Peabody Energy Corporation (BTU), Arch Coal Inc (ACI), Alpha Natural Resources, Inc. (ANR): Possible Debt Refinancing Is Good for This Coal

Recent news from China will not help coal prices. Beijing plans to cut annual coal consumption by 13 million tons. At the same time, BHP Billiton has just opened the Daunia mine in Australia, which is expected to produce 4.5 million tons per annum. These developments highlight the problem of excess supply that plagues coal prices. The demand is restrained by environmental and economic worries, while more coal continues to enter the market.

It’s important to notice that all those miners have relatively easy debt schedules. The first major payment for Alpha Natural Resources, Inc. (NYSE:ANR) comes in 2015, when it will have to pay $823 million. Arch Coal Inc (NYSE:ACI) and Peabody have time until 2016, when they would have to pay $600 million and $650 million respectively. However, time is running out fast for these miners, and we will probably see more refinancing attempts to improve the debt schedule.

Bottom Line
Among these miners, Peabody Energy Corporation (NYSE:BTU) is the only company that can finish the year profitably. It gives it the edge in the debt market. As Peabody has shown its ability to operate more or less profitably in the current environment, I think that its refinancing effort would be successful. This will enhance the company’s financial position and provide support for the stock.

The article Possible Debt Refinancing Is Good for This Coal originally appeared on Fool.com and is written by Vladimir Zernov.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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