In a sign of the time. the U.S. Bureau of Land Management has turned down a bid of 21 cents a ton for the right to mine 167 million tons of coal in Wyoming. The bid is just 20% of the price paid for similar deposits a year ago and the lowest price since 1998. In a similar auction a month previously, the right to mine 316 million tons of coal attracted no bids.
U.S. coal exports are expected to decline by 5% this year and experts predict a greater decline next year. The decline has raised serious doubts about coal industry plans to expand export port capacity by 185 million tons a year.
Meanwhile, domestic U.S. coal consumption will drop to 1993 levels this year – even before new pollution rules are expected to effectively prohibit the construction of new coal-fired power plants.
Elsewhere, China has announce plans to cuts its reliance on coal for power generation from 75% to 67% by 2017. The Chinese government has recently banned the building of new conventional coal plants in Greater Beijing, the Yangtze Delta region near Shanghai and the Pearl River Delta, in Guangdong province.
In Australia, slowing demand has seen multiple coal mining projects placed on hold. Robert Neale, Managing Director of the large coal mining company New Hope Corporation Limited has warned that many resource companies are overvaluing their coal assets, while BHP Billiton's chief executive, Marius Kloppers, has told British journalists that "it is very difficult to visualise, given the current set of conditions and outlook, that any mining company can approve new capital in the coal business at this point and get a return".