U.S. Coal Stocks Fall as More Regulation Seen Post Obama Win

Peabody Energy Corp. (BTU), Alpha Natural Resources Inc. (ANR) and other U.S. coal producers slumped on speculation that the re-election of President Barack Obama will mean more regulation for the industry.

Peabody, the St. Louis-based coal miner that’s the largest in the U.S. by sales, fell 9.6 percent to $26.24 at the close in New York, the most in more than three months. Bristol, Virginia-based Alpha, the second-biggest, dropped 12 percent. Arch Coal Inc. (ACI), Consol Energy Inc. (CNX), James River Coal Co. (JRCCQ) and Walter Energy Inc. (WLT) also declined.

“The coal industry has seen increased regulatory oversight from the EPA on a number of issues under Obama’s first term, such as stricter permitting requirements in Appalachia and new regulations for emission reductions at utilities,” Lucas Pipes, an analyst at New York-based Brean Capital Carret & Co., said in an e-mail today. “There’s a perception that another Obama term is negative for coal.”

Pipes said rising natural gas prices, not regulations, will be the most important driver for coal demand. U.S. coal producers have shut mines and fired thousands of workers this year after cutting tens of millions of tons of output in the face of weaker demand and prices. Coal has suffered after some power stations switched to using gas.

James River also fell today after reporting its third-quarter net loss widened to 59 cents a share from 11 cents a year earlier.

To contact the reporter on this story: Lydia Mulvany in New York at lmulvany1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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