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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The outlook for U.S. coal mining, both thermal and metallurgical (met), has brightened in recent months, coal company officials and those who provide professional services to the industry, told a mining conference last week in Denver, Colorado. That optimism had several drivers, including the election of Donald Trump as president last November; rising demand in Asia for both thermal and met coal; investors' increased willingness to fund coal projects; and the strong growth in electric demand coming from data centers, artificial intelligence (AI) and cryptocurrency mining.
But the road to a brighter future for the U.S. coal industry is anything but straight and certain. In fact, hearing speakers at the annual MINEXCHANGE conference, sponsored by the Society for Mining, Metallurgy & Exploration (SME) (Englewood, Colorado), one was reminded of the opening lyrics from a Hollies song from 1969: "The road is long, with many a winding turn."
In addressing the SME event February 24, several speakers used data from energy organizations, such as the U.S. Energy Information Administration (EIA) (Washington, D.C.) and the International Energy Agency (IEA) (Paris, France), to trace recent growth in global coal use, as well as long-term projections about the future of the black rock. These speakers tended to emphasize that demand for thermal and met coal in Asia, South Asia and Southeast Asia was rising rapidly as those economies industrialize and grow economically.
The export of thermal and met coal currently accounts for nearly 30% of overall U.S. coal production, according to data from the EIA. In 2023, the agency said, U.S. thermal coal exports totaled about 48.5 million short tons, and that is expected to rise to about 55 million short tons this year. India, Morocco, Egypt and China were the four largest importers of U.S. thermal coal in 2024. Met coal exports this year are expected to reach about 95 million short tons, the energy agency said.
Combined U.S. production of met and thermal coal is about 525 million short tons per year. Many observers expect domestic use of coal to decline in the future, which is why mining companies are working to expand coal exports.
SME speakers emphasized that rising overseas demand for coal could offset shrinking domestic demand, creating new opportunities for U.S. coal mining companies. Export terminals on the East Coast already are shipping coal, but the West Coast remains largely bottled up, as about six proposed coal export terminal projects have been cancelled or deferred during the prior decade.
Coal interests have sought to build export terminals on the West Coast for years, but they have been stymied by adverse decisions from state and federal agencies. For more on that, see October 30, 2017, article - Conference: CCS, Exports Key for Revival of Western Coal, and July 26, 2017, article - Will Exports Drive a Revival of the U.S. Coal Industry?
But with Donald Trump, a strong supporter of fossil fuels, back in the White House, coal producers are optimistic about the potential to export coal from the West Coast. Some hope that an unsuccessful initiative from the first Trump administration could be resurrected and fulfilled: turning closed military bases or other federal facilities on the West Coast into coal export terminals, which could allow Western coal mining companies to access Asian coal demand.
In 2018, during Trump's first term, it was Interior Secretary Ryan Zinke, not President Trump, who publicly floated this idea, which was never implemented.
"I respect the state of Washington and Oregon and California," Zinke said in a 2018 interview with The Associated Press. "But also, it's in our interest for national security and our allies to make sure that they have access to affordable energy commodities."
Accomplishing that, Zinke said, may require the use of "some of our naval facilities, some of our federal facilities on the West Coast." He only identified one prospect, a mostly abandoned Alaska military base, and that was for exports of liquefied natural gas (LNG).
Trump's second-term "energy dominance" agenda could breathe new life into that idea. The president enthused about coal in a virtual speech delivered to the World Economic Forum in Davos, Switzerland, earlier this year. "Nothing can destroy coal," Trump said. "Not the weather, not a bomb--nothing. And we have more coal than anybody."
Aside from the potential to increase exports, SME speakers gave other reasons for feeling more optimistic about coal's prospects, including burgeoning electric demand growth tied to data centers, AI and cryptocurrency mines. Those facilities require a highly reliable electric supply, and a growing number of utilities across the U.S. have responded by postponing the planned retirement dates for coal-fired generators. For more on that, see February 6, 2025, article - Rising Electric Demand Growth Delays Retirement Dates for Coal-Fired Generation and February 11, 2025, article - A Brighter Outlook for U.S. Thermal Coal Use is Taking Shape.
In an SME lunchtime address February 25, Martin Purvis, the chief executive officer of Westmoreland Mining LLC (Lone Tree, Colorado), noted that the company had increased sales projections from several of its coal mines, and that some of their lifetimes have been extended due to high demand.
"A global fight for dominance and control over critical AI technology, a portal to the future, is underway," Purvis continued. "Fierce nation-against-nation competition will consume all the energy the planet can feasibly deliver, and then some."
At an SME break-out panel discussion February 24, Cynthis Urda Kassis, co-lead of the mining sector and global co-head of energy, natural resources and infrastructure at global law firm A&O Shearman (London, England and New York, New York), said "private equity (PE), as one type of private capital, is getting more active in funding coal projects." She provided several examples, including that Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri) obtained a $2.075 billion bridge loan from a group of banks and private capital to acquire the met coal business of Anglo American plc (London, England).
She added that PE firms have provided a lot of U.S. thermal coal financings, typically in the form of debt. But thermal coal projects are still harder to finance than met coal projects.
One of Trump's executive orders issued January 20 instructed his administration to dismantle environmental and energy initiatives from the Biden administration that contributed to a throttling of coal use by electric generators. In his order, the president ignored the role that inexpensive and plentiful natural gas, as well as renewables, were playing in coal's loss of electric market share. If the Trump administration is successful in reversing already-finalized environmental regulations, it likely will take several years, as those efforts are expected to be met with lawsuits from environmental and public health organizations.
Another SME speaker, Ray McCormick, an investment banker and managing director with Capstone Partners (Denver, Colorado), told attendees that Duke Energy Corporation (NYSE:DUK) (North Carolina) said it would consider building new coal-fired plants if the president terminated environmental rules limiting power plant emissions.
However, when Industrial Info contacted a Duke Energy spokesperson, he denied Duke has plans to build new coal-fired generation. The spokesperson said a news report from late 2024 on that issue was based on a reporter's misunderstanding of comments from a Duke executive.
In his break-out session talk at the SME event, McCormick cited a prediction from EIA that U.S. coal production was expected to fall to a level that equaled consumption and exports this year, which could send economic signals to mining companies to expand or extend mines. He said, "2025 could be a very good year for U.S. coal."
"After years of consolidation and mass bankruptcies, the coal industry is entering a new era: companies can be profitable in a shrinking market," he said February 24. "The worst is behind the coal industry."
Possibly. But there are several bumps on the road to a brighter future for King Coal, even beyond whether the Trump administration can roll back Biden administration rules affecting coal or turn shuttered miliary bases or federal facilities on the West Coast into coal export terminals. The main bump is China, which is locked in a tariff war with the Trump administration. Tariffs on U.S. coal exports to China likely would erode the economic viability of those exports.
China specifically is targeting exports of U.S. energy, including coal. Trump announced a 10% tariff on all Chinese imports last month, and China responded with targeted tariffs on U.S. energy imports. Last week, the U.S. president said he would increase the tariffs on Chinese goods, and some observers expect China to similarly increase their levies on U.S. energy imports.
Whether all of this is a negotiating ploy by either or both parties is unknown, but Trump has demonstrated a proclivity for using threats to extract concessions from allies and foes. China is the fourth-largest importer of U.S. coal, trailing India, Morocco and Egypt.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
But the road to a brighter future for the U.S. coal industry is anything but straight and certain. In fact, hearing speakers at the annual MINEXCHANGE conference, sponsored by the Society for Mining, Metallurgy & Exploration (SME) (Englewood, Colorado), one was reminded of the opening lyrics from a Hollies song from 1969: "The road is long, with many a winding turn."
In addressing the SME event February 24, several speakers used data from energy organizations, such as the U.S. Energy Information Administration (EIA) (Washington, D.C.) and the International Energy Agency (IEA) (Paris, France), to trace recent growth in global coal use, as well as long-term projections about the future of the black rock. These speakers tended to emphasize that demand for thermal and met coal in Asia, South Asia and Southeast Asia was rising rapidly as those economies industrialize and grow economically.
The export of thermal and met coal currently accounts for nearly 30% of overall U.S. coal production, according to data from the EIA. In 2023, the agency said, U.S. thermal coal exports totaled about 48.5 million short tons, and that is expected to rise to about 55 million short tons this year. India, Morocco, Egypt and China were the four largest importers of U.S. thermal coal in 2024. Met coal exports this year are expected to reach about 95 million short tons, the energy agency said.
Combined U.S. production of met and thermal coal is about 525 million short tons per year. Many observers expect domestic use of coal to decline in the future, which is why mining companies are working to expand coal exports.
SME speakers emphasized that rising overseas demand for coal could offset shrinking domestic demand, creating new opportunities for U.S. coal mining companies. Export terminals on the East Coast already are shipping coal, but the West Coast remains largely bottled up, as about six proposed coal export terminal projects have been cancelled or deferred during the prior decade.
Coal interests have sought to build export terminals on the West Coast for years, but they have been stymied by adverse decisions from state and federal agencies. For more on that, see October 30, 2017, article - Conference: CCS, Exports Key for Revival of Western Coal, and July 26, 2017, article - Will Exports Drive a Revival of the U.S. Coal Industry?
But with Donald Trump, a strong supporter of fossil fuels, back in the White House, coal producers are optimistic about the potential to export coal from the West Coast. Some hope that an unsuccessful initiative from the first Trump administration could be resurrected and fulfilled: turning closed military bases or other federal facilities on the West Coast into coal export terminals, which could allow Western coal mining companies to access Asian coal demand.
In 2018, during Trump's first term, it was Interior Secretary Ryan Zinke, not President Trump, who publicly floated this idea, which was never implemented.
"I respect the state of Washington and Oregon and California," Zinke said in a 2018 interview with The Associated Press. "But also, it's in our interest for national security and our allies to make sure that they have access to affordable energy commodities."
Accomplishing that, Zinke said, may require the use of "some of our naval facilities, some of our federal facilities on the West Coast." He only identified one prospect, a mostly abandoned Alaska military base, and that was for exports of liquefied natural gas (LNG).
Trump's second-term "energy dominance" agenda could breathe new life into that idea. The president enthused about coal in a virtual speech delivered to the World Economic Forum in Davos, Switzerland, earlier this year. "Nothing can destroy coal," Trump said. "Not the weather, not a bomb--nothing. And we have more coal than anybody."
Aside from the potential to increase exports, SME speakers gave other reasons for feeling more optimistic about coal's prospects, including burgeoning electric demand growth tied to data centers, AI and cryptocurrency mines. Those facilities require a highly reliable electric supply, and a growing number of utilities across the U.S. have responded by postponing the planned retirement dates for coal-fired generators. For more on that, see February 6, 2025, article - Rising Electric Demand Growth Delays Retirement Dates for Coal-Fired Generation and February 11, 2025, article - A Brighter Outlook for U.S. Thermal Coal Use is Taking Shape.
In an SME lunchtime address February 25, Martin Purvis, the chief executive officer of Westmoreland Mining LLC (Lone Tree, Colorado), noted that the company had increased sales projections from several of its coal mines, and that some of their lifetimes have been extended due to high demand.
"A global fight for dominance and control over critical AI technology, a portal to the future, is underway," Purvis continued. "Fierce nation-against-nation competition will consume all the energy the planet can feasibly deliver, and then some."
At an SME break-out panel discussion February 24, Cynthis Urda Kassis, co-lead of the mining sector and global co-head of energy, natural resources and infrastructure at global law firm A&O Shearman (London, England and New York, New York), said "private equity (PE), as one type of private capital, is getting more active in funding coal projects." She provided several examples, including that Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri) obtained a $2.075 billion bridge loan from a group of banks and private capital to acquire the met coal business of Anglo American plc (London, England).
She added that PE firms have provided a lot of U.S. thermal coal financings, typically in the form of debt. But thermal coal projects are still harder to finance than met coal projects.
One of Trump's executive orders issued January 20 instructed his administration to dismantle environmental and energy initiatives from the Biden administration that contributed to a throttling of coal use by electric generators. In his order, the president ignored the role that inexpensive and plentiful natural gas, as well as renewables, were playing in coal's loss of electric market share. If the Trump administration is successful in reversing already-finalized environmental regulations, it likely will take several years, as those efforts are expected to be met with lawsuits from environmental and public health organizations.
Another SME speaker, Ray McCormick, an investment banker and managing director with Capstone Partners (Denver, Colorado), told attendees that Duke Energy Corporation (NYSE:DUK) (North Carolina) said it would consider building new coal-fired plants if the president terminated environmental rules limiting power plant emissions.
However, when Industrial Info contacted a Duke Energy spokesperson, he denied Duke has plans to build new coal-fired generation. The spokesperson said a news report from late 2024 on that issue was based on a reporter's misunderstanding of comments from a Duke executive.
In his break-out session talk at the SME event, McCormick cited a prediction from EIA that U.S. coal production was expected to fall to a level that equaled consumption and exports this year, which could send economic signals to mining companies to expand or extend mines. He said, "2025 could be a very good year for U.S. coal."
"After years of consolidation and mass bankruptcies, the coal industry is entering a new era: companies can be profitable in a shrinking market," he said February 24. "The worst is behind the coal industry."
Possibly. But there are several bumps on the road to a brighter future for King Coal, even beyond whether the Trump administration can roll back Biden administration rules affecting coal or turn shuttered miliary bases or federal facilities on the West Coast into coal export terminals. The main bump is China, which is locked in a tariff war with the Trump administration. Tariffs on U.S. coal exports to China likely would erode the economic viability of those exports.
China specifically is targeting exports of U.S. energy, including coal. Trump announced a 10% tariff on all Chinese imports last month, and China responded with targeted tariffs on U.S. energy imports. Last week, the U.S. president said he would increase the tariffs on Chinese goods, and some observers expect China to similarly increase their levies on U.S. energy imports.
Whether all of this is a negotiating ploy by either or both parties is unknown, but Trump has demonstrated a proclivity for using threats to extract concessions from allies and foes. China is the fourth-largest importer of U.S. coal, trailing India, Morocco and Egypt.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
