NEW YORK, NY -- (Marketwire) -- 12/10/12 -- The coal mining industry has experienced major struggles in 2012 as warm temperatures and the emergence of natural gas as a cheaper alternative have caused demand for the commodity to plummet. The Market Vectors-Coal ETF (KOL) has fallen 25 percent year-to-date. The Paragon Report examines investing opportunities in the Coal Industry and provides equity research on Arch Coal Inc. (NYSE: ACI) and CONSOL Energy Inc. (NYSE: CNX).
Gordon Howald, senior vice president of Doyle Trading Consultants LLC, at a recent conference stated that coal companies lost a total of 93 million tons in demand this year as total demand for coal in the U.S. declined 9.9 percent in 2012. Data from the Energy Department has shown that electricity demand for coal fell from 42 percent in 2011 to 37 percent in 2012, while electricity demand for natural gas rose from 25 percent to 31 percent over the same period. From now to 2020 a total of 34,700 megawatts of coal-fired generators will be shut down by utilities according to Howald.
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Arch Coal is a top five global coal producer and marketer, with 157 million tons of coal sold in 2011. The company's core business is supplying cleaner-burning, low-sulfur thermal and metallurgical coal to power generators and steel manufacturers on five continents. Arch control a vast domestic reserve base totaling 5.6 billion tons.
CONSOL Energy has 12 bituminous coal mining complexes in four states and reports proven and probable coal reserves of 4.5 billion tons. The company's premium Appalachian coals are sold worldwide to electricity generators and steelmakers. CONSOL recently announced plans to idle all Miller Creek surface operations. To date in 2012, the Miller Creek complex has produced 1.55 million tons of coal.
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