PITTSBURGH — The owner of the largest closely held U.S. coal producer said Monday more of his competitors are likely to go bankrupt because there's "nothing on the horizon" to suggest demand and prices will recover.
"Some companies have been totally erased by bankruptcy or significant liquidity problems, and other probable company financial failures have been identified by us," Robert E. Murray said in a speech at an industry conference in Pittsburgh organized by Platts. He declined to identify companies that may be at risk.
"We are planning for a somewhat reduced coal marketplace, in terms of prices and demand, through at least next year, with only a possible slight improvement in the years beyond," said Murray, the founder, chairman and chief executive officer of Murray Energy Corp.
U.S. producers James River Coal Co. and Patriot Coal Corp. have filed for bankruptcy since the start of 2012 as cheap natural gas supplies, spurred by the fracking boom, undermined demand from U.S. utilities for coal. Tighter pollution regulations are also leading to the closing of some coal-fired power plants. Murray opposes the rules, which he predicted will lead to the closing of 411 plants by 2016, accounting for 100,000 megawatts of capacity.
Murray Energy has 12 large, active underground mines, 7,400 employees, and should produce 65 million tons of coal this year, its CEO said. The St. Clairsville, Ohio-based company bought coal assets including five West Virginian mines from Consol Energy Inc. last year for about $850 million.
Murray said he's helping to fund Republican Party efforts for the November mid-term elections and that global warming is a hoax.
"The insane, regal administration of King Obama has ignored science, economics, our poorer citizens and those on fixed incomes, our manufacturers, and the constitution, as it has bypassed our Congress," he said Monday.
U.S. coal stocks have tumbled amid the decline in prices for both thermal coal and metallurgical coal, which is used to make steel. They were down again today: Peabody Energy Corp., the nation's largest producer, fell as much as 4 percent in New York; Walter Energy Inc. slid 11 percent; Alpha Natural Resources slumped 9.7 percent and Arch Coal Inc. declined 8.7 percent.
Demand in China, the largest producer and user of coal, may peak as soon as this year, the Carbon Tracker Initiative said Monday in a report. The group, which promotes the idea that the world can't burn all the fossil fuels it's investing in while meeting its climate goals, counts among its financial backers Bloomberg Philanthropies, which is led by Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent of Bloomberg News.
Peabody, trading at its lowest in a decade, said Sept. 18 it sees encouraging signs in the metallurgical-coal market. It also said Indian thermal-coal imports are increasing faster than expected and it doesn't expect to be hurt by China's recent decision to stop importing lower-quality thermal coal.