylvania in the hardest-hit Appalachian coal areas.

Ramaco LLC (Sheridan, Wyoming), coming off a 1.3 billion-ton coal reserve acquisition binge, is planning to invest in mines in Virginia, West Virginia and Wyoming, and is rumored to be planning an initial public offering (IPO) in the near term.

Teck Resources Limited (NYSE:TCK) (Vancouver, British Columbia) reported record metallurgical coal output and near-record sales in the third quarter, attributing the increases to the global implementation of production cuts since 2014; reduced output from China due to the 276-working-day policy; weather interruptions and production disruptions at key Australian mines, leading to force majeure declarations; and increased seaborne demand from China and the rest of the world.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.