Coal Mining

Coal Mining

Brief Excerpt from Industry Overview Chapter:

Companies in this industry develop coal mine sites, extract coal from surface and underground mines, prepare coal for use, and provide support activities for coal mining. Major companies include Arch Resources and Peabody Energy (both based in the US), as well as Anglo American (UK), BHP Billiton (dually headquartered in the UK and Australia), Coal India Limited (CIL), and ShenHua Group and Yankuang Energy (both in China).

COMPETITIVE LANDSCAPE

Demand comes mainly from generators of electricity. Profitability depends on efficient operations, as coal is a commodity sold on the basis of price. Big companies have significant economies of scale in production and distribution. Small companies can compete if they hold long-term contracts or if they supply local customers. The US industry is fragmented: the top four companies account for about 35% of sales.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products of companies engaged in coal mining include bituminous coal accounting for about 70% of revenue, lignite coal for about 10%, and run-of-mine coal for about 15%. They also acquire revenue from offering support services.