Sunny days for some thermal coal producers as they bask in super profits

After a number of lean years, the sun is again shining for some thermal coal producers, as profits roll in at a heady rate that could easily be mistaken for another commodities boom. Take Glencore for example. In delivering his company’s exceptional 2017 results this week, Glencore’s CEO Ivan Glasenberg said: “Our performance in 2017 was our strongest on record, driven by our leading marketing and industrial asset businesses.” Zeroing in on the financial performance of Glencore’s global coal operations shows it pulled in revenue of $9 billion last year, up 39% from $6.5 billion in 2016. Its thermal coal sales volume dominated by Australian production rose just 1%, however, to 106.3 million mt from 105.7 million mt in 2016. The revenue figure excludes earnings from the company’s coal purchasing activities. Thermal coal was a standout performer for Glencore in terms of earnings before interest, taxes, depreciation and amortization with its Australian mines notching up $2 billion in EBITDA for 2017, a jump of 50% on $1.33 billion in 2016.   Strong seaborne thermal coal prices drove Glencore’s increased earnings from thermal coal, helped along by a 30 million mt increase in demand from  the Asia-Pacific market last year, and strikes and poor… continue reading

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Source: CTRM Center

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