ST. LOUIS _ A federal judge on Tuesday blocked a proposed joint venture between two of the world's largest private coal companies, Peabody Energy and Arch Resources, that federal regulators argued would allow the companies to dominate the Powder River Basin coal market.
The Federal Trade Commission "has shown that there is a reasonable probability that the proposed joint venture will substantially impair competition in the market for Southern Powder River Basin coal," U.S. District Judge Sarah Pitlyk ruled.
St. Louis-based Peabody and Creve Coeur, Mo.-based Arch in June 2019 proposed combining the country's two most productive mines, which border each other near Wright, Wyoming. The companies have said the joint venture combining Peabody's North Antelope Rochelle Mine and Arch Coal's Black Thunder mine would "unlock synergies" of $820 million.
The FTC moved to block the deal in February, while the state of Wyoming sided with the companies. Both coal miners are under financial pressure as coal continues to slide as an energy source in the U.S. in favor of cleaner natural gas and renewable energy.
"We are deeply disappointed with the court's decision as the intense all-fuels competition is clearly apparent to us," Peabody President and CEO Glenn Kellow said in a statement Tuesday morning. "Our focus now is on continuing to be the low-cost (Powder River Basin) coal provider to best compete against natural gas and subsidized renewables. We remain committed to ensuring our customers continue to have access to a reliable and affordable fuel source."
Pitlyk noted that the southern Powder River Basin is projected, despite coal industry headwinds, "to continue supplying a significant portion of the fuel for electricity generation in the United States for decades to come."
