Coal Industry Faces Ongoing Challenges Amid Energy Transition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 26 2026
0mins
Source: NASDAQ.COM
- Declining Coal Demand: According to the EIA, U.S. coal production is projected to fall to 518 million short tons in 2026, a 2% decrease from 2025, primarily due to increased renewable energy usage, indicating a gradual replacement of coal in power generation.
- Limited Export Opportunities: While coal exports are expected to see modest growth in 2026, mainly driven by metallurgical coal, the ongoing weakness in domestic coal demand poses long-term challenges for the industry, forcing producers to seek new markets and revenue streams.
- Impact of Environmental Policies: The U.S. Sustainability Plan aims for 100% carbon-free electricity by 2030, which is expected to accelerate the decline in coal usage, particularly as natural gas and renewable energy costs decrease, further diminishing coal's competitiveness.
- Bleak Industry Outlook: The Zacks coal industry currently ranks 191 out of 247 industries, placing it in the bottom 23%, reflecting analysts' declining confidence in the sector's earnings growth potential, with 2026 earnings estimates down 53.3% to $1.65 per share.
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Analyst Views on ARLP
Wall Street analysts forecast ARLP stock price to rise
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 23.780
Low
33.00
Averages
33.00
High
33.00
Current: 23.780
Low
33.00
Averages
33.00
High
33.00
About ARLP
Alliance Resource Partners, L.P. is a diversified energy company. It is engaged in the production and marketing of coal to domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located across the United States. Its segments include Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties. Illinois Basin Coal Operation includes the Gibson County Coal, LLC mining complex; the Warrior Coal, LLC mining complex; the River View Coal, LLC mining complex and the Hamilton County Coal, LLC mining complex. Appalachia Coal Operations include the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining, LLC mining complex. The Oil & Gas Royalties include oil and gas mineral interests held by Alliance Minerals as well as its equity interests in AllDale III. Coal Royalties segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ARLP Completes Acquisition of AllDale Minerals
- Acquisition Completed: Alliance Resource Partners, L.P. (ARLP) has completed its acquisition of AllDale Minerals III and IV for approximately $206.2 million, enhancing its control in the oil and gas royalties sector and potentially increasing future revenue prospects.
- Diverse Funding Sources: The acquisition was funded through a combination of cash, borrowings under its revolving credit facility, and a new $150 million term loan, demonstrating ARLP's financial flexibility and robustness in capital management.
- Expanded Resource Control: Following the acquisition, ARLP now controls approximately 115,680 net royalty acres in its oil and gas royalties segment, including over 44,770 acres in the Permian Basin, further solidifying its position in the energy market.
- Future Outlook: ARLP plans to provide additional commentary regarding the acquisition during its next quarterly earnings conference call, indicating the company's commitment to transparency and investor communication, which may enhance market confidence.
See More
Coal Industry Faces Ongoing Challenges Amid Energy Transition
- Declining Coal Demand: According to the EIA, U.S. coal production is projected to fall to 518 million short tons in 2026, a 2% decrease from 2025, primarily due to increased renewable energy usage, indicating a gradual replacement of coal in power generation.
- Limited Export Opportunities: While coal exports are expected to see modest growth in 2026, mainly driven by metallurgical coal, the ongoing weakness in domestic coal demand poses long-term challenges for the industry, forcing producers to seek new markets and revenue streams.
- Impact of Environmental Policies: The U.S. Sustainability Plan aims for 100% carbon-free electricity by 2030, which is expected to accelerate the decline in coal usage, particularly as natural gas and renewable energy costs decrease, further diminishing coal's competitiveness.
- Bleak Industry Outlook: The Zacks coal industry currently ranks 191 out of 247 industries, placing it in the bottom 23%, reflecting analysts' declining confidence in the sector's earnings growth potential, with 2026 earnings estimates down 53.3% to $1.65 per share.
See More
Alliance Resource Partners Acquires AllDale Minerals for $206.2M
- Acquisition Overview: Alliance Resource Partners (ARLP) announced its agreement to acquire general and limited partner interests in AllDale Minerals III and IV for $206.2 million, significantly enhancing its economic interests in premier basins.
- Resource Base Expansion: This acquisition increases ARLP's economic interest in AllDale III and IV from approximately 5% to 61%, fully owning the general partner interests, and is expected to control 115,860 net royalty acres, strengthening its market position in the northern Delaware, Anadarko, and Bakken regions.
- Production Capacity Boost: With Q1 production totaling 17,295 boe/day, of which 14,285 boe/day is net to ARLP's interests, the acquisition is projected to increase new wells placed on production by 59%, 78%, and 91% in the Anadarko and Bakken regions, significantly enhancing overall production capacity.
- Market Demand Opportunity: By entering the Haynesville, a key natural gas resource play, ARLP is poised to better meet LNG export demand, further strengthening its competitive edge and strategic positioning in the energy market.
See More
Alliance Resource Partners Acquires AllDale Minerals for $206.2 Million
- Acquisition Overview: Alliance Resource Partners (ARLP) announced the acquisition of certain general partner and limited partner interests in AllDale Minerals III and IV for approximately $206.2 million, with a total transaction valuation of about $410 million, expected to close in July 2026, significantly enhancing ARLP's market position in the minerals sector.
- Increased Economic Interest: Following the acquisition, ARLP's economic interest in AllDale III and IV will rise from approximately 5% to 61%, and through a wholly owned subsidiary, ARLP will fully control the general partner interests, further solidifying its strategic positioning in the oil and gas sector.
- Production Capacity Enhancement: AllDale III and IV hold approximately 48,500 net royalty acres, which is expected to increase ARLP's average daily production capacity from about 5,940 BOE to 17,295 BOE, significantly boosting its competitiveness in key oil and gas basins.
- Financial Benefits Expected: The acquisition is anticipated to be immediately accretive to ARLP's free cash flow per unit and will be funded through a combination of cash, credit, and new debt financing, maintaining a pro forma total leverage below 1.0x to ensure liquidity for future growth.
See More
The Potential and Challenges of Coal's Revival
- Surging Market Demand: Babcock & Wilcox (B & W) currently holds a $2.7 billion backlog, with $2.4 billion stemming from its partnership with Applied Digital, indicating a robust growth in power demand driven by the data center boom, which may lead to a revival of coal.
- Significant Stock Performance: B & W's stock has surged 244% over the past year, rising from below $1 to $21, reflecting optimistic market expectations for its future growth potential, despite facing controversies related to Applied Digital.
- Policy Support for Coal: President Trump and the Energy Secretary are actively working to prevent the closure of coal plants, viewing coal as a vital national security resource, which could provide new business opportunities for companies like B & W, despite ongoing environmental concerns.
- Changing Competitive Landscape: B & W possesses unique capabilities in building natural gas power plants, and with GE Vernova currently at capacity, B & W's expansion potential may position it favorably in the future energy market, particularly in the combined use of coal and natural gas.
See More
Magnolia Group Sells 1.17 Million Shares of Alliance Resource Partners
- Share Sale Overview: On April 24, 2026, Magnolia Group disclosed the sale of 1,170,437 shares of Alliance Resource Partners, with an estimated transaction value of $30.30 million, indicating a strategic adjustment in their coal market investments.
- Asset Management Changes: This transaction resulted in Magnolia's 13F reportable assets under management (AUM) decreasing from $606.51 million to $537.51 million, an 11.4% drop, highlighting a significant portfolio reconfiguration.
- Holding Proportion Adjustment: Magnolia's stake in ARLP was reduced from 2,581,697 shares to 1,411,260 shares, a decrease of approximately 45%, making ARLP account for 7.26% of its portfolio, reflecting diminished confidence in this asset.
- Market Performance Comparison: As of April 23, 2026, ARLP shares were priced at $25.23, up 2.4% year-over-year, but underperformed the S&P 500 by 29.88 percentage points, indicating a cautious market sentiment towards the coal industry.
See More
ARLP Completes Acquisition of AllDale Minerals
- Acquisition Completed: Alliance Resource Partners, L.P. (ARLP) has completed its acquisition of AllDale Minerals III and IV for approximately $206.2 million, enhancing its control in the oil and gas royalties sector and potentially increasing future revenue prospects.
- Diverse Funding Sources: The acquisition was funded through a combination of cash, borrowings under its revolving credit facility, and a new $150 million term loan, demonstrating ARLP's financial flexibility and robustness in capital management.
- Expanded Resource Control: Following the acquisition, ARLP now controls approximately 115,680 net royalty acres in its oil and gas royalties segment, including over 44,770 acres in the Permian Basin, further solidifying its position in the energy market.
- Future Outlook: ARLP plans to provide additional commentary regarding the acquisition during its next quarterly earnings conference call, indicating the company's commitment to transparency and investor communication, which may enhance market confidence.
See More
Coal Industry Faces Ongoing Challenges Amid Energy Transition
- Declining Coal Demand: According to the EIA, U.S. coal production is projected to fall to 518 million short tons in 2026, a 2% decrease from 2025, primarily due to increased renewable energy usage, indicating a gradual replacement of coal in power generation.
- Limited Export Opportunities: While coal exports are expected to see modest growth in 2026, mainly driven by metallurgical coal, the ongoing weakness in domestic coal demand poses long-term challenges for the industry, forcing producers to seek new markets and revenue streams.
- Impact of Environmental Policies: The U.S. Sustainability Plan aims for 100% carbon-free electricity by 2030, which is expected to accelerate the decline in coal usage, particularly as natural gas and renewable energy costs decrease, further diminishing coal's competitiveness.
- Bleak Industry Outlook: The Zacks coal industry currently ranks 191 out of 247 industries, placing it in the bottom 23%, reflecting analysts' declining confidence in the sector's earnings growth potential, with 2026 earnings estimates down 53.3% to $1.65 per share.
See More
Alliance Resource Partners Acquires AllDale Minerals for $206.2M
- Acquisition Overview: Alliance Resource Partners (ARLP) announced its agreement to acquire general and limited partner interests in AllDale Minerals III and IV for $206.2 million, significantly enhancing its economic interests in premier basins.
- Resource Base Expansion: This acquisition increases ARLP's economic interest in AllDale III and IV from approximately 5% to 61%, fully owning the general partner interests, and is expected to control 115,860 net royalty acres, strengthening its market position in the northern Delaware, Anadarko, and Bakken regions.
- Production Capacity Boost: With Q1 production totaling 17,295 boe/day, of which 14,285 boe/day is net to ARLP's interests, the acquisition is projected to increase new wells placed on production by 59%, 78%, and 91% in the Anadarko and Bakken regions, significantly enhancing overall production capacity.
- Market Demand Opportunity: By entering the Haynesville, a key natural gas resource play, ARLP is poised to better meet LNG export demand, further strengthening its competitive edge and strategic positioning in the energy market.
See More
Alliance Resource Partners Acquires AllDale Minerals for $206.2 Million
- Acquisition Overview: Alliance Resource Partners (ARLP) announced the acquisition of certain general partner and limited partner interests in AllDale Minerals III and IV for approximately $206.2 million, with a total transaction valuation of about $410 million, expected to close in July 2026, significantly enhancing ARLP's market position in the minerals sector.
- Increased Economic Interest: Following the acquisition, ARLP's economic interest in AllDale III and IV will rise from approximately 5% to 61%, and through a wholly owned subsidiary, ARLP will fully control the general partner interests, further solidifying its strategic positioning in the oil and gas sector.
- Production Capacity Enhancement: AllDale III and IV hold approximately 48,500 net royalty acres, which is expected to increase ARLP's average daily production capacity from about 5,940 BOE to 17,295 BOE, significantly boosting its competitiveness in key oil and gas basins.
- Financial Benefits Expected: The acquisition is anticipated to be immediately accretive to ARLP's free cash flow per unit and will be funded through a combination of cash, credit, and new debt financing, maintaining a pro forma total leverage below 1.0x to ensure liquidity for future growth.
See More
The Potential and Challenges of Coal's Revival
- Surging Market Demand: Babcock & Wilcox (B & W) currently holds a $2.7 billion backlog, with $2.4 billion stemming from its partnership with Applied Digital, indicating a robust growth in power demand driven by the data center boom, which may lead to a revival of coal.
- Significant Stock Performance: B & W's stock has surged 244% over the past year, rising from below $1 to $21, reflecting optimistic market expectations for its future growth potential, despite facing controversies related to Applied Digital.
- Policy Support for Coal: President Trump and the Energy Secretary are actively working to prevent the closure of coal plants, viewing coal as a vital national security resource, which could provide new business opportunities for companies like B & W, despite ongoing environmental concerns.
- Changing Competitive Landscape: B & W possesses unique capabilities in building natural gas power plants, and with GE Vernova currently at capacity, B & W's expansion potential may position it favorably in the future energy market, particularly in the combined use of coal and natural gas.
See More
Magnolia Group Sells 1.17 Million Shares of Alliance Resource Partners
- Share Sale Overview: On April 24, 2026, Magnolia Group disclosed the sale of 1,170,437 shares of Alliance Resource Partners, with an estimated transaction value of $30.30 million, indicating a strategic adjustment in their coal market investments.
- Asset Management Changes: This transaction resulted in Magnolia's 13F reportable assets under management (AUM) decreasing from $606.51 million to $537.51 million, an 11.4% drop, highlighting a significant portfolio reconfiguration.
- Holding Proportion Adjustment: Magnolia's stake in ARLP was reduced from 2,581,697 shares to 1,411,260 shares, a decrease of approximately 45%, making ARLP account for 7.26% of its portfolio, reflecting diminished confidence in this asset.
- Market Performance Comparison: As of April 23, 2026, ARLP shares were priced at $25.23, up 2.4% year-over-year, but underperformed the S&P 500 by 29.88 percentage points, indicating a cautious market sentiment towards the coal industry.
See More
