Coal Mining Stages a Comeback

---

As researched by Industrial Information Resources (IIR), resurgence in coal demand is sparking a wave of coal mining developments. Due to high energy costs and fluctuating natural gas prices, electric generators are looking at coal as an economical fuel for new grassroot and expanding power plants. The increase in coal demand has prompted several coal mining companies to invest in expansion and grassroot ventures in order to supply power generators with fuel choices. The new interest in coal is shining a light on the coal mining industry, which in recent years has lost market share as power generators have turned to natural gas as their primary fuel choice. This is especially good news for coal mining in the mid and eastern U.S. that has historically lost considerable market share to low sulfur western coal, because of the Environmental Protection Agency's (EPA) Clean Air Act mandate.

Several mine-mouth projects are being planned. Mine-mouth projects involve a coal-fired power plant that sits on or adjacent to a surface or underground coal mine. This allows companies to capitalize on several logistical and environmental synergies. It also eliminates the transportation costs associated with shipping coal across the country to end users. One example is the Peabody Group (Saint Louis, Mo.) who is developing a $1 billion Thoroughbred Energy mine-mouth project in Kentucky. The project couples a six million ton per year coal mine with a 1,500 mega-watt (MW) power plant.

Other examples include Anker Energy Corporation (Morgantown, WVa.) and Dominion Energy (Richmond, Va.) who recently announced plans to co-develop a mine-mouth project at Anker's Upshur property in West Virginia. The $600 million project includes a two million ton per year surface coal mine and raw coal handling system to be built by Anker Energy and a 450MW power plant built by Dominion at the mine site to receive new and waste coal from Anker's reserves. Arch Coal Incorporated (Saint Louis, Mo.) is planning a $150 million grassroot coal mine to support a proposed mine-mouth power plant in Pinckneyville, Ill. TransAlta Centralia Mining LLC (Centralia, Wash.) is underway with a $30 million expansion of their coal mine and preparation plant in Centralia.