The price of coal is breaking records and these 3 companies will benefit, as will their shareholders

The rising price of oil and gas is now being followed by coal. It has even reached a record price per tonne at the Australian port of Newcastle, a hub in the distribution of coal around the world. Logically, miners have benefited and will benefit even more. Let's take a look at 3 specific mining company stocks.

The coal price is driven by high demand, which is mainly coming from coal-fired power stations. Their production is needed now more than ever, given the severe energy crisis Europe is in. In addition to demand, the disruption of mining in Australian mines, a key global supplier, is playing a significant role in the coal price. This may be due to weather fluctuations, especially the excessive rainfall generated by La Nina.

In some previous La Nina seasons, coal mines and railways in the Australian states of New South Wales and Queensland have been disrupted by heavy rainfall, and during particularly bad weather that lasted for several months in 2010 and 2011, production fell by an estimated 20 to 30%. There is a good chance that this could happen again.

Australia is the 2nd largest coal exporter in the world, for this reason the weather there can play a large role on the supply and subsequent price of coal on the market, source:

1. Arch Resources $ARCH-2.1%

A big player among coal stocks is Arch Resources, a coal mining and processing company that ranks 2nd in terms of coal supply in the US. ARCH is a clear beneficiary of the sector's sudden prominence, having gained nearly 51% year-to-date.


While some people may not like investing in names that are already up, the stock is likely to be up for the rest of this year. How? Demand for coal will continue to rise. Arch in particular deserves serious buying consideration as it turns around its fundamentals in the wake of the Covid-19 pandemic. In 2021, the company generated a net profit of $338 million and continues to report growing positive numbers within Financials.

2. BHP Group $BHP-0.8%

The Australian company operates in the copper, iron ore and coal segments. It is engaged in the mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore and metallurgical and thermal coal. So we can see that the scope of the company is really wide. Moreover, its history goes back to 1851.

The stock is down nearly 1% since the beginning of the year. For dividend lovers, it's worth noting that the dividend yield is a solid 12%+ at today's prices.


If demand for coal drops for any reason, the company is prepared to move into other major categories. BHP may also be an interesting investment because of its copper production, which is important for things like electric vehicles.

3. Peabody Energy $BTU-0.6%

Peabody Energy, which is the largest coal supplier in the U.S., is one of the leaders in the global pure-play coal investment sector. Year-to-date, Peabody is up 105%, an impressive performance, but not entirely unusual in this segment.


The company is engaged in the mining, preparation and sale of thermal coal primarily to power utilities, mining of hard and sub-bituminous coal deposits and mining of metallurgical coal such as hard coking coal, semi-hard coking coal, semi-soft coking coal and powdered injected coal. The company mainly supplies coal to power generators, industrial enterprises and steel producers.

Do you think the bet on coal companies makes sense and demand for coal will continue to rise? 🤔

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