Peabody files for bankruptcy
So the world’s largest private coal mining company, Peabody Energy, has filed for bankruptcy amid ever low and falling coal prices. The coal giant found itself unable to service its debt-driven expansion into Australia, according to Reuters.
Here’s our explainer on the background to this: Peabody Energy: The fall of the world’s biggest public coal company.
— Bloomberg (@business) April 13, 2016
The failure of @peabodyenergy gives me no pleasure b/c of the lost jobs. But what a perfect storm of management hubris and stupid investors!
— Michael Liebreich (@MLiebreich) April 13, 2016
— Sam Geall (@samgeall) April 13, 2016
Peabody’s rival Arch Coal also filed for bankruptcy recently amid challenging market conditions.
Bloomberg reports the coal industry downturn “is a result of tougher environmental policies, a flood of cheap natural gas and a global glut of metallurgical coal that’s dragged prices for steelmaking component to the lowest in more than 10 years.”
“This isn’t a death knell for coal. It’s the pains of a shrinking industry,” Bloomberg Intelligence analyst Andrew Cosgrove said before the filing.
In the US, coal was used for 28% of electricity in December last year, but US coal production is down about 30% on where it was this time last year. And some towns in the US are still clinging onto coal for dear life.
Oil price increase boosts global stock markets
Oil and mining company shares also increased following the news.
Energy giant clash over carbon pricing
Shell’s CEO Ben van Beurden has called for the global carbon price, again. In the past we have examined what some oil majors might be meaning when they ask for this.
Meanwhile, Chevron’s CEO pushed back on this and said a carbon price could spell bad news for energy poverty. However, analysis from the CTI has found that renewables – rather than coal – are a better solution for energy poverty.
Ben van Beurden also mentioned the possible sell-off of some of Shell’s North Sea assets to balance its portfolio.
In other news