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Coal output continues to drop in central Appalachia

World Coal,

Preliminary data from the Mine Safety and Health Administration (MSHA) shows that coal production in Central Appalachia has continued on its multi year downward trend over Q1 2014.

Basin production totaled 28.4 million short t, down from 33.1 million short t in Q1 3013. Output was less than half Q1 2007 production levels of close to 60 million short t.

The central Appalachian region has lost domestic power market share to other coals and natural gas, while weak seaborne prices have dented exports.

US power sector coal demand jumped early this year in response to cold weather and higher natural gas prices. The benefit to central Appalachian producers was limited though by utilities’ growing reliance on cheaper coal from other basins, as well as by tough cost comparisons to gas even at higher prices. Snow and ice snarled rail and barge traffic this winter, further restricting shipments.

Reduced exports weighed on production as well. Seaborne coal markets are oversupplied and prices are too weak for some central Appalachian producers to economically ship overseas. US coking coal exports in the first quarter fell by 7% on the year to 16.9 million short t, while thermal exports slumped by 20% to 10.9 million short t.

Some mines in the region are closing or temporarily shutting down. InQ1 2014 a total of 364 mines produced coal, down from 446 in the same period a year ago. 

Edited from various sources by Sam Dodson

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