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Mission Coal files for bankruptcy; doubt cast on military base exports proposal

Mission Coal Co. LLC filed for Chapter 11 bankruptcy protection this week, the second coal company to do so in October, and aims to sell some of the metallurgical coal assets that it previously purchased from other struggling coal companies.

The Tennessee-headquartered coal company reported between $1 million and $10 million in estimated assets and estimated liabilities between $100 million and $500 million in a petition filed with the U.S. Bankruptcy Court for the Northern District of Alabama on Oct. 14. It is considering selling all or most all of its assets as part of its bankruptcy reorganization.

The Trump administration's latest idea to help the sector is a proposal to use federal land along the West Coast to export coal and liquefied natural gas, creating a shorter route for western coal producers to sell to Asian markets. But the proposal, should it overcome bureaucratic, economic and national security hurdles, would still face environmental opposition in Western states, numerous experts said.

Coal producers have begun reporting third-quarter production data, indicating that Blackjewel LLC upped output from its two Powder River Basin mines by about 28.4% compared with the second quarter and Consol Energy Inc.'s three Pennsylvania mines dropped 17% from the second quarter and 3.7% from the year-ago period.

Another data analysis showed that coal deliveries to U.S. power plants fell by 9.8% year over year, to 271 million tons, in the first six months of 2018.

Five coal-fired generating units that the Northern Indiana Public Service Co. plans to retire over the next decade have operating and maintenance expenses that exceed wholesale power prices, according to S&P Global Market Intelligence data. The potential retirements could equate to a significant reduction in the utility's overall owned generation, of which coal has consistently accounted for the lion's share.

On the federal level, lawmakers are gearing up for the approaching midterm election. The U.S Senate decided to adjourn until Nov. 13 to give lawmakers more time to campaign, but the move delayed a hearing by the Senate Energy and Natural Resources Committee scheduled for Oct. 16 to consider the nomination of Bernard McNamee to the Federal Energy Regulatory Commission. The hearing was rescheduled for Nov. 15.

If the party wins a majority in the U.S. House of Representatives, Democrats on the House Committee on Natural Resources are planning to scrutinize President Donald Trump's proposal to expand access to federal lands and waters from energy production.

Despite tough races for two U.S. senators who have supported federal investment and policy for carbon capture efforts, proponents said they think there is enough congressional support to advance the technology regardless of whether Democrats Heidi Heitkamp and Joe Manchin are re-elected.

Though Manchin has typically held onto support from his state's coal sector, the West Virginia Coal Association is supporting his challenger, Republican West Virginia Attorney General Patrick Morrisey. The association noted Manchin's support of the coal sector, but ultimately backed Morrisey in hopes of helping the GOP protect its majority in the Senate.

The coal sector's top political action committees have raised nearly $2.8 million leading up to the midterms, spent $2.9 million and had $1.2 million left to contribute in the final weeks leading up to the election, according to Federal Election Commission data. Several of the company-sponsored PACs contributed thousands of dollars to the National Republican Senatorial Committee, a committee working to strengthen the Republican majority in the Senate.

CSX Corp. kicked off the third-quarter earnings season for the major coal carriers, reporting a 14% year-over-year increase in coal revenues driven by the export market.

Peabody Energy Corp. declared a 13-cent per share quarterly dividend on the company's common stock, which will be payable on Nov. 21 to shareholders of record as of Oct. 31.

Bowie Resource Partners LP, a Colorado-based bituminous coal producer, announced it will change its name to Wolverine Fuels LLC and move its headquarters to Sandy, Utah.

Upcoming events

First Q3 coal earnings report: Arch Coal will announce its third-quarter earnings results before the market opens on Oct. 23.

Smithers Apex: The company will hold its MetCoke World Summit 2018 Nov. 6-8 in Pittsburgh.

Alpha-Contura merger vote: Stockholders of Alpha Natural Resources Holdings Inc. and its subsidiary ANR Inc. will meet in New York on Nov. 7 to vote on a proposed merger between Alpha Natural Resources Inc. and Contura Energy Inc.