Amid mining decline, rural Pa. to begin excavating more lucrative coal variety
Published 4:45 pm Thursday, December 15, 2016
- FILE: A scrap of steam coal, bound for a power plant.
CRESSON, Pa. – As global markets shift and conflicting opinions swirl surrounding the coal industry, a mining project 11 years in the making is working to open in a rural Pennsylvania lumber town.
Rosebud Mining Co. has dusted off plans for the Cresson Mine.
The mine was set to open in 2015, under the supervision of previous owner Amfire Mining, and promised the community of 1,700 upwards of 300 jobs. However, new regulations stalled and eventually halted the project, and it has been sitting empty ever since.
News that the company will begin mining operations in the spring, employing 150, has excited the Cambria County community where 66 percent of voters punched their ballots for Donald Trump, who campaigned on promises to bring back blue collar jobs.
Metallurgical coal is what Rosebud Mining Co. plans to begin excavating in the small town of Cresson.
Steam coal — the kind burned in power plants — has been in the spotlight lately as part of presidential campaign rhetoric, but cheap, cleaner-burning natural gas and a move toward more sustainable energy, like wind power, are putting use of steam coal on the downslide.
The International Energy Agency estimates overall global coal demand in 2016 will fall below the 2013 mark, and the organization predicts though we burn more coal today than ever before, that global coal reliance will continue to fall, accounting for only 36 percent of the world’s energy production mix by 2021.
However, demand and prices for metallurgical coal — the high-quality kind required to produce steel — have been on the rise for most of 2016.
Slowed production in China has allowed U.S. resources to start to return to the global picture, creating a demand for narrow bands of high quality coal that still exist in parts of West Virginia, western Pennsylvania and other Appalachian territories.
Work at the Cresson Mine portal site is already under way and Rosebud Mining Executive Vice President Jim Barker said there’s optimism that miners will begin digging coal from an underground seam as soon as this spring.
“We’re going to start with one (mining) crew, but over time it has the ability to grow,” Barker said. “It is good news. And right now, we’re a lot more optimistic than we have been in quite a few years.”
During the summer, fewer than 50 people were employed at Rosebud’s combined local operations, which include two mines and one coal cleaning plant in the area. Barker said he expects numbers to increase to about 150 employees by the end of this month.
“It’s nice to see people getting back to work … working underground and getting overtime again,” he said Tuesday. “Seeing them working makes for a happy holiday season for us.”
However, this does not mean there’s going to be a massive coal industry rebound across the globe – or even locally, American Coal Council Communications Director Terry Headley cautioned. Most of the nation’s coal is the far more abundant steam varieties.
Unlike metallurgical coal, steam coal is more influenced by regulation and other factors like energy demand, Headley said in an interview last month.
Despite minor improvement in recent months, steam coal prices remain weak overall, Headley said.
“Metallurgical coal is much more demand-oriented. It’s a sought after commodity in the world … and right now, there’s nowhere for the market for it to go but up,” he said. If the economy improves, the market for steel production will drive metallurgical coal prices up further as well, Headley said.
In addition to the current strength in metallurgical coal prices, Trump’s election has contributed to industry leaders’ optimism for the revival of coal. Trump’s pledge to bring back jobs into Appalachia and coal country and his victory solidified Rosebud executives’ decisions to move forward on the Cresson Mine Project.
“I don’t think we would’ve pulled the trigger if it wasn’t for (Donald) Trump getting elected,” Barker said. “We’re hopeful things will be better for us under the next administration.”
Other coal companies in Western Pennsylvania and Appalachia are also optimistic about the future of their industry.
Corsa Coal, a top supplier of metallurgical coal based in Appalachia, announced in September they received $3 million from the state of Pennsylvania to expand local operations.
Robindale Energy subsidiary LCT Energy, a Pennsylvania mining company, has also been posting job listings for experienced coal miners and mine electricians over the past month.
Barker said they cannot be sure how long the surge will last, but the current market and the pro-coal rhetoric of the president elect has given Rosebud officials the confidence to make the significant investment required to open a brand new mine.
The Johnstown, Pennsylvania Democrat contributed to this report.
