[ad_1]
Peabody Energy, now the world’s largest private coal mining company, is once again cutting jobs and flirting with bankruptcy. The company’s share price has plummeted 96% since it began trading in April 2017. Peabody’s market valuation has dwindled to just $100 million from its all time high of $5.9 billion two-and-a-half years ago.
“Markets are more powerful than politics,” Jeff McDermott, head of Nomura Greentech, Nomura’s clean energy investment banking department, told CNN Business.
Peabody’s bankruptcy warning speaks volumes
“The market is looking into the future and having greater confidence that renewables are going to be larger and high-carbon will be less valuable,” McDermott said.
Earlier this month, Peabody Energy disclosed its third-straight quarterly loss as revenue tumbled a whopping 39%.
“As coal’s decline continues, it will likely push Peabody Energy, the former standard-bearer for the global coal industry, into financial oblivion,” according to a report by the Institute for Energy Economics and Financial Analysis, a group that aims to accelerate the energy transition.
Weak demand for coal
Peabody is cutting jobs, idling mines and working with its creditors to try to stay afloat.
“While we have made progress, there is still more to do,” Peabody CEO Glenn Kellow said in the company’s earnings report.
Like many other industries, coal miners are being hurt by the pandemic, which derailed factory activity. Peabody said demand for metallurgical coal, which is used in steelmaking, has not recovered from pre-crisis levels.
Solar could be king by 2025
“Demand for solar is as good as it’s ever been,” SunPower CEO Tom Werner said in an interview.
By 2025, renewables will overtake coal to become the largest source of power generation worldwide, accounting for one-third of electricity, the IEA said.
McDermott, the Normura clean energy banker, is taken aback by how the Trump era has played out for the renewable energy industry.
“When Trump won in 2016, I remember thinking this would be awful for our business,” he said. “Instead, it was the greatest four years of our history.”
[ad_2]
Source link