Sunday, July 29, 2007
Coal is king but for how long?
It’s dirty, it’s dangerous, but it pays.
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When several coal companies needed new miners a few years back, they ran a job fair in Castlewood.
Doug Harris , a vice president with one of Alpha Natural Resources’ family of companies, expected 150 people to show.
“Eight hundred people showed up,” he recalled. “People camped out the night before. It was unbelievable.”
It’s a safe bet coal mining doesn’t top many people’s list of dream jobs. It’s dirty. It’s dangerous. But it pays.
Mining wages were double the state average in Virginia’s largely depressed coalfields region last year. In an area where unemployment is high and the percentage of people with a college degree is low, the financial case for becoming a “red-hat” — industry slang for a rookie miner — is clear.
Asked just how important coal is as a source of jobs and revenue to the seven-county coalfields region, Jack Kiser, a former miner who is mayor of Saint Paul, said: “Coal’s been king here for years and it will be for the future.”
The question is: how far into the future?
Virginia is believed to be the first state where coal was mined. Its best seams are long gone. What coal is left is increasingly difficult to get. The industry produced a third less coal last year than it did in 1990, when Virginia coal production peaked. It employed fewer than half as many people.
Coal may still be king, but according to the Virginia Coalfield Economic Development Authority , it’s now the No. 3 employer in far Southwest Virginia, after services and retail. “Fifteen years ago it was number one,” said Jonathan Belcher , the authority’s executive director.
But, he added, “It is still the largest economic driver in the region because these are the highest-paying jobs in the area — the jobs that are in the coal industry or coal-related.”
Given that, the shrinking of the industry creates a “high level of concern for us,” said Belcher, whose agency is charged with luring investors to help diversify the economy of the region containing Buchanan, Dickenson, Lee, Tazewell, Russell, Scott and Wise counties and the city of Norton .
An uncertain future
The most recent estimate of the state’s coal reserves available from the Virginia Department of Mines, Minerals and Energy is from 2000, but its figures indicate the amount of economically minable coal would last 45 years if production continued at last year’s level of 29.5 million tons.
But the Virginia Employment Commission projected mining jobs in the coalfields region will have declined nearly 19 percent from 2004 to 2014, about 80 fewer jobs each year. Last year 4,418 people worked in mining in Southwest Virginia, according to the commission. The state offers tax credits to help keep Virginia production going despite thin coal seams.
While they concede the state’s mining heyday is past, some industry executives and advocates question the glum projections. Improved technology and good prices for coal may lead companies to go after thin or hard-to-reach coal seams they would otherwise leave in the ground, said Dink Shackleford , executive director of the Virginia Mining Association .
“I think you’re going to see a fairly stable industry,” he said.
Others sound less optimistic.
“Each year you can feel the difference in the amount of work you get because there’s fewer of them mining,” said Joe Matney, president of Mescher Manufacturing Co. of Big Rock, in Buchanan County . The firm, which rebuilds and repairs mining equipment, was founded by Matney’s father-in-law in 1953 and has seen coal’s fortunes wax and wane. Lately, Matney said, “It’s kind of on a downhill slide as far as this county is concerned.”
Matney serves mostly smaller companies, which are said to be struggling not only with thinning coalfields but also tougher safety regulations that raise mining costs.
That, along with higher prices for equipment, is likely to add to consolidation in the industry as larger players buy out smaller ones and look to use economies of scale for “wringing out” costs, said Steven Marascia , an analyst with Anderson & Strudwick of Richmond .
Alpha Natural Resources exemplifies that trend. It has grown by buying other companies or taking over the mineral rights to coal seams. Through its two subsidiaries, Paramont and Dickenson-Russell , Alpha mines more Virginia coal than any other company. It went public in 2005 and reported nearly $2 billion in revenue in 2006.
Even though the number of Virginia mining jobs may keep shrinking overall, a wave of retirements is coming, offering opportunities for many to don the red helmets given all new miners to distinguish them underground.
Industry struggles in the 1990s, when energy prices were generally low, meant that companies were not hiring, and a generation that might have headed into the mines instead found work elsewhere, said Phil Smith, spokesman for the United Mine Workers of America .
As a result, many Virginia miners are in their 50s now, and, given the physical demands of the job, they are unlikely to last much longer. “You can’t go underground to work much past 55 and 60 because of all the hands-and-knees movement,” said Barbara Altizer , executive director of the Eastern Coal Council in Richlands.
Dante Lee , principal of Coeburn High School , said coal company recruiters still come by to pitch the profession to his seniors.
“It’s not like it once was, but it is a business where people still have employment,” said Lee, whose father mined coal in West Virginia.
Still digging in
Just outside Carbo, in Russell County, Alpha’s Paramont subsidiary has tunneled through rock to a bed of coal that was viewed as too difficult and expensive to mine just a decade ago. Deep Mine 35’s main shaft runs about two miles long and 900 feet down. After two years of operations, the shuttle from the mine mouth to the coal face now takes 20 minutes. In tunnels sometimes no more than 50 inches high, coal is ground from the face of the seam with a remote-controlled machine known as a miner, one of numerous technological changes that have allowed companies to get more out of the ground with fewer people.
The miner spits coal onto a shuttle car, which is driven toward the conveyor belt that will carry the coal to the surface.
To prevent a cave-in , the miner is not allowed to dig too far into the seam before the roof of the cut-away area is shored up by two men with a roof-bolting machine. It holds up the ceiling with a huge hydraulic jack, then inserts 4-foot-long metal bolts into the ceiling to hold in place square metal supports that are about as big as pizza pans. The process is repeated. The shaft gets a little longer each time.
Alpha Natural Resources may have a statue of a pick-wielding coal miner in its Abingdon headquarters , but, as Deep Mine 35 foreman Darrell Holbrook points out, that traditional image of a miner is a far cry from what goes on underground today.
“It’s above a pick and a shovel,” Holbrook said.
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