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Market value of top 12 US coal producers down $2.11B since Q3'18

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Market value of top 12 US coal producers down $2.11B since Q3'18

The 12 largest publicly traded U.S. coal producers lost 16.6% of their total market value since September 2018, with just one seeing an increase during the period.

The companies' total market capitalization was $12.68 billion on Sept. 27, 2018, and $10.58 billion as of Jan. 8, 2019, according to data compiled by S&P Global Market Intelligence. Natural Resource Partners LP, the only gainer, grew 31.1% during the period, from $364.3 million to $477.6 million.

The companies' value ranking remained consistent from a few months ago, with Peabody Energy Corp., Alliance Resource Partners LP and Arch Coal Inc. taking the top three top spots. Market capitalization in the sector is still down significantly from 2011, when Peabody led the publicly traded producers with $19.68 billion in value.

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Westmoreland Coal Co., which filed for Chapter 11 bankruptcy protection in October 2018, experienced the largest decline in market value, falling 88% to $300,000. The company is seeking to sell some of its noncore assets and plans to have its lenders act as a stalking horse bidder and take the core assets in exchange for the company's debt if there are no better offers.

Cloud Peak Energy Inc.'s value dropped by $151.3 million over the period to $29.1 million, an 83.9% decrease. The pure-play Powder River Basin producer announced in November 2018 that it had engaged a financial adviser and legal counsel to review alternatives such as selling the company. Cloud Peak, one of the largest publicly traded companies to avoid bankruptcy in recent years, was removed from the S&P SmallCap 600 on Jan. 3 and warned by the NYSE on Dec. 26, 2018, that its stock was below the minimum threshold to continue listing on the exchange.

Peabody was valued about $1.07 billion higher than Alliance as of Jan. 8 but saw a much larger drop, falling 24.2% compared to a 6.4% decline for Alliance. Peabody's third-quarter 2018 earnings and stock prices took a hit after a fire in its North Goonyella coking coal mine in Australia.

Ramaco Resources Inc.'s capitalization fell 30.7% to $209.6 million. The company declared force majeure on shipments from its Elk Creek mine in West Virginia after a silo failure on Nov. 5, 2018, that caused the complex's processing plant to shut down. Ramaco completed a temporary conveying system in early December that allowed Elk Creek to resume processing coal at reduced capacity and said at the time that it expected to return to full capacity late in the first quarter of 2019.

The other top coal producers that saw their market capitalizations decline since September 2018 were Rhino Resource Partners LP, down 45.3%; Arch Coal at 9.2%; Foresight Energy LP, whose value dropped 11.4%; Hallador Energy Co., falling 13.2%; and Contura Energy Inc., which merged with Alpha Natural Resources Inc. in November, posting an 18.9% decrease to $634.2 million.