Coal’s US comeback fuelled by rival

28 Aug 2017   Coal

Paringa Resources, a mining company with no production but some long-cherished plans, has been one of the most immediate beneficiaries of President Donald Trump’s election. Since 2012 it has been looking at a potential coal mine in Kentucky, acquiring leases and drawing up plans. The reserves are thermal coal, used for power generation, and Paringa had a contract to sell 40 per cent of the mine’s output to utilities owned by PPL. But last year it still needed to raise the capital to make the project a reality. Mr Trump, with his promise to “bring back coal”, caused “a sea-change in sentiment in the market,” says Grant Quasha, Paringa’s chief executive. In the spring, the company was able to raise A$53m (US$42m) on the Australian Stock Exchange and a $20m debt facility from Macquarie, and construction started this month. A year from now, the Poplar Grove mine is scheduled to begin production. The investment is one of the signs of life in the US industry, along with increased production and exports, fuelling talk that coal is making a comeback. Production in the first quarter was up 14 per cent on the equivalent period of 2016, and exports were up 58 per cent. Mr Trump has been quick to claim the credit, telling a rally in Phoenix last week: “We’ve ended the war on beautiful, clean coal.”

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