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King Coal Rebounds in West Virginia as Markets Improve

Published: November 15, 2017 |

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The numbers show that coal is rebounding in West Virginia, especially in the southern counties, but Christy Laxton doesn’t need numbers to know that.

“The physical signs are starting to show with the increase in coal truck and rail activity,” said Laxton, executive director of the Wyoming County Economic Development Authority.

“The folks in Wyoming County are a little more hopeful. There are several businesses that are hiring people that had been laid off or hiring new people to fill their orders. More coal miners are working, and the coal miners that are working are not as concerned about being laid off.”

Laxton said her brother is a miner. He was laid off from one job and had to take another one nearly two hours from his home. He has since been able to find work closer to home, she said.

According to the federal Energy Information Administration, West Virginia mines produced about 23 percent more coal in the first half of this year than last year. Production at mines in the northern part of the state was up 18.6 percent, while production in the southern counties increased by 29 percent.

People in the industry say the increase is in part due to increased exports, both for thermal coal, which is used to generate electricity, and for metallurgical, or met coal, which is used to make steel.

In its third-quarter earnings report, Arch Coal, which operates the Leer mine near Grafton and the Mountain Laurel mine near Sharples, said demand and pricing for seaborne coking coal remain healthy, even with the ongoing recovery of Australian exports following Cyclone Debbie and modest supply growth elsewhere. The cyclone in Australia knocked out some production there, allowing U.S. coal to move into markets that Australian producers had dominated.

Arch said it believes the outlook for global metallurgical markets is attractive “given buoyant steel markets, strong Chinese manufacturing activity, an improving economic outlook in other key countries, and the high cost structure of much of the recently added coking coal supply.”

Bill Raney, president of the West Virginia Coal Association, said the production increase in West Virginia is spread throughout the state.

“Everybody’s attitude’s a lot better. When you have a guy in the White House who appreciates what you do, it’s better than having a guy that fights you every step of the way,” he said.

The use of coal in electricity generation is down nationwide as older coal-burning plants are retired and low-cost natural gas takes market share from coal. In West Virginia, coal still dominates electric power generation. According to preliminary data compiled by the EIA, in the 12 months that ended in August, coal accounted for about 94 percent of electricity generated in West Virginia. Wind was 2.2 percent, hydropower was 2 percent and natural gas was 1.8 percent.

The rebound in coal has helped West Virginia’s severance tax collections. For the first four months of this fiscal year, the state collected $80.2 million in severance taxes, up 68 percent from $47.9 million in the same period last year, according to the state Budget Office.

October collections alone were up 153 percent over October 2016, from $9.6 million last year to $24.3 million this year.

On the other side of the rise in coal production, however, has been the rise in coal mining fatalities in West Virginia this year. According to the Mine Safety and Health Administration, the state has had seven mining fatalities this year, up from three last year and two in 2015. West Virginia’s seven mining fatalities are half the national total of 14.

Source: The Exponent Telegram


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