Bituminous Coal Underground Mining

SIC 1222

Companies in this industry

Industry report:

This classification includes establishments primarily engaged in producing bituminous coal in underground mines or in developing bituminous coal underground mines. This industry includes underground mining by owners or lessees or by establishments that have complete responsibility for operating bituminous coal underground mines for others on a contract or fee basis. Bituminous coal preparation plants performing such activities as cleaning, crushing, screening, or sizing are included if operated in conjunction with a mine. Independent bituminous coal preparation plants are classified in SIC 1221: Bituminous Coal and Lignite Surface Mining.

Industry Snapshot

In 2008 there were 606 underground coal mines in the United States, which produced 357 million short tons of coal. Kentucky led the nation with a reported 216 underground mines in 2008 falling to 198 in 2009 with production totaling 63.1 million short tons. Based on production, West Virginia with 170 underground mining operations constituted 80.8 million short tons of the total 332.0 million short tons in 2009, surpassing Kentucky. Additional top underground coal-mining states were Pennsylvania with coal production of 48.6 million short tons; Illinois produced 28.4 million short tons; Colorado with 22.1 million short tons; and Utah produced 21.7 million short tons.

Including surface mines, U.S. coal production totaled 1.14 billion short tons in 2007, increasing to 1.17 billion short tons of coal in 2008. In 2009 production of coal plummeted to 1.07 billion short tons.

In 2006 there were 612 underground coal mines in the United States, which produced 359 million short tons of coal. Of total U.S. coal mines--underground and surface--43 percent were underground mines, which contributed 31 percent of all coal. Kentucky has the most underground mines in the United States with 227, but West Virginia leads the nation in underground coal-mining production with 84.6 million short tons from its 174 mines in 2006 to top Kentucky's 73.2 million short tons. Other leading underground coaling states include Pennsylvania (54 underground mines, 53.8 million short tons), and Virginia (76 mines, 18.7 million short tons).

Despite its large size and its importance to energy and industrial markets, the U.S. underground coal-mining industry is in some fundamental ways a troubled one. Difficulties first manifested themselves in the late 1960s and have continued unabated into the 2000s. A primary threat to industry participants has been the rapid proliferation of relatively efficient surface mines. Other detriments include increasing environmental constraints, labor problems, stagnant growth, and foreign competition.

Additionally, safety concerns of underground mines continue to be an issue. Two separate incidents in January 2006 in West Virginia brought the issue to the forefront and prompted the passage of federal and state legislation requiring improvement in safety in underground mines. A total of 47 miners died in the workplace in 2006, more than double to total of 22 from 2005.

Despite focus on mine safety, yet another tragedy killed 29 miners in West Virginia following an explosion in April 2010.

Organization and Structure

In 1998 there were about 860 underground coal mines in operation. By 2001 that number had declined to 719 underground mines. Underground mines were more prevalent in the East, accounting for 64 percent of production. The majority of these mines were located in the Appalachian region. Surface coal mines were located primarily in the West, with the largest surface mines in the world found in the Powder River Basin, located in Montana and Wyoming. (See SIC 1221: Bituminous Coal Surface Mining).
Steam coal, which represents the large majority of industry output, is most often used to power electric utilities. General industry, such as glass making and cement production, accounts for the next large portion of coal consumption. Metallurgical coal, or coking coal, is used for iron and steel production. Although they are classified as part of the same industry, these three segments differ in their reserve base, production facilities, distribution channels, and marketing requirements.

Besides regional distinctions and differences in mining techniques, underground mines differ in the quality and type of bituminous coal they produce. Eastern underground coal, for instance, is more likely to exhibit coking properties. Coal mined from underground operations in the Northeast typically has a high energy content and contains a widely varying amount of sulfur, a pollutant that is believed to be a major source of acid rain. Eastern Appalachian coal is most likely to have a very high sulfur content, while central Appalachian coal is comparatively low in sulfur. Much of the underground coal mined in the Midwest, such as Illinois Basin coal, is also high in sulfur.

Underground Mining Methods.
Companies engaged in this industry extract coal that lies 200 to 1,000 feet below the earth's surface, though some mines are as deep as 2,000 feet. 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 of these mines are room-and-pillar, long-wall, and shortwall.

Room-and-pillar mining is often the least efficient method. It often allows recovery of only about 50 percent of the coal, although there are occasions when this methodology can achieve a much greater recovery percentage. Long-wall and shortwall mining, in comparison, 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 involves 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. The majority of room-and-pillar coal was extracted using continuous mining in the 1990s.

Long-wall mines use huge machines with cutting heads. The heads are pulled back and forth across a block of coal up to about 600 feet long. 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. By 2003, long-wall systems accounted for over half of all coal mined underground. Shortwall mining is similar to long-wall operations, but the continuous mining machine shears smaller blocks of coal, generally less than 150 feet long.

Background and Development

Bituminous underground coal was created during a 250- to 400-million-year process in which the ocean covered and compressed organic deposits. Low-grade coal material that eventually developed below the ocean floor was further compacted into higher-grade bituminous coal. More extreme pressure, resulting from the folding of the earth's surface into great mountain ranges, such as the Appalachians, produced the highest-grade coal. This high-grade coal is most likely to be found in the United States in underground mines along the eastern seaboard.

The first coal mined from the famous Appalachian bituminous coal field, which is more than 90 miles long and covers 63,000 square miles, occurred in the mid-1700s. Most of this coal, though, was simply dug from exposed coal seams on the earth's surface. During the 1800s, after the easily removable surface coal had diminished, underground mining became the industry standard. By the early 1830s in fact, underground mines were operating in many parts of Appalachia, as well as in several areas along the Mississippi River. In 1840 the U.S. coal industry mined its first one million tons.

As the coal industry gained strength in the 1850s and 1860s, the federal government began to play an increasingly important role in its development. Concerned about the loss of valuable federal coal reserves, Congress enacted the first legislation dealing specifically with federal coal resources in 1864. The legislation provided for the sale of coal lands at public auction for a minimum of $20 per acre, compared to $1.25 per acre for other types of land. The law was modified in 1865 to require that purchasers be miners, and that one buyer could acquire no more than 160 acres.

The Coal Lands Act of 1873 added further regulations to the sale of lands with coal reserves by stipulating new prices for federal lands that were located near railroads. This act remained the dominant law regulating federal coal reserves until the 1920s, when The Mineral Leasing Act was passed. The Mineral Leasing Act of 1920 essentially ended an era of federal coal disposal. By requiring mining companies to lease, rather than purchase, coal reserves, the act instituted an ideology of close government planning and supervision of federal coal production.

The Industrial Revolution.
By the late 1800s, U.S. coal production had reached a staggering 250 million tons per year. As the industry expanded, huge numbers of miners were employed to work underground. Besides suffering dismal working conditions for relatively low pay, miners were also exposed to serious hazards. Unsafe mining practices often resulted in cave-ins or explosions that killed hundreds of workers at a time, and poor ventilation gave many miners "black lung," an ailment caused by inhaling large amounts of coal dust.

To relieve the plight of underground miners, federal and state government bodies began regulating and mandating safety standards in the early 1900s. In addition, workers succeeded in forming powerful labor unions that forced improvements in working conditions and higher salary scales. Although workers began forming state unions as early as the 1890s, the United Mine Workers of America (UMW) had become the dominant force for change in the industry by the 1930s. By 1960 UMW members were responsible for 75 percent of industry output.

At the same time that industry workers were making gains, underground coal-mining companies were also realizing successes. Industrial growth in the early 1900s pushed U.S. coal production to more than 500 million tons per year in the early 1920s, the large majority of which was extracted from underground mines. International demand for U.S. coal after World War II further aided the companies; exports reached a record 80 million tons per year in the mid-1950s. Furthermore, the introduction of long-wall systems in the 1950s rapidly increased industry productivity. These factors combined to enable many coal companies to reap huge profits between 1900 and 1950.

Total demand for U.S. coal subsided after World War II--a result of the proliferation of alternative fuels, such as natural gas and oil. Nevertheless, coal producers benefited from the huge productivity gains achieved in the 1950s and 1960s because of the introduction of new mining techniques and advances in machinery. Although coal production fell to about 400 million tons per year by the late 1950s, worker productivity increased 50 percent, and payroll costs declined between 1940 and 1960. In addition, an increase in the demand for underground-mined metallurgical coal helped offset decreasing demand in other areas. The United States became a major supplier to Japan and Europe, who were trying to rebuild their countries. In fact, until the late 1970s the United States supplied 30 to 50 percent of those regions' import demand. Many underground coal-mining companies were thus able to maintain profit growth throughout the 1960s.

Industry Downturn.
In the late 1960s and early 1970s, the underground bituminous coal industry suffered serious setbacks. Most importantly, coal production in the United States rapidly shifted from underground mines in the East to surface mines in the West. New surface-mining technology and machinery, which allowed companies to surface-mine coal at drastically reduced costs, accelerated this trend in the 1970s and 1980s. Furthermore, western mine operators were able to employ mostly nonunion labor--a factor that eventually weakened organized labor's influence on underground-mining companies across the country.

Also during the 1970s and 1980s, domestic demand for metallurgical coal, which is primarily supplied by eastern underground mines, dropped from about 10 percent of total industry production to 4 percent. Because metallurgical coal is usually of a higher grade than steam coal, the loss of this high-income domestic segment constituted a serious blow to many Appalachian mine companies. The drop reflected the overall decline in the late 1960s and 1970s of the U.S. iron and steel industry, which was battered by foreign competition and productivity losses, among other problems.

Adding to industry turmoil in the 1970s and 1980s were stringent new environmental regulations and an increase in foreign competition in the export market. The loss of world export market share hit underground-mining companies particularly hard, as they produced a proportionately larger share of export coal than do surface-mining firms. Moreover, because of new safety and environmental requirements, underground-mine productivity fell from 1.95 tons per miner hour in 1969 to 1.04 tons by 1978.

As producers battled on several fronts, total demand for underground coal rose only 2 percent between 1980 and 1990. New legislation, much of it intended to protect the environment from both surface- and underground-mining operations, further pressured the industry. The Surface Mining Control and Reclamation Act (SMCRA) of 1977, the 1988 National Bituminous Coal Wage Agreement (NBCWA), the Ford-Wallop Agreement, parts of the Comprehensive National Energy Policy Act, and several other legislative efforts increased downward pressure on coal-industry profits, although environmental groups continued to protest that the measures were insufficient.

The net effect of western mining growth, diminished demand in some high-margin markets, and new regulations contributed to the decline of underground mining. Despite an overall rise in coal consumption to more than 950 million tons by 1990, the share of U.S. coal produced by underground miners plummeted from 65 percent in 1965 to about 40 percent by 1985. Even massive gains in productivity during the 1980s, to 2.54 tons per miner hour, were unable to restore profits for many ailing companies.

Though the number of underground mines dropped in the 1990s--in 1993 there were more than 1,100 U.S. mines, but in 1998 there were only about 860--underground-mining production increased through the 1990s, rising from about 351 million tons in 1993 to 430 million tons in 1998. The increase in production was due primarily to the trend toward larger and more efficient mines. The increasing use of long-wall and continuous mining methods also helped boost productivity.

Phase One of the Clean Air Amendment Act of 1990, which set a goal of cutting sulfur dioxide emissions nationwide by 10 million tons by the year 2000, went into effect on January 1, 1995. The law required electrical generating plants to lower smokestack emissions of sulfur compounds, but gave utilities wide latitude in how this might be accomplished. Plants that exceeded requirements received allowances that could be sold or exchanged on the open market. Because of this market-based approach, the legislation had not, by the time Phase One went into effect, had the calamitous effect that some analysts had feared. Most utilities had not found it necessary to install expensive scrubbers, but had found switching to low-sulfur coals and purchasing allowances adequate to meet the law's requirements. Midwestern mines that produce coal with a higher sulfur content felt the impact of the legislation most severely, while western low-sulfur coal producers experienced some relative benefit. The threat of increased environmental controls related to carbon-dioxide emissions and land reclamation was, however, a source of concern for many producers.

The Clean Coal Technology Program, a partnership between the U.S. government and private industry, began in 1986 with the goal of developing options for controlling hazardous emissions. With an investment of more than $6 billion, by the late 1990s the program had about 40 projects either completed or in development. These projects included advanced power generation systems designed to increase coal-to-electricity efficiencies, environmental control devices to reduce pollution in a cost-effective manner, and efficient coal processing and cleaning processes.

Underground coal mining came into national focus during the summer of 2002, when nine coal miners were amazingly rescued after being trapped 250 feet below the earth's surface in a coal-mining accident in Quecreek, Pennsylvania. The incident sparked numerous lengthy accounts by journalists and a made-for-television movie, which highlighted the significant dangers faced by underground coal miners.

Underground coal mining is facing significant challenges in the twenty-first century, one of which is struggling with increasingly stiff competition from very efficient surface mines, primarily located in the Western region. For example, Pennsylvania, a leading underground coal-mining state, had 216 surface mines in 2006. However, those 216 mines produced 12.2 million short tons of coal, compared with 20 surface mines in Wyoming that produce more than 446 million short tons of coal, making Wyoming the nation's top coal-producing state.

Found primarily in the East, underground mining produces more coal that is denser in sulfur than coal found in the Western region, causing high-sulfur coal to emit more environmentally undesirable pollutants when burned. Although coal-industry experts expect the Bush administration to leave room for coal-mining firms to operate with few new environmental regulations, smokestack emissions will continue to be a problem that will need to be addressed.

During 2006 underground coal mining continued to lag behind surface coal mine production. Although there were a total of 612 underground mines in 2006, yielding some 359 million short tons on coal, surface mines still stood at the forefront with 812 mines and 802 million short tons.

After falling for the last three decades of the twentieth century, coal prices stabilized during the first years of the 2000s, as production decreased slightly and demand increased slightly. Prices are not expected to change dramatically, unless new environmental rulings are instituted that would increase the cost of production. Earnings growth will also come from cost-cutting measures, including increased automation to lessen workforce expenditures.

Underground coal mining must overcome another tragedy after an August 2007 collapse at the Crandall Canyon Mine in central Utah caused the deaths of nine miners and three would-be rescuers and prompted legislators to question whether mine safety has improved since the Mine Improvement and New Emergency Response (MINER) Act of 2006 was adopted. That legislation came into effect after 12 miners died in an accident at West Virginia's Sago Mine in 2006.

Although not all accidents cause a loss of life, they do hinder production. On February 14, 2005, CONSOL Energy, Inc. reported that its Buchanan Mine near Keen Mountain, Virginia, underwent an industry upset with a "large rock fall behind its longwall." The miners were rescued and the mine was idled while the Mine Safety and Health Administration (MSHA) and the Virginia Division of Mines, Minerals, and Energy (DMME) monitored the dangerous gasses, namely carbon dioxide, rising from the mine.

Coal consumption is expected to increase during the first 25 years of the twenty-first century in conjunction with increased energy usage. Although natural gas is expected to siphon off a portion of coal's market share, increased energy consumption should keep coal mining operations busy.

In February 2002, President George W. Bush introduced the Clear Skies Act, a series of amendments for the established Clean Air Act (CAA). The act intended to lower the emissions from unsafe contaminants such as sulfur dioxide, nitrogen oxides, and mercury from power generators by 70 percent over the next 20 years. However, that legislation was never adopted. The same legislation was reiterated in February 2003, and again in March 2005.

The U.S. Environmental Protection Agency (EPA) enacted the Clean Air Mercury Rule in March 2005, which was the initial step in controlling mercury restrictions for coal-fired power plants. Phase One of the Clean Air Mercury Rule set a goal of cutting mercury emissions nationwide by 38 tons by 2010, whereas Phase Two would lower mercury emissions to 15 tons commencing in 2018. The total cost was expected to run about $50 billion over a 20-year period.

Although the Clean Air Mercury Rule passed, those who were directly affected would have preferred the Clear Skies legislation. For example, the Pennsylvania Department of Environmental Protection (PADEP) disputed the Mercury Rule, arguing that it was "creating an unfair marketplace that puts Pennsylvania at a competitive disadvantage," since bituminous coal and sub-bituminous coal have differing emission standards. Power generators also expressed that the Clear Skies Act would have been a better choice since "it would provide similar improvements in air quality with more regulatory certainty."

Current Conditions

The worldwide economic downturn affected the coal industry as demand fell dramatically in 2009. Demand from the electrical power sector fell 10 percent utilizing about 104 million tons less coal. Total consumption fell 10.7 percent or by 120.1 million tons. Domestic demand from coking coal added to the industry's woes falling 30.6 percent due to sluggish industrial sector.

An explosion at one underground mine with a history of safety issues killed 29 miners more than a thousand feet underground in the worst U.S. mine disaster in four decades at Massey Energy Co.'s Upper Big Branch mine in West Virginia. Soon thereafter, the Federal Mine Safety and Health Administration (MSHA) issued 1,287 closure orders between April 5 and August 5 of 2010. In the meantime, Congress allotted $18.2 million for MSHA to prosecute, including $3.8 million to the Federal Mine Safety and Health Review Commission to alleviate some of the accumulating cases surrounding mine violations.

In Addition, similar reform bills in Congress and the Senate would provide MSHA "more leverage over mine operators with troubling safety records and would further protect workers who speak up about safety concerns," published in the Huffington Post in October 2010. Another law that came into effect requires publicly-traded mining companies to include serious mine safety violations in their public filings with the Securities and Exchange Commission.

Industry Leaders

Consolidation among coal companies was extensive during the late 1990s. Arch Coal purchased the U.S. coal interests of ARCO, and Horizon Natural Resources (formerly AEI Holding Company Inc.) acquired the coal interests of both Zeigler Coal Holding Company and Kindill Mining, as well as the Martiki Coal Company, a subsidiary of MAPCO Coal Inc. In addition, AEI secured a portion of the coal properties of Cyprus-Amax Coal Company. Other acquisitions included the Kennecott Energy Company's purchase of Kerr-McGee's Jacobs Ranch Mine, the American Coal Corporation's buyout of Kerr-McGee's Galatia Mine, and MAPCO Coal Inc.'s purchase of the Cimarron Division of Andalex Resources.

The largest U.S. producer of coal in 2006 was Peabody Energy Corp., which produced 208 million short tons. The second-largest producer of coal in the United States was Rio Tinto Energy America, Inc. at 134 million short tons, approximately five million short tons more than Arch Coal, Inc. in third. Foundation Coal Corp. and CONSOL Energy, Inc. followed in fourth and fifth, respectively.

Of the six largest underground mines in the United States in 2006, three were located in Pennsylvania. Enlow Fork Mine, owned by CONSOL Energy Inc., was the largest, producing 10.7 million short tons. Bailey Mine, also owned by CONSOL Energy Inc., was third with 10.2 million short tons, following the 10.5 million short tons of second-place producer McElroy Mine (McElroy Coal Company) of West Virginia. Other top-producing underground mines included Foidel Creek Mine in Colorado, owned by Twentymile Coal Co. (8.6 million short tons); SUFCO Mine in Utah, owned by Canyon Fuel Co. (7.9 million short tons); and Pennsylvania's Cumberland Mine, owned by Cumberland Coal Resources, LP (7.5 million short tons).

The coal industry experienced its share of deals throughout 2009. In July of 2009, Alpha Natural Resources, Inc. and Foundation Coal Holdings merged their operations. That followed with Arch Coal, Inc.'s acquisition of Rio Tinto's Jacobs Ranch Mine located in the Powder River Basin in October of 2009. Then, Rio Tinto Energy America spun off all but one of its coal mines (Colowyo) in an initial public offering in November of 2009. The new entity called Cloud Peak Energy, Inc. will be comprised of the Antelope, Cordero Rojo and Spring Creek mines in the Powder River Basin.

The largest U.S. Producer of coal in 2009 was Peabody Energy Corp. with output totaling 192 million tons, which accounted for nearly 18 percent of domestic production. The second-largest producer of coal in the United States was Arch Coal, Inc. at 147.7 million tons, responsible for nearly 14 percent of total U.S. production. In third-place, Cloud Peak Energy produced 93.3 million tons or 8.7 percent of total production. Alpha Natural Resources, Inc. came in fourth with production totaling 85 million tons, of 7.9 percent of domestic production. Rounding out the top five CONSOL Energy Inc. had production totaling 59.4 million tons or 5.5 percent of production.

The top producing ground mines based on production in 2009 were CONSOL's Enlow Fork Mine in Pennsylvania, with 11.1 million tons; CONSOL's Baily Mine in Pennsylvania, with 10.4 million tons; CONSOL's McElroy Mine in West Virginia, with 9.9 million tons; Peabody's Twentymile Mine in Colorado, with 7.7 million tons; and Alpha's Cumberland Mine in Pennsylvania, with 6.8 million tons.

Workforce

Unions were increasingly concerned about job security in the 1990s. Coal companies argued that rising costs were pinching profit margins. Union leaders pointed out that coal production had increased 200 percent over the past two decades, while costs had been reduced by 50 percent, largely through payroll savings. Labor negotiators also charged mine companies with shifting production to nonunion facilities. By the end of 1993, however, the United Mine Workers union had agreed to terms with both the Bituminous Coal Operators Association and the Independent Coal Bargaining Alliance, the multi-employer bargaining groups of the industry, and had signed five-year contracts. This was only accomplished, however, after bitter strike actions and negotiations with the association.

Job opportunities were expected to continue to degenerate in the underground coal-mining industry. According to the Bureau of Labor Statistics, employment in the coal-mining industry was expected to decline about 35 percent from 1998 to 2008. In 2001 about 76,800 people worked in the coal-mining industry, down from about 91,600 people in 1998. By 2006, however, the trend reversed as the workforce grew to 82,959 in the coal-mining industry. Surface-mining jobs increased by 5.4 percent, and underground-mining job went from 45,416 in 2005 to 47,475 for an increase of 4.1 percent. In 2008, 86,859 people were employed within the coal-mining industry. The total reached 87,755 in 2009, in which 50,087 comprised underground-mining jobs.

With a significant portion of the coal-mining workforce entering retirement age, the industry has made a push to attract college-educated engineers into mining.

America and the World

The amount of coal exported from the United States has decreased considerably. In 1998 exports stood at 76.2 million short tons; by 2002 exports dropped dramatically to 39.6 million short tons, although that number grew to 49.6 short tons by 2006. Imports during that same period increased, from 16.9 million short tons in 2002 to 36.2 million tons in 2006. Canada was the largest consumer of U.S. coal in 2006, absorbing 15.3 million short tons of steam coal. Following stellar performance in 2008, exported coal plunged 27 percent in 2009 to 59.1 million short tons, however, the average price per ton increased to 3.8 percent compared to 2008.

Coal imports reached a record level of 36.2 million short tons in 2006, an increase of 19 percent from the previous year. Seventy percent of total coal imports come from Columbia, which along with Venezuela, Indonesia, and Canada accounted for 96 percent of the total U.S. coal import market. Coal imports fell 33.8 percent to 22.6 million tons in 2009.

World coal consumption is projected to increase 74 percent from 2004 to 2030, with China leading this growth. Production in China, the U.S., and India is expected to grow along with each country's domestic demand, while Australia, New Zealand, Russia, and nations in Central and South America are expected to increase exports. By 2030, it is projected that the U.S. imports of coal will be greater than exports, due in part to increased demand in the Southwest and declining productivity in the Appalachian region, and as of the mid-2000s, U.S. ports were being expanded in anticipation of this increase.

Foreign Investment.
A weak foreign dollar, the exit of traditional steel, oil, and utility interests, and the decline of European coal industries combined to generate an influx of capital into the U.S. coal industry in the early 1990s. The most significant move was made in 1990, when United Kingdom-based Hanson PLC acquired Peabody Holding (for which it paid $1.25 billion), America's largest coal producer. Similarly, Rheinbraun A.G., of Germany, paid $890 million for a stake in CONSOL Energy, the nation's second-largest producer at the time. Kennecott Energy was also acquired by the British conglomerate RTZ. At the same time, U.S. companies such as Cyprus AMAX, ARCO, and Peabody were involved in coal-mining ventures in Australia and South America.

Research and Technology

To combat regulatory entanglement, stagnant prices, and increased competition, underground coal companies were increasingly looking to advanced mining and coal-burning technologies for help. In addition, the industry was seeking new uses for its products that could open new markets.

Of critical and immediate importance to the underground coal-mining industry was clean-burning coal technology that could reduce sulfur emissions and allow utilities to comply with new Clean Air Amendment Act standards. Failure to achieve success in this area will likely result in many power plants converting to alternative fuels, a development that would devastate high-sulfur underground mining regions. The U.S. Department of Energy, working with researchers in coal companies and utilities, was developing five categories of research. Low-emission boiler systems incorporated advanced combustion and innovative flue gas cleaning systems in the initial design for new power plants. Pressurized fluidized bed combustion captured sulfur pollutants inside the boiler instead of in the stack and allowed combustion at temperatures below the point at which most nitrogen pollutants form. The integrated gasification combined cycle (IGCC) employed coal gasification rather than traditional combustion and combined a steam turbine driven by exhaust heat with the gas turbine driven by the coal gas. Indirectly fired cycles employed a design that heated a working fluid such as air to turn the turbine rather than the hot gases of combustion. Finally, integrated gasification-fuel cell combinations would link a coal gasifier with a fuel cell.

Mining equipment and methods are subject to continuous improvement for both productivity and safety reasons. Innovations in roof bolting systems, variable-slip clutches in belt conveyors, ceramic facings on belt drums, automated operations that include video or sensor-aided monitors, the use of robotic equipment, scaled-down equipment for use on beds thinner than four feet, and computerized control systems are being tested and employed throughout the industry.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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