Published: December 19, 2014 |

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This is the first in a series looking at the state of the coal industry as it deals with increasing regulations and a changing market.

George Sidney, president and chief operating officer for McLanahan Corp., was strolling through his company’s facilities in Hollidaysburg recently when he came upon an empty manufacturing space. 

At one time, three to four workers would spend two to three shifts a day refurbishing segments — pieces of equipment inside coal crushers that experience wear after heavy use. But companies aren’t using segments like they used to and Mr. Sidney thinks recent and impending federal regulations on emissions from coal-burning power plants have been a factor.

The vacant workspace, he said, showed the “dramatic effect that this policymaking has had.” 

“It’s a trickle-down effect like I’ve not seen ever before,” said Mr. Sidney. “It goes beyond just the coal mining industry. It touches all aspects of mining in general.”

Less than a decade ago, 80 percent of the mine supply company’s business served U.S. coal mines with equipment such as crushers that break up the coal and feeders that transport it evenly on a conveyor belt. Today, Mr. Sidney estimated 70 percent of McLanahan’s business comes from clients abroad.

Even as images of shuttered U.S. coal mines — and the power plants they supply — are being invoked by those who decry a “war on coal,” many of the companies that provide them with equipment and services have been quietly shifting operations abroad or to other industries.

U.S. exports in mining machinery — a category that includes equipment for mining minerals other than coal — totaled nearly $22 billion from 2010 through September 2014, according to the U.S. Census data. That’s $5 billion more than the previous 10 years combined. 

Exports grew significantly from 2009 to 2012, and continue to feed markets in India, Australia and Latin America, said Ryan Russell, a senior international trade specialist based in Pittsburgh at the U.S. Commercial Service.

The service, an arm of the U.S. Department of Commerce, helps businesses connect with foreign demand. It has field offices in other countries that “know the local market, know the local players, know what the opportunities are” and help companies set up at local trade shows. 

Mr. Russell recalled a mining equipment trade show in Santiago, Chile, at which U.S. companies comprised the biggest group.

“I think that’s strong sign of the level of interest” from U.S. mining machinery companies, he said. “There are a number of countries for which the mining equipment and supply sector is an emerging export opportunity.”

There’s little doubt that Pennsylvania companies have expanded their reach abroad.

McLanahan has opened two offices in Australia, one in the United Kingdom and one in “very mining-friendly” India. Jennmar Corp., a Pittsburgh company that manufactures ground control technology for the mining, tunneling and civil construction industries, boasts a global portfolio that includes 19 facilities in 10 countries, as well as operations in West Virginia, Virginia, Kentucky and Utah.

Mr. Sidney emphasized, however, that the movement abroad was not entirely voluntary.

“It’s just a shame that where we’ve been doing all our investing is off-shore,” he said. But, “We needed to change our business model here in a hurry.”

Pennsylvania’s mining services and equipment industry has been increasingly focused on the politics of the issue, based on its contributions to members of Congress that outspent mining companies 5-to-1 in the most recent election cycle, according to an analysis of data collected by the Center for Responsive Politics.

Mining services companies gave the most — 41 percent — to congressional campaign committees out of any industry in the state’s energy and natural resources sector, the data show.

This is a dramatic flip from the 2004 election cycle, when coal mining industry in the state gave about $15 for every one dollar spent by services and equipment. 

The Calandras family, Jennmar’s founders, gave politicians at least $206,000, or nearly 40 percent all contributions from Pennsylvania mining services companies in 2014. Members of the family declined requests for interviews for this story.

In October, then-U.S. Senate Minority Leader Mitch McConnell visited a Jennmar facility in Winchester, Ky., where no native coal mining takes place, and slammed government policies that he said affect coal mining’s supporting industries.

“These people are trying to take away our livelihood and they need to be stopped,” Mr. McConnell is quoted by the Winchester Sun as telling the Jennmar employees.

In at least one instance, the boom in hydraulic fracturing used to get a natural gas in regional shale formations has been embraced by McLanahan.

The mine supply company, which also specializes in water purification and control, has recently begun marketing a filtration system to companies in Wisconsin that mine sand for hydraulic fracturing, Mr. Sidney said. Its technology allows sand mine operators to extract the sand without the need for ponds, the construction of which requires a special permit process that can take years.   

“That’s probably the only bright star on the horizon for us domestically,” he said.

—By: Daniel Moore, Pittsburgh Post Gazette