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More coal production per worker: Tunnel Ridge Mine driving company sales increases

By CASEY JUNKINS

The Weirton Daily Times

WHEELING, W.Va.  — Strong sales from Ohio County’s Tunnel Ridge Mine allowed Alliance Resource Partners to market 32 percent more Appalachian coal from July 1-Sept. 30 compared to same period in 2015.

Also, data from the Mine Safety and Health Administration show the Tulsa, Okla.-based firm mined 6.63 tons of coal for every employee hour worked at Tunnel Ridge in 2016, an increase in productivity from the 5.46 tons extracted per hour just one year prior — and up from just 4.2 tons for every hour worked at the mine in 2013.

Even as President-elect Donald Trump promises to help unemployed miners get back to work, the MSHA data show companies continue the decades-long trend of producing more coal with fewer employees. For example, in 1980, the national productivity rate for coal mining was under 2 tons per hour, according to the U.S. Energy Information Administration.

This also plays a major role in the United Mine Workers of America pension obligation problems, as far fewer active miners are paying into the pension fund to support retirees.

Further examination of the MSHA statistics reveals a similar increase in employee productivity at every underground mine in the Upper Ohio Valley. The amount of coal produced for every employee hour worked at the Murray Energy Corp. Ohio County Mine is now 6.2 tons, which is up from 3.4 tons per hour in 2013 — the year before Consol Energy sold it and four other West Virginia mines to Murray for $3.5 billion.

Workers at Murray’s Century Mine near Beallsville are now producing 6.3 tons of coal for every employee hour, which is up from 5.1 tons an hour in 2013. The rate at the Marshall County Mine is now 6.2 tons per employee hour worked, which is up from 4.3 in 2013.

Meanwhile, Robert E. Murray, who serves as chairman, president and CEO of the company which bears his name, worked hard to help elect Trump in hopes of overturning regulations imposed by President Barack Obama’s administration, including the Clean Power Plan, the Mercury and Air Toxics Standards and the Stream Protection Rule. The air rules make it more expensive for electricity producers such as FirstEnergy Corp. and American Electric Power to burn coal, while Murray says the stream regulation would, if implemented, make longwall mining unrealistic.

Despite all of this, officials at Alliance watched as coal sales from the Tunnel Ridge facility helped the company market 32 percent more of the mineral from Appalachia during 2016’s third quarter compared to the same three-month period in 2015.

“Strong summer coal burn, favorable natural gas prices and reduced coal inventories, for both utilities and producers, all contributed to improved supply/demand fundamentals during the 2016 quarter,” Alliance President and CEO Joseph W. Craft III said of the company’s July 1-Sept. 30 performance.

“Record sales volumes allowed us to significantly reduce coal inventories and, along with ongoing cost containment efforts, led to increased net income and earnings before interest, taxes, depreciation and amortization,” he added.

According to the EIA, Alliance is the sixth-largest coal producer in the U.S., yielding 44.7 million tons of the mineral in 2015. However, three of the four largest producers — Peabody Energy, Arch Coal and Alpha Natural Resources — have each filed for bankruptcy at some point during the last two years.

“Looking to 2017 and beyond, we anticipate a recovery in the domestic thermal coal markets as higher natural gas prices spur increased demand for coal and supply is reduced by increased shipments of U.S. coal into the export markets,” Craft added. “We remain convinced that our strategically-located, low-cost operations, conservative balance sheet and consistently strong performance have (Alliance) well positioned to benefit from an improved market environment.”

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