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EIA: US coal mine capacity fallen 28% since 2009

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World Coal,

The US Energy Information Administration’s (EIA) latest ‘Annual Coal Report’ shows that US coal mining productive capacity, or the maximum amount of coal that mines can produce in a year, totalled 1009 million short t in 2019. This amount represents a 28% decrease from the peak productive coal mine capacity of 1407 million short t reported in 2009. US coal production declined by 35% during the same period because many coal mines closed and the remaining mines produced less coal.

Annual US coal mine utilisation, which is the ratio of annual coal production to productive capacity, was 70% in 2019, and it averaged 72% from 2015 through 2019 and reached a record low of 68% in 2016. In contrast, from 2000 to 2014, capacity utilisation averaged 82%. Mine utilisation is falling as US coal demand is decreasing across several sectors.

The two primary methods to produce coal are surface mining and underground mining. Productive capacity at surface mines fell from 773 million short t in 2015 to 656 million short t in 2019, a 15% decrease. In addition to lower productive capacity, surface mine capacity utilisation declined from 77% in 2015 to 68% in 2019 because the remaining mines were producing less coal.

From 2015 – 2019, despite a 12% decline in productive capacity and 14% decline in coal production, underground mine utilisation remained near 77%, which indicates that underground mines were idled or closed rather than left open to produce at lower rates.

Mine employment and productivity have declined in the past decade as coal demand has decreased. Surface mining operations (especially those in the Powder River Basin, a mining region primarily in Wyoming and Montana that produced 42% of US coal in 2019) are less labour intensive, relying more on automation and heavy machinery than manual labour.

Scaling down production by idling select equipment at surface mines is often feasible even if it makes the mine less productive. Scaling down operations at underground mines, however, is more difficult because of the higher fixed costs to maintain ventilation and ensure worker safety throughout the mine, even if the mine is producing less coal and employing fewer people.

Utilisation rates have remained more stable at underground mines because almost all US metallurgical coal, which is used in steel production, is mined underground, and demand for metallurgical coal has remained somewhat stable. Demand for thermal coal, which is used for electricity generation and industrial, commercial, and institutional heat, has steadily declined since 2011. Surface mines produced about 60% of the thermal coal consumed in 2019.

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