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Central Appalachia hit hardest by coal job cuts

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World Coal,

Coal job losses in the US have been concentrated in 16 counties in Central Appalachia, according to new data from SNL Energy and West Virginia Public Broadcasting. The 16 counties form a contiguous band across Kentucky, Virginia and West Virginia and are all among the top 25 hardest hit counties in the country in terms of drops in coal employment.

Coal employment in Central Appalachia was down 13.86% in 1Q15 compared to the same period last year and times are not expected to get any better soon with layoffs in 2Q15 expected to drag down numbers further.

Meanwhile, it its latest analysis of the impact of the Clean Power Plant, the US Energy Information Administration (EIA) now forecasts no recovery for Appalachian coal production to 2030.

“Central Appalachia is going to see the biggest piece of the correction pie with respect to the downsizing of coal-fired power from the combined effect of cheap natural gas and closure of coal-fired generation,” Bennett Hatfield, former CEO of bankrupt Patriot Coal, told SNL.

Geology has also played a significant factor. Simply put, in a region where mining has taken place for generations, the easy coal has all been mined out, leaving only thinner – and more costly to mine – seams. Compared to the easy geology of the Power River Basin, its almost impossible to compete.

“The cost of [Central Appalachian coal] is higher than is was 10 years ago when prices were in the US$40s,” explained Hatfield. “Ten years ago we could still make money in certain areas.”

Despite this, there are some signs that the industry is not abandoning the region altogether: “There’s still interest in Appalachian coal and there’s still money to be invested in Appalachian coal,” said Bill Bisset, President of the Kentucky Coal Association, pointing to the acquisition of James River Coal Co. by Blackhawk Mining and its interest in Patriot Coal’s assets.

Written by . Source: SNL Energy

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