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Peabody Energy Reports Higher Revenue, Tough Outlook

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Peabody Energy

The largest coal company in the world released its earnings report today, announcing that 2017 was a strong year for its production, revenue, and exports. Peabody Energy operates several of its largest mines in the Powder River Basin, including the North Antelope Rochelle, Rawhide, and Caballo mines. The company filed for bankruptcy in 2016 and re-emerged last year.

The company’s revenue from 2017 is up 18 percent over 2016, now up to $5.58 billion. That’s driven by 11 percent higher coal shipments from the Powder River Basin as well as low supply in the South Asian market. Rob Godby, University of Wyoming energy economist, said Peabody was fortunate to have mines in Australia.

“They’ve been able to take advantage of the really high metallurgical coal prices in Asia and they’re well placed for that having high coal prices in Asia,” Godby said.

In 2017, the company’s exports increased by 60 percent, its share price has increased by 79 percent, and it’s paid off $500 million in debt. Thermal and metallurgical coal from Australian mines accounted for a majority of the company’s earnings. Godby said policy changes are not a reason for Peabody’s improved outlook last year.

“Every month, we saw major coal generators announcing their retirement. It just goes to show you market conditions are really driving the market. If policy had been able to improve things, we would have seen that,” Godby said.

Godby posits the recent retirement of several large coal-fired power plants in Texas could bring a tough year for Peabody and other major coal producers. Other challenges could be decreasing natural gas and renewable prices, as well as static electricity demands.

Before Wyoming, Cooper McKim has reported for NPR stations in Connecticut, Massachusetts, and South Carolina. He's reported breaking news segments and features for several national NPR news programs. Cooper is the host of the limited podcast series Carbon Valley. Cooper studied Environmental Policy and Music. He's an avid jazz piano player, backpacker, and podcast listener.
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