‘Coal is in decline’ and it looks like not even Donald Trump can pull the industry’s long-term future out of the fire – by Geoffrey Morgan (Financial Post – March 8, 2017)


At their most generous, Las Vegas oddsmakers put the chances of Donald Trump winning the U.S. presidency at 25 to one. In other words, a long shot and one that likely mirrored any potential rebound by the country’s thermal coal miner stocks.

Coal mining companies have faced a constant “onslaught” of new regulations in the months and years leading up to the most recent U.S. election, said Cloud Peak Energy Inc. chief financial officer Heath Hill, including Barack Obama’s Clean Power Plan, which was designed to encourage cleaner burning natural gas and renewable power at the expense of coal-fired electricity.

“It was effectively a ‘keep coal in the ground’ campaign, where the NGOs were really well supported by the administration’s coordinated regulation and implemented rules in a way that were very disadvantageous to the coal industry,” Hill said.

But as we all know, Trump did overcome the odds and the effect on coal stocks became quickly apparent. Despite a recent pullback, Cloud Peak shares have risen 112 per cent in the past 12 months and the company is one of several thermal coal miners to post massive stock price rebounds.

TSX Venture-listed Corsa Coal Corp.’s share price rocketed 120 per cent over the same period. Similarly, Westmoreland Coal Co. is up 91 per cent and CNX Coal Resources has gained 122 per cent.

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