Thursday, May 10, 2012

Seeking Alpha: Patriot Coal: Different Coal Company, Same Coal Situation

How bad is the coal market? Some electrical utilities are paying coal companies *not* to ship them any more coal (negotiated deferrals). Couple that with rapidly escalating costs and heavy regulatory burdens on underground mining and a wobbly market for coking (metallurgical) coal, and Patriot Coal (PCX) is in the same leaky boat as Peabody (BTU), Arch Coal (ACI), and Walter (WLT).

There's definitely value at Patriot coal - at current production levels, Patriot's reserves will outlive most of us. The relevant questions for the stock, though, revolve around whether the market can recover fast enough to forebear a difficult liquidity situation and whether the U.S. government will let miners like Patriot stay in business.

Please click here to continue:
Patriot Coal: Different Coal Company, Same Coal Situation

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