Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A new US coal mine, scheduled to begin production next month, is lifting the spirits of an industry still hurting from the impact of low commodity prices and steep competition from other energy sources, which have triggered massive bankruptcies and closures in the past five years.
Once a full tilt, the mine will produce 400,000 tonnes of metallurgical coal a year for US and Chinese steel companies.
Corsa Coal’s (TSX-V: CSO) Acosta Deep mine in western Pennsylvania, expected to create 70 to 100 direct full-time jobs and another 500 indirect positions, is for many the latest — though rare — recent signs of a slight reversal of fortune for the beleaguered US coal industry, WSJ.com reports.
Once a full tilt, the mine will produce 400,000 tonnes per year of low volatile metallurgical coal destined to meet demand from mainly US and Chinese steel companies.
“The opening of the Acosta Deep Mine marks a return to coal industry job creation in Somerset County, Pennsylvania,” Corsa Coal officials said in April. “Metallurgical prices have risen to record levels on the strength of strong steel demand and supply scarcity.”
The Canonsburg, Pennsylvania-based company will join Ramaco Resources Inc., which began producing at its first mine in West Virginia in December and plans to open two more this year in Central Appalachia.
President Donald Trump railed against the Obama administration policies on coal and greenhouse emissions as he campaigned in economically depressed areas of states like West Virginia, Pennsylvania and Ohio. He won all three states and swept eight of the top nine coal-producing states.
Trump has promised to bring jobs back to the coal sector and has already reverse a few of his predecessor’s restrictions on fossil fuels, breaking with leaders across the globe who have embraced cleaner energy sources.
But analysts and even Trump’s advisor Gary Cohn believe such promise runs counter to market forces, including US utilities that have converted coal-fired power plants to cheaper, cleaner-burning natural gas.
Recently released federal data shows US coal miners have been cutting jobs for decades amid increasing automation, falling demand and steep competition from natural gas as well as renewables.
The Energy Department report released in January, revealed that coal mining now accounts for fewer than 75,000 US jobs. By contrast, renewable energy — including wind, solar and biofuels — accounts for more than 650,000 jobs.
To apply for a job at Corsa Coal’s Acosta Deep mine, click here.
