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More than half of US coal mined in 2017 came from 5 companies

More than half of the coal produced in the U.S. comes from five companies, with the largest company producing one in every five tons.

Peabody Energy Corp. far outproduced any other coal company in 2017 with 156.7 million tons from U.S. operations, a 20.3% share of the total coal produced in the U.S. Nearly two-thirds of Peabody's production came from a single mine, the North Antelope Rochelle mine in Wyoming, which is itself responsible for 13.1% of the coal produced in the entire country.

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Peabody's coal production was up 9.6% in 2017 compared to the prior year. The company recently said it expects production from its Powder River Basin operations to be "marginally down" in 2018.

"We'll take a look at where our customer requirements are later as we progress through the year and see where we end up, but we are very focused on maintaining strong margins out of that basin," Peabody Executive Vice President and CFO Amy Schwetz said Feb. 7. "We count on the [Powder River Basin] to be the anchor to our U.S. platform."

Production data from the S&P Global Market Intelligence analysis of U.S. Mine Safety and Health Administration data includes some mine production that is rated based on ownership data for mines with multiple ultimate owners.

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The second-largest coal company by production in the U.S. was Arch Coal Inc., which produced 97.9 million tons in the year. The company, which mines both thermal and metallurgical coal across U.S. coal basins, boosted its production 5.3% compared to the prior year.

Cloud Peak Energy Inc., a pure-play Powder River Basin miner that is the third-largest coal company by production in the U.S., was the only coal producer among the top five to decrease production from its mines year over year in 2017. Still, the company's 57.6 million tons of production was equal to 7.4% of coal production in the U.S.

Murray Energy Corp. is very near to taking over Cloud Peak's third-place position as the Northern Appalachia and Illinois Basin-focused coal miner has continued to consolidate the industry with major coal acquisitions. At a February coal industry event, Murray Energy CEO Robert Murray called consolidation of U.S. thermal coal markets the sector's "greatest need" after a wave of bankruptcies in the sector with few mine closures.

"Those of us who have avoided bankruptcy now must compete with these streamlined companies in the same marketplace while we pay our debts on a current basis and are taking care of our employee obligations," Murray said. "This creates a very difficult situation, and the consolidation and closing of mines is the only answer, as the domestic steam coal market will remain flat for the foreseeable future at 650 [million] to 750 million tons of thermal coal consumption per year."

The 57.3 million tons Murray Energy produced in 2017, up 2.4% over the prior year, does not include production from Armstrong Energy Inc. properties that Murray Energy announced it would acquire in early 2018.

Together, the top 10 ultimate owners of coal mines control 71.8% of the coal mined in the U.S. in 2017. Production at the state level is even more concentrated toward the top.

In Wyoming, for example, two companies — Peabody and Arch mine 64% of the coal in the state. Murray Energy controls 36% of the coal produced in West Virginia, while Alliance Resource Partners LP produced 39.7% of the coal mined in Kentucky in 2017.

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