WSJ a couple of days ago...."coal consumption for electric power production over the last 2 years is up modestly. i'll add TVA is upgrading its Shawnee coal plant in Ky. rather than replacingit.
Potentially the most hated resource of all is coal. In June, we recommended Natural Resource Partners (NYSE: NRP) for its coal royalties. The company is led by resource tycoon Corbin Robinson Jr. Shares have been punished while coal usage has remained strong. Regardless of your stance on this hated energy source, it's undeniable that the world is still powered by coal.
We call Robinson a "tycoon" with good reason. He has been taking advantage of distressed oil and gas assets during the market downturn. His acquisition of shale assets in Williston, North Dakota is a perfect example. The company paid $340 million for assets that immediately contributed to its bottom line. In 2015, this opportunistic purchase will earn $60 million in EBITDA, or nearly 18% on its purchase price. We're happy to participate in a deal like that.
More important, Robinson is quietly turning NRP into a diversified resource giant. Its massive and profitable portfolio of coal royalties represents a smaller portion of its growing revenue. All the while, Wall Street still treats it like a coal-mining company... which it is not.
One more interesting note... When NRP shares dipped all the way into the $11 range, NRP executives bought nearly 375,000 shares in the open market. Robinson and his son bought 355,000 shares by themselves. When insiders spend more than $4 million of their own money buying shares... you may want to take note. We think you can still buy shares of NRP... Corbin Robinson is.
Long article, 2 parts here:
The Obama administration is expected to release on Wednesday a contentious and long-delayed environmental regulation to curb emissions of ozone, a smog-causing pollutant linked to asthma, heart disease and premature death.
The sweeping regulation, which would aim at smog from power plants and factories across the country, particularly in the Midwest, would be the latest in a series of Environmental Protection Agency controls on air pollution that wafts from smokestacks and tailpipes. Such regulations, released under the authority of the Clean Air Act, have become a hallmark of President Obama’s administration.
Next year, the E.P.A. is expected to make final two more historic Clean Air Act rules aimed at cutting planet-warming greenhouse gas emissions from coal-fired power plants. Those rules, which are intended to curb pollutants that contribute to climate change, could lead to the shutdown of hundreds of power plants and freeze construction of future coal plants.
The Republican-majority Congress, to be led by Senator Mitch McConnell of Kentucky, the incoming majority leader, has vowed to block or overturn the entire group of rules. In a separate development, the Supreme Court on Tuesday agreed to take up a challenge led by industry groups against another E.P.A. rule intended to curb emissions of mercury from coal plants.
New highs today for dow and S&P.. ALL coal stocks down and have lost most of last week's big gains (NRP too).
Today's coal headlines:
1. "Arch Coal Stock falls today as thermal coal prices decline". - from "The Street".
2. "Natural gas boom is drowning out coal industries battle cry" - Forbes
3. "Don't buy CLF" - Jim Cramer (CLF leases met mines from NRP).
NRP is going much lower. ALL COAL STOCKS ARE GOING MUCH LOWER.
Dow up 6. Dow and S&P continue to make record highs. All coal stocks trading down. NRP opened up but now in the red and at the low of the day. GOING LOWER! Natural gas trading down.
Obama destroyed the conservatives (I am one) with his executive order re immigration. Republicans should have done something ages ago. Next executive order - carbon tax. Coal stocks are dead money (and worse).
Has no effect on NRP since NRP's mines are owned by them, not the mining companies, It might even help.
A Costco you get the Costco American Express Card.
3% back on gasoline. 2% at restaurant and travel. 1% on everything else.
BUt of course getting rid of the completely defective and therefore insane Progressive corn ethanol would be even better for average Americans.
Nothing new here.
Hedge funds attack the stock while going long the bonds.
Often you will witness Wall Street Progressives convince a naive management team to float a convertible.
Of course nothing better than to have Progressive politicos unleash a broadside at the critical moment.
As the Obama SEC did to LINE.
What is sure is that the coal plant inventory is dangerously low. Bring the soundness of the whole electrical grid into question. If it is again stressed by the weather.
The number of coal plant closures has already take the grid to a dangerous level of generating source undiversidication. Being topped off by the disruption of mining operations and the train relationships.
Sadly no matter what, government mandates insure the corn ethanol insanity goes first.
Of course no one can be certain of the American natural gas production. As the supply setting the marginal supply comes from manipulated oil markets.
Certainly nothing new in the WSJ article. Short interest in these stocks has been above 50% for months. If there is no improvement in coal fundamentals (thermal and met) these coal companies and others will bankrupt. ALL APPALACHIAN COAL IS BEING SHIPPED BELOW COST TODAY. More importantly to NRP holders, NRP will cut or eliminate distributions w/o improvement in fundamentals in the coal business.