Here's how you know the coal industry is all but dead

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Considering the number of bankruptcies to hit the coal industry over the past few years, there's a certain irony in the crazy rally that has seen coal prices triple in 2016. Yet despite the meteoric rise, the industry is still ailing, and moves by one heavy equipment maker even suggest it may have a terminal condition.

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A Caterpillar Inc. front loader scoops coal from a mound at the Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, U.S., on Wednesday, Jan. 13, 2016. Arch, the St. Louis-based holder of the second-largest reserve of coal in the U.S., filed for creditor protection Monday, with an agreement to erase $4.5 billion in debt. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coaling towers stand at the Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, U.S., on Wednesday, Jan. 13, 2016. Arch, the St. Louis-based holder of the second-largest reserve of coal in the U.S., filed for creditor protection Monday, with an agreement to erase $4.5 billion in debt. Photographer: Luke Sharrett/Bloomberg via Getty Images
A truck waits to be loaded with coal at the Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, U.S., on Wednesday, Jan. 13, 2016. Arch, the St. Louis-based holder of the second-largest reserve of coal in the U.S., filed for creditor protection Monday, with an agreement to erase $4.5 billion in debt. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coal spills out from a tower into a large pile at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coal spills out from a tower into a large pile at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coal sits in a pile at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
Signage stands outside an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
PRINTER, KY - JUNE 3: CSX Transportation coal trains sit in a rail yard on June 3, 2014 in Printer, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
CATTLETSBURG, KY - JUNE 3: Caterpillar front-loading machinery operates on mounds of coal at Arch Coal Terminals June 3, 2014 in Cattletsburg, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
SHELBIANA, KY - JUNE 3: A bulldozer operates atop a coal mound at the CCI Energy Slones Branch Terminal June 3, 2014 in Shelbiana, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
CATTLETSBURG, KY - JUNE 3: A tractor trailer drives by a mound of coal after delivering a truckload of coal to Arch Coal Terminals June 3, 2014 in Cattletsburg, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
PRINTER, KY - JUNE 3: A road leads past a coal train sitting alongside the Blackhawk Mining, LLC Spurlock Prep Plant on June 3, 2014 in Printer, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
Coal is dropped from a conveyer belt into a pile at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency outside Price, Utah Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to call cars on trains for transport to power generation facilities. Photographer:George Frey/Bloomberg via Getty Images News
Coal is transported by rail after being loaded at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency, outside Price, Utah, U.S., on Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to railcars for transport to power generation facilities. Photographer: George Frey/Bloomberg via Getty Images
A Caterpillar earth mover moves piles of coal at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency, outside Price, Utah, U.S., on Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to railcars for transport to power generation facilities. Photographer: George Frey/Bloomberg via Getty Images
A Caterpillar earth mover moves piles of coal at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency, outside Price, Utah, U.S., on Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to railcars for transport to power generation facilities. Photographer: George Frey/Bloomberg via Getty Images
Loaded Norfolk Southern coal trains sit before being unloaded at Lambert's Point Coal Terminal in Norfolk, Virginia, U.S., on Tuesday, Nov. 26, 2013. In 2011, coal was used to generate 30.3 percent of the world's primary energy, the highest level since 1969, according to the World Coal Association, an industry trade group. That share slipped only to 29.9 percent last year. Photographer: Luke Sharrett/Bloomberg via Getty Images
The Kentucky Mine Supply Company building stands in Harlan, Kentucky, U.S., on Tuesday, Nov. 5, 2013. In 2011, coal was used to generate 30.3 percent of the world's primary energy, the highest level since 1969, according to the World Coal Association, an industry trade group. That share slipped only to 29.9 percent last year. Photographer: Luke Sharett/Bloomberg via Getty Images
A CSX Corp. coal hopper car sits beside a Harlan County coal tipple in Totz, Kentucky, U.S., on Wednesday, Nov. 6, 2013. In 2011, coal was used to generate 30.3 percent of the world's primary energy, the highest level since 1969, according to the World Coal Association, an industry trade group. That share slipped only to 29.9 percent last year. Photographer: Luke Sharett/Bloomberg via Getty Images
Deckhands aboard the Consol Energy Champion Coal tow boat walk along the center of the barges on the Monongahela River, during transport outside Pittsburgh, Pennsylvania, U.S., on Wednesday, May 15, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
Coal sits inside a barge during transport down the Monongahela River by the Consol Energy Champion Coal tow boat outside Pittsburgh, Pennsylvania, U.S, on Wednesday, May 15, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
A coal miner shines his head lamp on coal transported on a conveyor belt after being sheared off the wall during longwall mining operations at the Consol Energy Bailey Mine in Wind Ridge, Pennsylvania, U.S., on Tuesday, May 14, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
Coal miners walk through a tunnel at the Consol Energy Bailey Mine in Wind Ridge, Pennsylvania, U.S., on Tuesday, May 14, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
A coal miner stands in a crevice to avoid a transport car at the Consol Energy Bailey Mine in Wind Ridge, Pennsylvania, U.S., on Tuesday, May 14, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
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China, the linchpin as always

There's been something of a hidden campaign by China to prop up its coal industry. Goldman Sachs analysts say it has imposed production restrictions as a means of effecting a "stealth" bailout of the industry and its creditors, who might otherwise be jeopardized if the coal companies couldn't service their debt. By limiting production, it's helped drive the price of coal higher, and it sees the "bailout" lasting until at least 2020.

Bloomberg Markets says China's coal production tumbled after the government ordered miners to reduce output to the equivalent of 276 days of production, down from the previous level of 330 days. It notes that output fell 10.5% through September.

Prices have soared in response. Seaborne prices for thermal coal are running around $97 per tonne, while metallurgical coal has surged to around $250 per tonne, some three times higher than what it went for a year ago.

In addition to mine closures, new trucking regulations have created delivery backlogs that have caused transportation prices to rise accordingly.

Still, the rally has allowed Beijing to relax some of its restrictions to help meet winter demand while also encouraging mines currently under construction to complete their work and begin production.

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Photos show dirty truth behind coal mining
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Photos show dirty truth behind coal mining

Coal use in China, one of the world's largest consumers, fell two percentage points in 2015, but was still 64% of the country's energy sources. Here a villager selects coal near a mine on the outskirts of Jixi, in Heilongjiang province, China.

Source: The Guardian

(Photo via REUTERS/Jason Lee)

Coal consumption in the EU was flat last year, after declining in 2014. Below, miners leave after working the final shift at Kellingley Colliery in December 2015. Kellingley was the last deep coal mine to close in England, bringing to an end centuries of coal mining in Britain.

Source: Associated Press 

(Photo via REUTERS/Oli Scarff/Pool)

Miners working about 1,640 feet underground at the Boleslaw Smialy coal mine, a unit of the coal miner Kompania Weglowa, in Laziska Gorne, Silesia, southern Poland, on September 11.

(Photo via REUTERS/Kacper Pempel/Files)

Coal miners breaking their fast during the holy month of Ramadan, 2,427 feet deep inside the Stara Jama coal mine, in Zenica, Bosnia and Herzegovina, on July 15.

(Photo via REUTERS/Dado Ruvic)

Twelve-year-old Abdul Kayum from Assam pauses for a portrait while working at a coal depot carrying coal to be crushed on April 15, 2011, near Lad Rymbai, in the district of Jaintia Hills, India.

(Photo by Daniel Berehulak/Getty Images)

A miner waiting for a bus after leaving the Zasyadko coal mine in Donetsk, Ukraine, on March 4, 2015. Dozens of miners were trapped underground after a blast at the coal mine in the eastern Ukrainian rebel stronghold of Donetsk; 33 miners were killed.

Source: CNN

(Photo via REUTERS/Baz Ratner)

Miners in 2014 preparing for their final working day at Hungary's last hard coal deep-cast mine at Markushegy. The underground mine, west of the capital city Budapest, stopped producing coal at the end of 2014, in line with a EU effort to shut down uncompetitive hard coal mines.

Source: Reuters

(Photo via REUTERS/Laszlo Balogh)

A laborer taking a break at a coal-dump site outside Mazar-i-Sharif, Afghanistan, in 2014.

(Photo via REUTERS/Anil Usyan)

Miner Mohammad Ismail, 25, digging in a coal mine in Choa Saidan Shah, Punjab province, Pakistan, in 2014.

(Photo via REUTERS/Sara Farid)

Workers at this mine in Choa Saidan Shah in Pakistan dig coal with pick axes, break it up, and load it onto donkeys to be transported to the surface.

(Photo via REUTERS/Sara Farid)

All in all, global demand for coal has stalled for the first time since the 1990s, according to the International Energy Agency, which expects coal's share of global power generation to fall from 41% now to 37% by 2020, even as use rises in India and Southeast Asia. Here, a worker carries a container filled with drinking water at a railway coal yard on the outskirts of the western Indian city of Ahmedabad.

Source: Associated Press

(Photo via REUTERS/Amit Dave)

Hundreds of coal-powered plants are slated for retirement in the US, where coal's share of energy generation was 36% in 2015, down from 50% 10 years prior. Here, coal miners enter a mine for the start of an afternoon shift near Gilbert, West Virginia.

Source: Bloomberg

(Photo via REUTERS/Robert Galbraith)

Workers unload coal from a truck into a stock field in Cigading harbour in Cilegon, Banten province, in 2010. Domestic coal consumption has risen in Indonesia in recent years, jumping 15% to 87.43 million metric tons in 2015.

(Photo via REUTERS/Dadang Tri)

Steve Torgersen, a Norwegian mining expert, showing the size of a fossil footprint of a hippopotamus-like creature, a pantodont, on the roof of a coal mine on the Norwegian Arctic island of Spitsbergen in 2007.

(Photo via REUTERS/Francois Lenoir)

A coal miner registering the quantity of coal produced by each miner on an improvised chalkboard inside an artisanal mine, or "pocito," at the town of Nueva Rosita, Mexico, in 2008. The mines, called "pocitos," or "little holes," are known for their rudimentary and often dangerous mining techniques.

(Photo via REUTERS/Tomas Bravo)

Rescuers carrying a miner who sustained injuries after a mine explosion to an ambulance in Soma, a district in Turkey's western province of Manisa, about 75 miles northeast of the Aegean coastal city of Izmir, in 2014. In Turkey's worst mining disaster in decades, "a fire broke out [and] one of the pits was engulfed with carbon monoxide. It was Turkey's worst ever industrial accident: 301 miners died, some burnt alive, others suffocating," according to the BBC.

Source: BBC

(Photo via REUTERS/ Osman Orsal)

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The new abnormal

The price surge isn't expected to see other miners jump-start currently idled projects. Teck Resources(NYSE: TCK), the largest product of met coal in North America, said on its third-quarter earnings conference call that although conditions could see prices remain elevated, this was not some "new normal" for coal. CEO Don Lindsay said on the call, "The management teams will typically not make any significant investment decisions based on a few weeks of prices."

That could be why one heavy equipment maker figures now is the time to get out of supplying the coal mining industry with its specialized equipment. Delivering its own quarterly earnings report last week, Caterpillar(NYSE: CAT) reiterated that as part of the major restructuring and consolidation of its operations it has been engineering over the past year, it was looking to sell its room and pillar equipment.

Room Pillar Mining Coal Joy Global

While Caterpillar may want to sell off its room and pillar mining equipment, there may be others willing to sell into the industry. Image source: Joy Global.

A strategic exit from the market

Room and pillar mining is fairly unique to the coal industry and is the process by which material is extracted in horizontal sections, the "rooms," that leave a series of columns, or "pillars" holding up the structure.

While also used in iron and copper mining, it is especially prevalent in the U.S. Appalachian coal industry, and Caterpillar's decision to exit the market -- it also says it's contemplating just shutting down the manufacturing facility -- indicates it believes there's little room for profitable growth here.

Caterpillar first announced its intent to pursue strategic alternative for the division back in August, saying divesting the business "will allow us to focus resources on those areas of the business that provide the highest sustainable growth and best long-term returns." It's also stopped taking orders for new equipment.

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NTP: Coal losing its grip in West Virginia
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Making the hard decisions

The heavy equipment maker says it still sees mining "as an attractive long-term industry," both above and underground, but it's obviously prioritizing which industries are best. Shedding the room and pillar business means coal mining is not one of them.

Arch Coal may have risen from the ashes of bankruptcy to trade once more on the New York Stock Exchange and, unburdened by its massive debt, may be able to operate more efficiently than it did previously, but the coal industry is on the decline, and Caterpillar's decision may see its end coming sooner rather than later.

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NTP: Future of coal, China climate change
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