CNX Coal: Bad Timing?

Is there a worse time for an IPO of a coal company? 

Or, is this the best time to realize maximum value in an investment?   Article link: http://goo.gl/fQEoPo

Given the recent pile-on by the press for all things coal, one might expect Consol's spinning off of its coal assets into CNX Coal may be a case of really bad timing. Could there be a more troubled industry to invest in?

There are certainly investments less likely to pay off than CNX Coal. When it is all over with, CNX will be the last company to mine the last carload of coal in the US, whenever that day comes. And that be for a long while.

So, until then they will operate their superwall mines in multi-market Pittsburgh 8 coal and continue a strong presence in the low vol met markets. This insures that CNX Coal will survive and possibly do quite well.

We Knew All Along......

 

We Knew It All Along

There was an unmistakable momentum this past week for issuing press releases declaring a divestiture from all things coal.

A few of these were heartfelt changes in corporate approach and some were clearly press relations stunts. Even some nations which neither mine or use coal substantially were compelled to jockey to the highest place in the public square to denounce the industry.

This public handwashing was meant to stake one's ground as an early skeptic for coal's place in the future energy triumvirate and, to an intellectually lazy public, it probably worked as intended. We just knew all along.

The spectacle reminded me of a scene from the movie Wall Street where protagonist Bud Fox's boss, once all too eager to enjoy the profits of his lehrling's success, became all too eager to let the world know he had reservations about Fox and his methods all along. Just knew all along.

For the rest of us living in the real world, coal will continue to provide for the world's baseload energy, steelmaking, chemical production, filtration uses and others, albeit at a reduced production rate. Just like we have- all along.


#coal   #mining   #pressrelease   #economy   #environment   #processing   #wv  

Not Dead Yet....

Philadelphia, PA: Contrary to some recent press articles, the coal industry in general, and the anthracite coal industry in particular, are not yet dead.

Story: http://goo.gl/dGqQFp

A global economic slowdown coupled with changes in the power generation matrix in the United States are the major contributing factors in reduced coal production. While the effect of global economies on the coal industry are cyclical and recoverable, the changes in the power production matrix are transformative and will require a recalibration of our industry.

Coal will survive, albeit at reduced production rates. Some are predicting a return to 1980's production levels which is still substantial and economically important to the nation. Presently, mining and processing capacities far exceed the immediate delivery markets and this is unlikely to change for the next 24 months. How will we rightsize to meet this challenge?

Rightsizing of the industry will probably follow the arc of the 1982-1983 downturn which idled many of the higher cost mines and advanced the closing of older mines which were too inefficient to keep in production. Some coal qualities will fall from favor while proven qualities such as Pittsburgh No. 8 and low volatile coals will maintain their niches in the market mix.

We will rightsize. We will re-calibrate. And, we will survive. As we always do.

So, let's stop chipping away at that epitaph for now.