Last mine standing: how much overcapacity is there in the Powder River Basin? Report

Insight 26 August 2019

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

What's inside this report?

The shift to cleaner power has led to a sharp decline in coal consumption for power generation.

As coal demand declines, how will this affect one of the main areas of coal supply in the US: the Powder River Basin?

Read our report for:

Our outlook for Powder River Basin prices, mining capacity, and its competitive landscape
Bankruptcy analyses for the basin
Regional supply-demand fundamentals, and an assessment of who stands to lose the most from the basin’s long-term structural decline
Location maps and production estimates for 2019

Report summary

A decade ago, the Powder River Basin produced over 496 Mstpa. Production at the end of 2019 will be 288 Mst. Production will continue to fall over the next few years as natural gas prices decline, renewable generation increases and coal-fired electric generating units (EGUs) retire. The 17 mines that existed a decade ago continue to operate (with some recent exceptions), although the number of miners working and the amount of operational equipment being used has been trimmed. Our recent long-term outlook, North America coal long-term outlook H1 2019: competition drives decline, shows Powder River Basin (PRB) demand will continue to decline in the next five years. This is especially troublesome for the future production profile of low-heat PRB coal (less than 8,600 btu/lb) when compared to higher-heat PRB (greater than 8,600 btu/lb).