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Incremental Advances in Technology Help Coal Miners Hold Costs Down

As it does every month, this edition of Coal Age offers a little something for everyone. In this month’s cover story, Lee Buchsbaum frames North Dakota lignite miners in a very pretty picture. Next time, we will send him there in January and see how the story compares. Joking aside, the surface mines in that region are some of the most productive mines in the country and the power plants they feed are some of the cleanest. They have a long-term captive relationship that insulates them to a certain degree from the market swings created by the economic downturn.

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U.S. Coal Operators Face Trying Times

A coal miner’s disposition has a huge impact on how they view the world. If they are working at a surface mine in central Appalachia (CAPP) these days, they probably feel like an endangered species. Likewise, if they were working with a company that rallied on high spot prices with large uncommitted coal positions last year, they might be discouraged by the current soft market conditions. Those working for coal companies with mine permits, long-term supply agreements, and good reserves, are probably feeling fairly secure, albeit guarded optimism.

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Supreme Court Decision Draws National Attention to West Virginia Politics

During early June, the U.S. Supreme Court ruled that Chief  Justice Brent Benjamin, West Virginia Supreme Court of Appeals, who accepted a $3 million campaign contribution from Massey Energy CEO Don Blankenship, should have removed himself from a lawsuit involving Massey. In its ruling, the court was careful not to accuse Benjamin of bias or Blankenship of wrongdoing, but it did cast the spotlight on politics in coal country.

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The Alpha Deal Could Unleash More M&A Activity in the East

The big story this month is the news that Alpha Natural Resources intends to purchase Foundation Coal. The coal business in the eastern U.S. can best be described as a fragmented group of small- and medium-sized coal operators. With a total production of 23.5 million tons from 34 underground mines and 27 surface mines, Alpha was symbolic of the Central Appalachian (CAPP) market. The company is primarily a metallurgical coal operator. The two strikes here are met coal in a down steel market and the permitting problems now associated with eastern U.S. surface mining. Many of the analysts covering the coal market say the merger would help mitigate the effect of “CAPP surface mining exposure,” which is more than 40% of Alpha’s current production mix.

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Before Obama’s Team Can Move Forward, They Will Need to Undo the Bush Legacy

As the Obama administration gets its sea legs under it, many in the coal industry can’t help but wonder what impact it will have on them. This month for the first time, the new administration started to actively engage the coal mining business. The new leadership at the Environmental Protection Agency (EPA) voiced its opinion on mountaintop mining (See News, p. 8 and Dateline Washington, p.16). Also this month, Coal Age exposes some of the nasty internal politics that took place at the Department of Energy (DoE) over the FutureGen project (See FutureGen, p. 46). Meanwhile, everyone is waiting to see who President Obama will appoint to head the Mine Safety and Health Administration (MSHA).

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