Coal mining sector running out of time, says Citigroup
The Guardian, 19 August 2015
Industry unlikely to pick up without advances in carbon capture technology as governments seek to drive down emissions, banking giant warns.
US banking giant Citigroup says the global coal industry is set for further pain, predicting an acceleration of mine closures, liquidations and bankruptcies.
The value of listed coal companies monitored by Citi has shrunk from $50bn (£32bn) in 2012 to $18bn in 2015, a trend it believes will continue.
“On the demand side we think thermal coal is cyclically and structurally challenged and that current market conditions are likely to persist,” it says in a report released on Tuesday.
Large diversified mining companies, such as Rio Tinto, Anglo American and BHP Billiton are already rationalising their business plans to cope with the expected downturn, it says.
“In financial terms, we estimate that the value of unburnable reserves could amount to over $100tn out to 2050.”