Increased demand around the world leads to record prices
The biggest U.S. coal miners are seeing soaring revenues as global demand for the dirtiest fossil fuel drives prices to record highs. Peabody Energy Corp., the biggest U.S. coal producer, saw second-quarter sales jump 83% to $1.32 billion, the most since 2018, the company said in a statement late last week. Arch Resources Inc. reported revenue of $1.13 billion, more than double the total from a year earlier and the most since 2011.
The results come a day after U.S. lawmakers announced a breakthrough spending deal that includes $370 billion to fight climate change, but also calls for increased lease sales on federal land for oil and gas drilling. Senator Joe Manchin, a democrat from coal-heavy West Virginia, had been a holdout in the protracted negotiations. Peabody said the gains in the quarter were “due to higher realized prices in every segment.” U.S. miners are facing strong domestic demand and increasing exports, with revenue bolstered by prices that have reached record highs in the U.S., Europe and Asia.
A global energy crisis has boosted demand for fossil fuels around the world, driving up prices. Costly natural gas has spurred demand for coal, but limited supplies have meant surging prices. The trend that started almost a year ago got a huge boost after the war in Ukraine started in February, prompting nations to ban imports of Russian coal and further increasing demand from suppliers including Peabody and Arch.
The war in Europe is further driving up demand as Russia threatens to limit gas shipments to the region, prompting power producers to rely more heavily on coal. Global consumption this year is set to match a record set in 2013, according to the International Energy Agency.