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Report finds more than half of US coal produced by four companies
October 3, 2013

In the past two years, more than half of U.S. coal production was attributable to the top four coal producers, the result of changes in regional production as well as a decades long trends toward the concentration of coal production around the top few companies. Peabody Energy Corp., Arch Coal Inc., Alpha Natural Resources and Cloud Peak Energy combined to supply 521 Mt (575 million st), or 52 percent of total U.S. coal production, in 2011, while more than 500 other companies supplied the remaining 48 percent. By comparison, the fifth largest coal producer in 2012, Consol Energy Company, contributed 31 Mt (34 million st), or 35 percent less than fourth-place Cloud Peak Energy, the U.S. Energy Information Administration reported.

Although the four companies have changed from year to year, the rising share of production held by the top four producers continues a longer term trend that began in the 1990s with the continued expansion of mines in the Powder River Basin in the western United States and with the divestment of coal properties by oil and gas companies. In 1990 and 1995, the top four accounted for 22 percent and 35 percent, respectively. By 2002, when total coal production levels were nearly identical to production in 2011, the top four coal producers accounted for 40 percent of the total U.S. production and increased to more than 50 percent in 2011 and 2012, based on preliminary 2012 data.

In 2011, the coal production from the top four companies combined represented 27 percent of Appalachian production, 18 percent of interior production and 77 percent of western production.

If measuring by the heat content of the coal produced, the top four coal producers' share of production was about 49 percent (compared to the 52 percent share on a tonnage basis) in 2011 because of the lower heat content —measured in British thermal units (Btu) — of western coal sources. Even so, the top four producers on a Btu basis still include Peabody, Arch, Alpha and Cloud Peak.

Peabody has been the number one U.S. coal producer for decades. It owns mines in both the western and midwestern basins as well as outside the United States. It expanded its production at existing mines by 56 percent, or 56 Mt (62 million st), between 2000 and 2011. Although most of this growth comes from the large, highly productive surface mines of the Powder River Basin, Peabody also owns mines in Arizona, New Mexico, Colorado and states in the interior region.

Several key mergers and acquisitions in the coal industry have occurred during the past few years. In 2009, Foundation Coal Holdings (fourth-largest producer in 2008) merged with Alpha Natural Resources. This action leapfrogged Alpha Natural Resources from the 14th-largest producer to the fourth-largest but with 16 percent more production in that slot than its predecessor, Foundation Coal. Alpha Natural Resources then acquired Alpha Appalachia Holdings Co. in 2011 (formerly A.T. Massey Coal Co.), and its production rose by 32 Mt (35 million st), or 44 percent, year-over-year. Alpha Natural Resources owns the Eagle Butte and Belle Ayre mines in Wyoming in addition to Appalachian mines.

In 2009, Rio Tinto Energy of America the second-largest producer in 2008 —reshuffled some production by divesting itself of Jacobs Ranch Mine in Wyoming, selling it to Arch Coal. This move allowed Arch Coal, an eastern and western coal producer, to solidify its second-place position in 2009, although it had been in the top four since 1998 when the (then) newly established company first acquired Powder River Basin mines. Cloud Peak Energy — exclusively a Powder River Basin coal company — also spun off from RTEA in 2009 and entered the top four, where it has remained.
 

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