Downsizing the US coal industry: Can a slow-motion train wreck be avoided?

The US coal industry faces not just overcapacity but crippling liabilities that will outlive mine closures. Setting the industry on a viable course will require all stakeholders to step up with new ideas.

This report examines the decline in demand for US coal and the industry rationalization that would be required to mitigate overcapacity. It quantifies the industry's financial liabilities and the challenge it faces servicing them today and in the future. A wide array of stakeholders is embroiled in this crisis, from mine workers and retirees to communities and
state governments, from investors to pension funds and the holders of environmental claims against the mining companies. McKinsey believes that the industry's financial difficulties-particularly its potential inability to support its liabilities after 2020-are not yet broadly understood, and hopes that their analysis offers stakeholders a solid fact base to underpin their discussions about how to address the crisis.