The collapse of the biggest privately owned coal company in the world is a significant event. But it is not the end of the coal era, however much those of us who value the planet might like to see that.
Peabody Energy has been felled predominantly by a 75% slump in coal prices rather than tightening environmental regulation, though it will emerge out of bankruptcy protection to a world where coal will never again be king.
The US firm was caught out badly by a classic mistake in the business world: overambition, in this case to expand massively on the back of a strong run in commodity prices.
The $5bn purchase with Arcelor Mittal of Australia’s Macarthur in 2011 came just ahead of a downturn in commodity values that has accelerated in the last 18 months.
Coal producers have also been hit badly in the US by cheap shale gas, a serious competitor – and cleaner – fuel for power stations.
Environmental regulations are increasingly being tightened in many parts of the world against coal but there are estimates that as many as 500 coal-fired power stations are still planned or under construction, mainly in Asia. In the last 12 months alone, 150 have been given the go-ahead in China.
In the west, King Coal has been knocked off its throne and will not be getting back on. Britain has promised to halt the burning of all coal in power stations by 2025 as the country moves to a lower carbon energy system.
Following the climate change talks in Paris, calls to decarbonise faster and keep fossil fuels in the ground will only get stronger in many parts of the world. But the end of the coal era will only come when China, India and others reduce their commitment to it.
