Anthracite Mining

SIC 1231

Companies in this industry

Industry report:

This category covers establishments primarily engaged in producing anthracite or in developing anthracite mines. All establishments in the United States that are classified in this industry are located in Pennsylvania. This industry includes mining by owners or lessees, or by establishments that have complete responsibility for operating anthracite mines for others on a contract or fee basis. Also included are anthracite preparation plants, whether or not operated in conjunction with a mine.

Industry Snapshot

Anthracite is a hard coal containing a high percentage of fixed carbon and a low percentage of volatile matter, such as sulfur and ash. It contains more than 90 percent fixed carbon, less than five percent volatile matter (gases), and a very small percentage of moisture (usually less than five percent). With these qualities, anthracite coal is ranked higher than other, more commonly used coals like bituminous and lignite because it has more than twice the energy content of these other coals. Thus, it provides a longer burning potential and is, accordingly, a higher-energy fuel. Almost all the U.S. supply of anthracite coal is located in eastern Pennsylvania and is often referred to as Pennsylvania anthracite.

Most of the original markets for anthracite were relinquished long ago to natural gas, fuel oil, and other coals, such as bituminous and lignite. Anthracite maintains a small share of a niche market, consisting primarily of coal-fired home-heating units. In fact, anthracite mining has been declining steadily for many years, from peak production in 1918, when anthracite mines produced 99.6 million short tons.

In 2008, 14 anthracite mines were in operation in the United States, down from 31 in 2001. Anthracite demand remained relatively steady throughout the mid-to late 2000s, from 1.6 million short tons in 2005 to 1.7 million short tons in 2008. The price per short ton of anthracite averaged $60.76 that year.

According to the U.S. Department of Labor, a total of 115 miners worked in the underground mines in 2008, down compared to 130 in 2006. Surface mines employed 587 miners in 2008, up compared to 533 miners in 2006.

Organization and Structure

Both surface and underground methods were used in the extraction of anthracite. Surface mining is usually practiced on relatively flat ground; the coal is recovered from a depth of less than 200 feet. To reach coal deposits, miners must first remove the overburden, or strata, that covers the coal bed. Between one and 30 cubic yards of strata must be excavated for each ton of coal recovered. Dragline excavators, power shovels, bulldozers, front-end loaders, scrapers, and other heavy pieces of equipment are used to move the strata and extract the coal.

The two common methods of surface mining are strip and auger. At strip mines, large drills bore holes in the strata. Explosives are detonated in these cavities. Power shovels or draglines operating at surface level then move the broken strata, while power shovels below dig up the coal and load it into trucks. The strata and coal are removed in long strips. This is done so the debris from the newest strip can be dumped into an adjacent strip, from which the coal has already been recovered.

Auger mining consists of boring a series of holes that are two feet to five feet in diameter and 300 or more feet deep. This parallel and horizontal pattern is carved into a seam of coal that has already been exposed by an outcropping or by strip-mining methods. No blasting takes place, and the overburden is left intact. The coal is simply removed and loaded into waiting trucks. Auger mining is frequently used in open-pit mines, where the strata is too thick to remove the coal economically using strip methods.

Underground mines consist of a series of parallel and interconnecting tunnels from which the coal is cut and removed with special machinery. The process is complex and sometimes dangerous. The mine must be adequately ventilated to protect miners from dust and explosive methane gas that is released by the coal. In addition, careful ground control must be practiced to prevent the roof of the mine from collapsing on workers and equipment.

Three types of underground operations are distinguished by the method used to access the coal mine. Drift mines are characterized by the use of a level tunnel leading into the mine, while slope mines have an inclined tunnel, and shaft mines utilize a vertical tunnel. The primary methods of extracting coal from all mines are room-and-pillar, longwall, and shortwall, but no anthracite mines used longwall systems.

Room-and-pillar mining is often the least efficient method. It allows recovery of only about 50 percent of the coal, although there are occasions when this methodology can achieve a much greater recovery percentage. In comparison, longwall and shortwall mining extract up to 80 percent of the usable coal. In a room-and-pillar operation, coal is mined in a series of rooms cut into the coalbed. Pillars of unmined coal are left intact, and serve to support the mine roof as miners advance through the coal seam. Sometimes the coal in the pillars can be extracted later in the "retreat" phase.

The two basic types of room-and-pillar mining are conventional and continuous. Conventional mining consists of a series of operations that involve cutting and breaking up the coalbed, blasting the bed, then removing the shattered coal. Continuous mining, on the other hand, uses a machine that digs and loads coal in one operation, without blasting.

Longwall and shortwall mines use huge machines with cutting heads. The heads are pulled back and forth across a block of coal up to about 150 feet long in shortwall mining, though much longer in longwall. Coal is sheared and plowed into slices that are removed by a conveyor. Movable roof supports allow mined-out areas to cave in behind the advancing machine.

Anthracite reserves were estimated at more than seven billion short tons in Pennsylvania in 1990, with smaller amounts (less than 300 short tons) existing in Colorado, Virginia, Arkansas, and New Mexico. By far the greatest concentration of anthracite reserves were in several counties in northeastern Pennsylvania, specifically Lackawanna, Luzerne, Carbon, Columbia, Northumberland, Dauphin, Schuylkill, and Lebanon, with more than one-third of the reserves lying in Schuylkill County.

Background and Development

The history of anthracite mining in the United States dates back to before the industrialization of the country, when material needs were largely met through subsistence agriculture, and craft-type production methods dominated the economy. The shift to an economy dominated by factory production was accompanied by growth in anthracite mining, providing a striking case study of the origins of industry in the United States. Historian Alfred Chandler argued that anthracite was a primary factor in facilitating factory production methods in the northeastern United States, suggesting that anthracite mining played a key role in the timing and pattern of economic development in the United States during the mid- to late 1800s.

Well before it was mined for profit, anthracite was discovered by Native Americans near Nazareth, Pennsylvania, around 1750. By the 1790s, settlers began exploring the possibility of using anthracite for commercial and industrial purposes.

During the Revolutionary War, anthracite was burned in forges for the production of weapons. When the war ended, the population of the country was less than four million, and most of the output of the country was agricultural. A profitable market for anthracite would emerge, as merchants sought higher levels of profitability, bringing forth factory production methods and a rise in demand for mineral production.

One impediment to coal production was the lack of transportation infrastructure, which made the cost of getting coal to market prohibitive. Part of the rise of anthracite production can thus be tied to the construction of canal and railway systems, which lowered the cost of transportation. By the War of 1812, demand for coal by the government led to shortages in Baltimore, Philadelphia, and New York, which hastened the decision to develop additional anthracite sources.

Much of the early mining was undertaken by small-scale entrepreneurs. Development would be intertwined with the development of extensive canal systems constructed in the 1820s and 1830s, and later the railroad, eventually leading to the union of the most successful anthracite firms with railroad companies.

The development of canal systems between 1815 and 1834 enabled coal to reach expanding textile markets on the East Coast. In fact, between 1815 and 1834, $10 million was spent by government and private interests to construct canals to bring anthracite deposits of northeast Pennsylvania to the Atlantic seaboard, thereby providing a way for a cheap fuel to reach expanding markets. The Erie Canal, the Delaware Canal, and the Hudson Canal were all developed specifically for the purpose of allowing growing anthracite companies like the Lehigh Coal and Navigation Company and the Schuylkill Navigation Company to haul anthracite.

The Industrial Revolution.
As the industry advanced, early mining methods were rapidly replaced by more machine-intensive methods of production, which raised productivity and reduced labor time. Mines became much more productive, but mining accidents increased, leading to many worker casualties from explosions, fires, floods, and collapsing ceilings and walls. Consequently, workers began organizing to fight against increasingly intolerable work conditions.

From the 1830s to the 1870s, Pennsylvania produced more anthracite than bituminous coal. Anthracite had specific applications in steel production and was the most used of all types of coal at the time. By the early 1860s, anthracite fueled booming iron production in Pennsylvania and became a primary fuel for the textile industry in New England. The boom years of 1863 and 1864 in the northeastern United States were driven by the need for blankets, firearms, and other goods needed for carrying through with the Civil War. Other contributing factors during this period were tariffs placed on imported manufactured goods and the creation of a national currency and a national banking system.

With the increasing growth of the railroad industry, the demand for pig iron and iron production rose as well, which meant more anthracite coal was needed. Total coal production leaped from just less than 17 million tons in 1861 to nearly 72 million tons in 1880. At this time, competition in the highly profitable anthracite industry was fierce. Not only were many capitalists entering the industry to take advantage of the higher-than-average profit rates and low wages, but firms were also guaranteed a relatively controlled workforce.

Labor Disputes.
At this time, the federal government was fostering manufacturing activity but was hardly a friend of labor in the Pennsylvania anthracite mines. With the industry expanding vigorously in the post-Civil War boom era, miners were being pushed to their physical limits for very low wages. Paid low piece-wages while working long hours under extremely hazardous conditions, miners also had to pay exorbitant prices at company-owned stores. In addition, 600 workers had died in mining accidents in the Pennsylvania mines from 1863 to 1870. As labor organized, the government called in the Army to crush strikes in 1864. Strike leaders were arrested, and martial law was declared in the Pennsylvania coal towns. The miners responded by organizing under the Workingmen's Benevolent Association (WBA). Due partly to fierce competition in the coal industry, which prevented coal owners from uniting against the miners, the WBA was able to forge a unified force of all miners, skilled and unskilled, throughout the industry, as opposed to separate "craft" unions that were the dominant form of labor organization at the time. As a result of this collective action, the WBA, after a bitter six-month strike, won better working conditions, a "sliding scale" wage system by which wages rose or fell according to the market price of coal, and a mining inspection law from the Pennsylvania legislature.

As the country slipped into a prolonged depression in the 1870s, anthracite prices and profits collapsed, and workers struggled to maintain their living standards. A wave of strikes swept the nation in the mid-1870s, with the Long Strike in eastern Pennsylvania standing as one of the most dramatic and important. The conflict plagued eastern Pennsylvania, with many firms using private police forces to infiltrate and suppress unions. The conflict was often violent.

Despite intense competition among mining companies, management's response to the labor movement was much more organized and aggressive this time around. The anthracite mining industry was changing, becoming more concentrated as a result of competition, which engendered far more failing companies than profitable companies. A leading company was Reading Railroad, an anthracite and railroad concern headed by Franklin Gowen, which became the largest coal operator in eastern Pennsylvania. Gowen circled the wagons of other coal operators and took on the WBA.

Responding to a five-month strike in 1874, Gowen stockpiled coal, then shut down his mines in the winter of 1874-1875, inflicting tremendous hardship on the miners and their families. Following a long, violent struggle--with Gowen's private police firing indiscriminately into crowds of workers, and strikers often attacking scab workers and strike breakers with clubs and stones--workers eventually succumbed, conceding a 20 percent wage cut, and returned to work in nonunion mines. Several miners were tried for alleged violent attacks and convicted, despite questions about testimony of security agents for the companies. The union was decimated and would not emerge again until the end of the century, when the United Mine Workers of America (UMWA) came into existence.

The depression dragged on for many years. The UMWA was involved in strikes across the country, including a key strike in Pennsylvania in 1894, but with the union severely weakened from the impact of the prolonged depression, the coal miners lost a battle of attrition.

Many more strikes would rock the industry around the turn of the twentieth century. One major 1901 strike in the anthracite fields of Pennsylvania drew the attention of President Theodore Roosevelt, who, after threatening to order U.S. troops to seize the mines, persuaded the mine owners to settle with the UMWA. Roosevelt had taken on the owners, who were being particularly strident in the struggle, and won support as a populist.

By the end of the nineteenth century, Pennsylvania anthracite was shipped by boat and rail to almost every major city in the country, becoming the most important domestic fuel for industrializing America. By the turn of the century, Luzerne County ranked as the third-most populous county in the state, while Lackawanna County ranked as the fourth-largest. These counties were growing up on coal, a resource that made the region a major commercial center.

Entering the twentieth century, use of anthracite was clearly on the rise, when production reached 57.3 million tons and grew to more than 100 million tons by World War I. Output increased every year in the late nineteenth and early twentieth century, reaching its peak in 1917 when the industry employed more than 150,000 anthracite miners. From 1870 to 1920, more than 50 percent of all hard coal produced came from the northern Pennsylvania fields. Profitability was very high, with mining costs at the point of extraction only 75 cents, while the selling price ranged from $15 to $18. At this time, anthracite was used as a bunker fuel during World War I, but this was less than 20 percent of all end uses. Most anthracite was used as space-heating fuel for industrial, commercial, and residential purposes. In addition, a small portion of anthracite was used for electrical power generation and by the steel industry. Most anthracite was used domestically with little being exported.

The value of anthracite properties was estimated by the U.S. Coal Commission to be almost $1 billion. However, coal costs began to rise, while prices remained constant. Other troubles arose because of changes in steel production. Coke, which has many of the advantages of anthracite but is derived from soft coal, increasingly came into competition with anthracite. The harder anthracite could not compete, primarily because production costs were too high.

To exacerbate the situation, the highly centralized industry also was accused of operating as a monopoly, with a small number of firms regulating pricing and controlling 90 percent of the market. There had been a close connection between the mining and distribution of anthracite and the control of these companies by "anthracite railroads." Suits were brought against the Lehigh Valley and Reading companies.

In 1923, seven large companies owned and controlled an estimated 75 to 80 percent of the mining, transportation, and hauling of anthracite, each of which was controlled by the railroads. The remaining anthracite producers were considered small independent miners who leased coal mines. The large interests were accused of price collusion. The debate raged over whether these large interests should be allowed to operate as railroads, coal miners, or both. Some of the large companies were The Reading Company, Philadelphia and Reading Railroad Company, Philadelphia and Reading Coal and Iron Company, Lehigh Valley Railroad Company, Lehigh Valley Coal Company, and Coxe Brothers Co.

In a ruling similar to the Supreme Court decision that broke up Standard Oil in 1911, the seven large companies were forced to dissolve in accordance with the Sherman Anti-Trust Act. By 1922, profit rates for the industry fell to around 12.1 percent, while the debate on price fixing and regulation continued. Meanwhile, the costs to the smaller independent companies rose as rents charged by landowners increased. With the tendency of coal prices to reflect the cost of the largest company, the price of anthracite rose.

In addition, strike and labor resistance continued to plague the mining industry. Several long and costly strikes occurring after World War I that involved the complete cessation of anthracite production lent support, from the mine owners' perspective, to promoting substitute fuels. Major strikes were carried out during the 1920s and 1930s.

Anthracite production began to decline before the Great Depression. Following the expansion of mining, which came with the high profitability enjoyed during World War I, demand for coal fell, and more cost-efficient oil and natural gas were used. Supply for all types of coal was outrunning demand by two to one, and prices were plummeting, eroding profits. Consequently, production was cut back. Companies were going under, closing some union mines, and labor was severely hurt, with working conditions becoming harsher, wages falling, and the intensity of labor increasing. The UMWA was completely demoralized after a strike in 1927.

Market demand continued to shift away from anthracite and oil, while natural gas became more attractive and more widely distributed. Space-heating applications, which had been a major portion of anthracite consumption at the turn of the century, also declined. Production fell precipitously, from 69.4 million tons in 1930 to 9.7 million tons in 1970. A slight resurgence in the demand for anthracite occurred in the late 1970s because of an increase in home heating units in New England and from a switch to coal as a consequence of rising oil and natural gas prices.

Though it did not lead to a major rejuvenation of the industry, one of the salvations for anthracite producers in the 1970s was the use of anthracite for space-heating purposes in U.S. military installations overseas. The Defense Department's space-heating equipment, originally designed to burn coke, accommodated only anthracite rather than bituminous coal.

The 1980s saw a brief surge in the demand for anthracite, primarily because of a rise in the purchase of coal stoves as homeowners sought alternatives to rising oil and natural gas prices. But the industry had trouble meeting the demand because of its inflexibility, leading to huge price increases. The industry tried to remedy this by increasing mining capacity to ensure protection of its key market, the residential space-heating market. By this time anthracite made up less than one percent of the coal market. In 1977, the federal government gave brief attention to the industry, forming the Anthracite Task Force and the Office of Anthracite within the U.S. Department of Energy. This was more appearance than action, however, as very little federal assistance was forthcoming.

The anthracite coal-mining industry remained in a basically stagnant condition in the mid-1990s. The number of operating mines fell by 24 percent and the number of miners by about eight percent. Productivity per miner increased during this same period, but was still well below that of bituminous miners. Expressed in 1997 dollars, the price for anthracite averaged $31.24 per ton, while the average price for all U.S. coal was $16.14.

The outlook for real growth in the industry was grim. With the market for anthracite flat, there was little incentive for mining companies to open new mines or install production-enhancing technology such as longwall systems. The anthracite coal industry has not recovered from its long decline. Production amounts in 2002 were one-fourth 1999 levels, which stood at 4.8 million short tons. The number of workers employed in surface mining of anthracite fell from 980 in 2000 to 683 in 2001, a decrease of more than 30 percent. Over the same period, the number of workers at underground anthracite mines declined by nearly seven percent. The price per ton of anthracite rose from $23.33 in 2000 to $25.07 in 2001.

During 2003, Pennsylvania mined some 1.14 million short tons of anthracite coal from 29 mines. Even though the number of mines declined, production increased to 1.7 million short tons in 2004. Despite the growth, anthracite coal miners continued to struggle. Pennsylvania has some seven billion tons of recoverable coal. However, Schuylkill County, the leading producer of anthracite coal, was rationing its reserves in the winter of 2004. Federal violations issued by the U.S. Mine Safety and Health Administration between 2000 to 2003 increased 60 percent. Consequently, these violations forced many additional underground miners of anthracite coal out of business. Miners blamed the federal mine inspectors for not understanding the difference between extraction of anthracite coal versus bituminous coal.

While focusing on PCI technology and the thriving international steelmaking industry, the future anthracite coal was promising. According to CoalTrans International in 2004, "There are signs of increased interest from a wider international market." The average open market sales price per short ton of anthracite was $43.61 in 2006. Leading anthracite mining firms in the United States in the late 2000s included Bradford Coal Company, Anthracite Industries, Inc., and Reading Anthracite.

Current Conditions

Following the global economic crisis and subsequent industrial slowdown, U.S. exported anthracite came to an abrupt standstill in 2009. However, China's appetite for steel put the anthracite industry on the path of a strong resurgence in 2010, which the industry had not witnessed since 2004. In fact, China had become the world's major producer and exporter of anthracite coal, already accounting for about two-thirds of world production.

According to Kobin Coal Corp., a coal brokerage firm based in Long Island, New York, anthracite exports went from no tons in 2009 to 20 tons during the first half of 2010. Reasons for the increased demand were that China's anthracite coal mines were not able to keep up with need as steel production picked up pace, and Vietnam, a major supplier to China, wanted to keep its anthracite coal for its own energy sources.

Anthracite production was down in 2010 but output was up, to 1.9 million tons by July that year. Production was centered in Schuylkill and Northumberland counties. The U.S. Department of Commerce data showed U.S. metallurgical coal exports reached $3.2 billion through the first five months of 2010. China alone imported 920,016 tons of U.S. metallurgical coal during the first-quarter of 2010, an increase of 42 percent over the previous year.

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