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CLARKSBURG – While the West Virginia oil and gas industry has been very interested in recent years, industry experts believe that coal still plays an important role in Mountain State.
The industry peaked production in 2008, with nearly 158 million short tons mined. Over the next decade, production levels have slowed to a minimum of 40 million short tons in 40 years in 2016.
According to Bill Raney, president of the West Virginia Coal Association, the sector is currently trying to recover.
"We are on the rebound of 2016, which was our lowest point," he said. "In 2017, we captured about 10 to 12 million tonnes, then 8 to 10 million the following year. By the end of 2018, we had produced about 100 million tonnes.
About 14,000 full-time coal miners in West Virginia are supported by about 35,000 contractors, Raney said.
The coal is mined in 26 of 55 counties in the state, Raney said.
"In many of these counties, coal is probably the biggest private investment in the county," he said. "And they're probably the biggest employer, not in numbers (in numbers), but in payroll."
James Wood, acting director of the Energy Institute at West Virginia University, said the state's coal industry could be divided into three sections: steam coal, metallurgical coal, and export coal.
"The coal supply of West Virginia is abundant and of good quality. Thus, with respect to the domestic demand for coal met, West Virginia will be a major supplier to the United States as the economy continues to grow and could compete favorably with international markets, "he said. . "Steam coal is declining at the national level and attempts to extend credit to power producers using this coal could slow down the pace of retirements, but they are unlikely to encourage public electricity producers and private to launch licensing and development efforts for the new generation of coal.
"On the other hand, steam coal from West Virginia is of good quality and should be competitive with Australian and Indonesian coal. India and China will turn to better quality coal, such as West Virginia and Northern Australia, as they develop higher cycles of efficiency. . "
In February, Arch Coal announced plans to build a new mine in the Barbour County area.
The facility is expected to produce about 3 million tons of coking coal a year and provide opportunities for 600 local workers.
The new mine, Leer South, will be similar to the existing Arch River Leer existing mine in Taylor County. According to company officials, the mine will operate on the same 200 million tonne reserve base as Leer.
Arch plans to invest between $ 360 and $ 390 million over the next three years to develop the new mine. The commissioning of the long-sized long-life is scheduled for the end of 2021.
"We are excited about this new project, which we consider a transformation for Arch Coal and its shareholders," said John Eaves, CEO of Arch. "With the addition of Leer South, Arch will significantly strengthen its world-clbad coking coal badet portfolio and consolidate its position as the world's largest producer of high-volume coking coal.
"We believe that the global demand for high volume aeration coke and Leer brand in particular is significant and unmet. We are already in discussions with major steel producers around the world who are seeking additional volumes of our Leer brand products. Eaves said.
The Company plans to sell production from the Leer South complex primarily to the offshore coking coal market with a capacity of 300 million metric tonnes per year.
Steel market experts are expecting strong growth in offshore coking coal demand over the next decade, driven by substantial growth in the steel sector in India and other emerging Asian economies, according to the company.
"Given our strong cash generation outlook, as well as other measures taken to increase liquidity, we plan to fund 2019 spending for the new development with internally generated liquidity and available cash", said Eaves. "Even with the planned increase in our capital expenditure budget for 2019, which includes about $ 90 million related to the Leer South project, we expect to be able to continue our share buyback program. at levels similar to those of 2018, if we decide to do so. "
In addition to his plans for Leer South, Arch announced that it would move from pillar mining to its Mountain Laurel operation in early 2020, and transfer the Mountain Laurel long-haul equipment to Leer South at that time.
Cheryl Wolfe, Executive Director of the Barbour County Economic Development Authority, said the announcement of the Arch was good news for the region as a whole.
"We are very excited about this and are pleased that Arch Coal is investing in our county," she said. "I think it will be great for our riding. These jobs will create a lot of indirect jobs. "
Raney said he expects operators in the north-central region of West Virginia to continue investing in their existing facilities over the next few years.
"I think there will be extensions of existing mines," he said. "They will continue to develop the surrounding infrastructure, and it's very encouraging to see."
The long-term future of coal mining in West Virginia will be determined by a combination of many political and economic factors, but industry experts believe its future is bright, Raney said.
"We hope it will be positive," he said. "We hope the export market will continue to be strong. We hope to recover some of the market we lost in the South and East steam coal markets. If we can reach and keep about 100 million tons of annual production in West Virginia, I think we can continue. "
According to a study by WVU's Bureau of Business & Economic Research, the coal industry would remain "relatively stable" until the early 2020s.
According to the study, coal production at the state level is expected to be less than 80 million tonnes by 2030 and continue to decline by 2040.
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