The coal mining companies experienced the most difficult period after the golden era ended. The low oil price makes the coal price not able to increase. Also the economic condition keeps complicating the rebound. And when it was about to sink, the banking industry is directed not to provide capital assistance. So what is the consequence?
These are the capital conditions that the coal mining companies are facing:
1. The debts are getting bigger because the operational costs are often not enough to be fulfilled by revenue.
2. Losses for couple times in a row in several years.
3. As the result, the bank avoids to provide loans to this industry that is on the risk.
4. And although there will be provided loan, the interest will be much bigger and it will end up pressuring the company’s profitability.
The consequence is that the mining companies are not able to pay the capital expenditure that is needed to get the reserves coal. The reserves coal is certainly necessary to extend the company’s age in the future. Without the amount of reserves coals, the mining companies will only waste their savings.
Ironically, there is so much mining that is sold with a cheaper price, but none of the customer dares to come.
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