Salient to Investors:

After decades of strong performance, coal producers are starting to fail faster than anyone expected. Walter Energy is filing for bankruptcy,  Alpha Natural Resources was delisted from the NYSE due to its low share price. Arch Coal implemented a 1-for-10 reverse stock split to avoid delisting.

Coal prices are down 70% from 2011 as the US shifts to natural gas for electric power, amid new regulations to reduce greenhouse gas emissions and protect nearby water streams. The window of exporting coal to energy hungry countries like China is quickly closing due to an international oversupply and China’s less than expected demand. China’s economic growth is slowing, and it is implementing air pollution measures and propping up domestic producers.

SNL Financial estimates the total market cap of the publicly listed coal industry in the US is down more than 80% since April 2011 to under $9.30 billion, of which 40% is Consol Energy.

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