US coal industry faces hard times amid multiple challenges

After investing $15 billion to expand their reserves four years ago, coal companies are today faced with the prospect of bankruptcy and removal from major stock exchanges.

The New York Stock Exchange's move on Thursday to delist Alpha Natural Resources Inc, came a week after it adopted similar measures with Walter Energy Inc. The Stowe Global Coal Index, a performance measure for the industry, has fallen 38 per cent this year.

Coal faces multiple challenges. Its US market share was stolen by cheap natural gas as the dominant power-plant fuel for the first time in April as astrong dollar kept exports in check, while global prices for coking coal used in steel-making had fallen.

In 2011, when prices for metallurgical coal for the steel industry, rose to a record $330 a ton, companies including Alpha, Walter and Arch Coal Inc bought assets anticipating further price gains.

With strong demand from China, companies boosted reserves and developed new mines.

US imports in 2009 stood at six times the 2008 levels and grew each year through 2012, data compiled by Bloomberg showed.

Meanwhile, the Obama administration proposed new regulations on Thursday criticise the measures as yet another attack on coal that would cost jobs.

Current federal rules aimed at protecting streams near coal mines date back to 1983.

According to the Interior Department which issued its updated proposal, the changes would protect 6,500 miles of streams. Interior secretary Sally Jewell said in a statement, "We are committed to working with coalfield communities."

However, Republican lawmakers said the coal industry would suffer. Also the measures come after the Supreme Court said the Environmental Protection Agency improperly ignored the costs of its regulations.

"It's outrageous that less than a month after being rebuked by the US Supreme Court for ignoring the costs of its regulations, the administration is doing it again with this job-crushing, anti-coal rule," Republican senator John Barrasso, from Wyoming, said in a statement. "It's no secret that this overreaching rule is designed to help put coal country out of business."

With the proposed regulations, the buffer zone preventing coal mining from within 100 feet of streams to prevent debris from being dumped into the water would be maintained.