Demand for Eastern U.S. Coal Up-Mining Expansions Mount

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Expansion of coal mining operations in eastern and interior U.S. coal basins was once an oxymoron, but as more and more eastern coal-fired power plants retrofit their boilers with clean coal technology to rid the air of SO2 and NOx emissions, eastern coal is becoming feasible and is in high demand. Both new coal mines and expansions of existing mines in states such as Indiana, Illinois, Kentucky, Ohio, Pennsylvania, Texas, and West Virginia are on the books to meet this demand. Industrialinfo.com is tracking more than $1.4 billion in coal mining projects involving new mines, expansions, prep plant additions, overland conveyors, and more.

Click on the image at right to view a chart showing the breakdown of coal mine project spending in the Eastern U.S. by state.

Low-sulfur coal from the Powder River Basin in Wyoming and Montana became the fuel of choice for a good number of coal-fired power plants, including some located as far away as Florida. Since 1999, coal mined west of the Mississippi has provided the majority of the coal consumed in the country. Since 1965, coal production east of the Mississippi river has stayed essentially static, at around 500 million tons annually, while western coal has increased by over 2,000%, up to around 566 million tons annually.

Peabody Energy is spending $25 million to reopen a mine in Southern Illinois. The underground Gateway mine, previously known as the Zeigler No. 11 mine, and formerly operated by now bankrupt Horizon Natural Resources, will produce two million tons per year. This is a good example of another growing trend for the industry, whereby larger, healthier mining firms, such as Peabody Energy, Arch Coal, or CONSOL Energy are acquiring closed Eastern mining properties and restarting operations.

Small producer, Buckingham Coal Company could spend up to $30 million to open two new underground mines in Ohio, with the potential of producing up to four million tons per year. A 500-ton-per-hour coal wash plant is being studied. The company currently has a contract to supply 1.2 million tons per year of coal to American Electric Power's Conesville power plant.

CONSOL Energy Incorporated (NYSE:CNX ) (Pittsburgh, Pennsylvania) recently announced more than $500 million in new mines and expansions in Pennsylvania. See related June 13, 2005 news article titled - Recent $500 Million Plans for Consol Energy Coal Mining Expansion Highlight Growing Trend for New Mine Development in the U.S.

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