Coal Mining Industry Profile

The US coal mining industry includes about 650 mining companies and about 250 exploration and mining support companies with combined annual revenue of about $39 billion. Major US companies include Alpha Natural Resources, Arch Coal, CONSOL Energy, and Peabody Energy. The US industry is concentrated: the top four companies account for about half of sales. About 1 billion short tons of coal are produced annually in the US, according to the Energy Information Administration.

Globally, the coal mining industry produces about 7.7 billion short tons of coal annually, accounting for about 27 percent of total energy consumption. The largest coal producers are China, the US, India, and Australia. Major coal mining companies outside the US include BHP Billiton (dually headquartered in the UK and Australia); Xstrata (headquartered in Switzerland); Anglo American (UK); ShenHua Group and Yankuang Group (China); and Coal India (India).

COMPETITIVE LANDSCAPE

Demand comes mainly from generators of electricity. Profitability depends on efficient operations, as coal is a commodity sold on the basis of price. Big companies have significant economies of scale in production and distribution. Small companies can compete if they hold long-term contracts or if they supply local customers. The coal mining industry is capital-intensive: average annual revenue per employee is about $440,000.

Because the US has ample domestic coal reserves and because of the high cost of transporting coal relative to its value, imports account for only about ...