Coal giant Peabody Energy is writing down the value of its huge North Antelope Rochelle Mine in Wyoming by $1.42 billion, the company announced yesterday.
Why it matters: It's the world's largest coal mine, per several reports, and the write-down is a stark sign of the coal sector's wider struggles in a changing power mix.
- The move came as Peabody posted an overall second-quarter loss of $1.54 billion.
The big picture: The write-down was the result of "changes in multiple assumptions, including lower long-term natural gas prices, timing of coal plant retirements and continued growth from renewable generation," the company said.
- Coal's share of the U.S. electricity mix has been declining for years, and the country's coal production last year hit its lowest level since 1978, with continued declines occurring this year.
What they're saying: The pandemic is adding to the sector's woes, Moody's analyst Benjamin Nelson tells the Financial Times.
- “The longer the pandemic plays out, the more early retirements [of coal-fired plants] and permanent demand destruction from coal we’ll see,” Nelson said.