Markets: Dark days for thermal coal

Domestic thermal coal producers are battling a drop in demand and profitability as cheaper alternatives win favour.

Without doubt the thermal coal industry is facing dramatic structural challenges. The market is in oversupply and domestic producers are taking measures to outprice rivals in a bid to move the black rock. Adding to the woes of coal miners is shale gas, which is a much cheaper energy alternative.

To move reserves, Aussie coal miners are outpricing the market where they can. Consequently the profitability of coal mining is becoming squeezed for other producers, especially those with mines in the coal-rich country of Mongolia.

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