DOMINATION REPORT

A Presidential Attempt to Revive the Coal Industry



When President Trump stated that he wanted to implement policies with his executive powers to stimulate an industry sector in America, as of late it has been well worth the time to get involved with whatever industry the President plans to stimulate. The Coal mining industry has been in the sights of President Trump, and because of the recent financial gains in the steel industry and pharmaceuticals after similar statements, it warrants taking a look into coal.

On March 20, President Donald Trump said he was preparing new executive actions to save coal mining in America and put miners back to work. "As we speak we are preparing new executive actions to save our coal industry and to save our wonderful coal miners from continuing to be put out of work. The miners are coming back," were Trump's exact words spoken at a rally in Louisville, Kentucky.

There were not any details given as to what those executive actions would be, but if and when we see energy executives sitting at Trump's bargaining table, the potential to realize gains in coal are possible.


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I found four mining entities that were considered to be the top coal mining facilitators in the US. Cloud Peak Energy Inc. (CLD), BHP Billiton Limited, ADR (BHP), Rio Tinto plc (RIO), and South32 Limited (SOUHY). I immediately added them to my watch list, while I am weighing out when a potential buy in opportunity may present itself.

South32 Limited (SOUHY)

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The coal industry overall has seen substantial gains over the last 2 years globally. The world may want cleaner fuels, but those fuels are expensive, and coal is still one of the cheapest fuels available to run electrical generator turbines, and provide heat for other facets of manufacturing as well. Coal has been gathering support from industrial powerhouses Japan and South Korea. Japan is using record amounts of coal for generation of electricity since the 2011 Fukushima disaster that shattered its nuclear sector. Korea plans to build 20 new power plants that will use coal as a fuel source by 2022.

General Electric (GE), one of the world's biggest suppliers of power plant equipment, was preparing the 'last rites of passage' for coal,  but now because of the combination of GE's push into global markets, and its need for growth after the financial crisis. GE is bullish about coal once again. GE's leaders say they can reap decades of profits from existing coal fueled electrical power plants. The company nearly doubled its fleet of large turbines in coal fueled electrical power plants to more than 1,500 worldwide, through its $10 billion US dollar acquisition of Alstom SA's power business nearly two years earlier.

Executives say they are poised to build coal fueled electrical power plants in developing economies across Southeast Asia, where demand for electrical power has grown quickly, and alternate fuel sources are unavailable or too expensive. Global electric production fueled by coal in 2040 is likely to be 23% higher than in 2012. This projection is from the U.S. Energy Information Administration during the early portion of last year.

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This information, combined with the proposed policies to be implemented by President Trump, presents the possibility of continued success in this industry. Since the American President is planning to shake up the market, focusing on American mining operations may not be a bad idea.

A commodity that has fallen from great levels from yesteryears  may yet still rise up from its despair and provide an investment opportunity to those paying attention. The Trump factor may weigh in on this industry as it has in others of late. We have yet to see his policy revealed or the legislation enacted. Being aware, ready, and informed about the potential continuation of this upward trend in general may prove to be quite helpful.