Coal Miners Peabody, Coronado Explore Merger To Boost Production

  • Coronado Global Resources Inc CODQL confirmed merger discussions with Peabody Energy Corp BTU.
  • The merger could lead to a new global giant worth some $6 billion, the WSJ reports, depicting how the coal-price surge that followed Russia’s invasion of Ukraine is transforming the sector’s fortunes.
  • The report noted that Peabody had warned against bankruptcy protection for a second time, given the weakness in coal markets after the pandemic led to a sharp drop in power demand as factories closed or reduced output.
  • However, the Ukraine war compelled European countries to avoid Russian coal while also seeking alternative fuel supplies.
  • Peabody has thermal-coal mines in Wyoming, Indiana, and several other U.S. states. It also has mines in Australia.
  • Higher coal prices helped Peabody clock its highest quarterly pretax earnings in more than a decade in the three months through June and reached a market value of around $3.8 billion.
  • The report noted that a tie-up with Coronado would boost Peabody’s production of metallurgical coal. Metallurgical coal accounted for almost four in every five tons of coal that Coronado sold in the first half of this year.
  • Coronado has similarly recorded a recovery in earnings, the report specified. In August, Coronado swung to a first-half net profit of $561.9 million from a year-earlier loss of $96.1 million.
  • Price Action: BTU shares traded higher by 0.38% at $26.52 in the premarket on the last check Wednesday.
  • Photo Via Company
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