At risk: Nearly 17% of US coal production uneconomic at current market pricing Report

Insight 26 February 2015

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Report summary

Nearly 17% of US coal production is at risk of idling or closure, totalling 162 Mst, as these mine's total cash costs plus sustaining capital expenditures exceed current market pricing. The majority of this production originates in Central Appalachia where approximately 72% of the total output is under water. Other US regions also have substantial amounts of coal at risk, ranging from 48% in Southern Appalachia to a low of 8% in both the Western Bituminous and Powder River Basin.

Executive summary
- More than 160 million short tons of US production at risk
- Nearly three-quarters of at risk production is thermal
  - Operating margin less sustaining capex - CAPP thermal domestic
- A larger percentage of US metallurgical production at risk
- Where are all the mine closures?
- Coal markets not expected to improve in the near term
- Oversupply must be eliminated
  - Methodology

Tables and charts

This report includes 7 images and tables including:

Production of at risk assets by market
Production of at risk assets by region
Operating margin less sustaining capex - thermal domestic

Operating margin less sustaining capex - metallurgical domestic
Operating margin less sustaining capex - metallurgical export
At risk: Nearly 17% of US coal production uneconomic at current market pricing: Image 2
Operating margin less sustaining capex - thermal export