BILLINGS — One of the largest coal mining companies in the Western U.S. reported a $205 million loss for 2015 after pinning its hopes for growth on an export market in Asia that has fizzled.
The results for Wyoming-based Cloud Peak Energy add to the litany of bad news for an industry hit by bankruptcies, low prices and tightening pollution rules.
The company operates three massive strip mines in the Powder River Basin of Montana and Wyoming. It attributed $58 million in losses to weak international coal prices, in year-end results released late Wednesday.
The losses came on earnings of $124 million, a 39 percent drop from the prior year.
“We expect 2016 to be another difficult year for U.S. thermal coal producers,” said Cloud Peak president and chief executive officer Colin Marshall.
The company’s coal shipments dropped 13 percent to 75 million tons last year. They are expected to drop further this year, to 64-70 million tons, with none of that coal expected to be exported.
Domestic demand for coal has declined sharply in the past decade.
Companies including Cloud Peak sought to offset their lost U.S. sales by shipping more of the fuel to Asia. Those shipments peaked in 2012 and have since fallen by about half, as China and other countries reduce their imports of the fuel, according to the Energy Information Administration.
In response, Cloud Peak has renegotiated shipping contracts with BNSF Railway and a West Coast port, Westshore Terminals, so that it is not compelled to send coal overseas when prices are uneconomic.
But Marshall added that large volumes of coal will continue to be burned in the U.S., while international demand is likely to rebound over time. “We are optimistic that coal demand will begin to stabilize in 2016,” he said.
Two of the largest players in the Powder River Basin, Arch Coal and Alpha Natural Resources, filed for bankruptcy protection in recent months. That doesn’t appear to be an immediate danger for Cloud Peak.
Financial filings show the company had almost $89.3 million in cash at the start of 2016, after paying off in 2015 all the remaining money it owed for coal leased from federal reserves.
The company also has reduced costs and increased its profit margin to $2.98 for each ton of coal sold, up 16 cents from the prior year.
Cloud Peak shares on the New York Stock Exchange were down about 7 percent, to $1.50 per share, in Thursday morning trading.