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Released April 05, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The world's largest private-sector coal company has emerged from Chapter 11 protection after declaring bankruptcy roughly a year ago. But what this means for Peabody Energy Corporation's (NYSE:BTU) (St. Louis, Missouri) capital spending plans has yet to be determined. Industrial Info is tracking 10 active Peabody projects worth $662 million, with the lion's share in Australia.
Industrial Info is tracking $652 million in active Peabody projects in Australia, including the $75.8 million longwalls #14-#16 Addition at the Wambo Underground Coal Mine (South Bates), located at Singleton, New South Wales. Kick-off is currently expected in July this year, with completion in early 2018. It involves relocating Longwall the longwall operations at the existing operations to continue to supply 7.5 million tons per year of run-of-mine coal to the coal handling and preparation plant. For more information, see Industrial Info's project report.
Peabody began trading again Tuesday on the New York Stock Exchange.
"We believe that 'The New BTU' is well positioned to create substantial value for shareholders and other stakeholders over time," said Peabody President and Chief Executive Officer Glenn Kellow in a press statement. "Peabody is the only global pure-play coal investment, and we have the scale, quality of assets and people, and diversity of geography and products to be highly competitive. We also have taken significant steps to create a capital structure to succeed through all cycles. Our financial focus will now be on reducing debt, targeting high-return investments and returning cash to shareholders over time."
The company noted it had reduced debt by more than $5 billion in the past year, reduced costs and built cash and liquidity.
Peabody filed for bankruptcy protection last year amid "unprecedented" factors affecting the global coal industry, the company said at the time, including a "dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges." Peabody, which has mining operations in the U.S. and Australia, was looking at more than $10 billion in liabilities, according to multiple news accounts. For more information, see April 14, 2016, article - Peabody Energy Bankruptcy Filing a Sign of the Times for Coal Industry.
In January, Peabody announced it had has secured $1.5 billion loan commitments from Goldman Sachs Bank USA and JPMorgan Chase Bank N.A., along with affiliates of Credit Suisse AG and Macquirie Group Limited as it progressed on the path to fiscal stability. For more information, see January 13, 2017, article - Peabody Energy Secures Loans in Plan to Exit Bankruptcy.
In a March investor presentation, the company noted some of its vital statistics, including 23 operations in the U.S. and Australia, $4.7 billion in revenues last year, 5.6 billion in tons proven and probable reserves, and 6,700 employees.
Peabody must still deal with challenges, not the least of which is low prices stemming from a host of factors, including competition from low-cost natural gas in the U.S. and weakness in several markets. U.S. coal production in 2016 was the lowest since 1978, according to the Energy Information Administration (EIA) as a result of market conditions ranging from low natural gas prices, warmer-than-normal temperatures during the 2015-2016 winter, and other factors. For more information, see January 10, 2016, article - EIA: U.S. Coal Production in 2016 Drops to Lowest Level in Nearly 40 Years. Environmental regulations on coal-fired power plants have also played a big role in the industry's plight. President Donald Trump has pledged to bring back coal industry jobs in the United States, in part by rolling back Obama-era regulations. For related information, see March 29, 2017, article - Trump Begins Process of Undoing Obama's Climate Change Measures.
Still, industry observers maintain current market conditions make it unlikely coal will see a resurgence in the U.S. energy mix. In its March presentation, Peabody said utility demand for coal is projected to decline five to 15 million tons from 2016 to 2021, with about 50 gigawatts (GW) of plant retirements expected by 2021, largely offset by higher plant operating levels. For related information, see April 3, 2017, article - Coal-Fired Power Takes Another Hit as Owners Decide to Close Navajo Generating Station.
Peabody said coal is expected to continue to supply nearly 30% of U.S. electricity demand by 2021. The Powder River and the Illinois basins will supply nearly 55% of U.S. coal by 2021, it added.
Overseas, demand growth for metallurgical coal will be led by India, which is expected to become the largest importer of seaborne metallurgical coal. As such, Peabody said its Australia mines are well-positioned to meet that demand growth. The company has cited cost reductions and productivity increases in its U.S. and Australian operations.
Peabody's Australian capital investments have dropped by more than 90% from 2012, while its Australian workforce has fallen 35% from its peak that year, according to the company.
The company expects $160 million to $190 million in total capital expenditures for 2017.
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/.
Industrial Info is tracking $652 million in active Peabody projects in Australia, including the $75.8 million longwalls #14-#16 Addition at the Wambo Underground Coal Mine (South Bates), located at Singleton, New South Wales. Kick-off is currently expected in July this year, with completion in early 2018. It involves relocating Longwall the longwall operations at the existing operations to continue to supply 7.5 million tons per year of run-of-mine coal to the coal handling and preparation plant. For more information, see Industrial Info's project report.
Peabody began trading again Tuesday on the New York Stock Exchange.
"We believe that 'The New BTU' is well positioned to create substantial value for shareholders and other stakeholders over time," said Peabody President and Chief Executive Officer Glenn Kellow in a press statement. "Peabody is the only global pure-play coal investment, and we have the scale, quality of assets and people, and diversity of geography and products to be highly competitive. We also have taken significant steps to create a capital structure to succeed through all cycles. Our financial focus will now be on reducing debt, targeting high-return investments and returning cash to shareholders over time."
The company noted it had reduced debt by more than $5 billion in the past year, reduced costs and built cash and liquidity.
Peabody filed for bankruptcy protection last year amid "unprecedented" factors affecting the global coal industry, the company said at the time, including a "dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges." Peabody, which has mining operations in the U.S. and Australia, was looking at more than $10 billion in liabilities, according to multiple news accounts. For more information, see April 14, 2016, article - Peabody Energy Bankruptcy Filing a Sign of the Times for Coal Industry.
In January, Peabody announced it had has secured $1.5 billion loan commitments from Goldman Sachs Bank USA and JPMorgan Chase Bank N.A., along with affiliates of Credit Suisse AG and Macquirie Group Limited as it progressed on the path to fiscal stability. For more information, see January 13, 2017, article - Peabody Energy Secures Loans in Plan to Exit Bankruptcy.
In a March investor presentation, the company noted some of its vital statistics, including 23 operations in the U.S. and Australia, $4.7 billion in revenues last year, 5.6 billion in tons proven and probable reserves, and 6,700 employees.
Peabody must still deal with challenges, not the least of which is low prices stemming from a host of factors, including competition from low-cost natural gas in the U.S. and weakness in several markets. U.S. coal production in 2016 was the lowest since 1978, according to the Energy Information Administration (EIA) as a result of market conditions ranging from low natural gas prices, warmer-than-normal temperatures during the 2015-2016 winter, and other factors. For more information, see January 10, 2016, article - EIA: U.S. Coal Production in 2016 Drops to Lowest Level in Nearly 40 Years. Environmental regulations on coal-fired power plants have also played a big role in the industry's plight. President Donald Trump has pledged to bring back coal industry jobs in the United States, in part by rolling back Obama-era regulations. For related information, see March 29, 2017, article - Trump Begins Process of Undoing Obama's Climate Change Measures.
Still, industry observers maintain current market conditions make it unlikely coal will see a resurgence in the U.S. energy mix. In its March presentation, Peabody said utility demand for coal is projected to decline five to 15 million tons from 2016 to 2021, with about 50 gigawatts (GW) of plant retirements expected by 2021, largely offset by higher plant operating levels. For related information, see April 3, 2017, article - Coal-Fired Power Takes Another Hit as Owners Decide to Close Navajo Generating Station.
Peabody said coal is expected to continue to supply nearly 30% of U.S. electricity demand by 2021. The Powder River and the Illinois basins will supply nearly 55% of U.S. coal by 2021, it added.
Overseas, demand growth for metallurgical coal will be led by India, which is expected to become the largest importer of seaborne metallurgical coal. As such, Peabody said its Australia mines are well-positioned to meet that demand growth. The company has cited cost reductions and productivity increases in its U.S. and Australian operations.
Peabody's Australian capital investments have dropped by more than 90% from 2012, while its Australian workforce has fallen 35% from its peak that year, according to the company.
The company expects $160 million to $190 million in total capital expenditures for 2017.
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/.
