Energy and Natural Resources

Productivity Rises Even as Coal Mines Close and Demand Falls

07 March 2018

Coal mining productivity in the United States rose 26 percent over the past five years, reaching 6.8 tons per miner-hour in 2017. That was up from 5.4 tons per miner hour in 2012, according to the Energy Department's Energy Information Administration (EIA).

Coal productivity ranges widely across production regions, with productivity in the Powder River Basin in Wyoming and Montana, exceeding productivity in the Interior and Appalachian regions.

Source: EIASource: EIADuring 2017, productivity ranged from 2.4 tons per miner-hour in Central and Southern Appalachia to 28.8 tons per miner-hour in the Powder River Basin. The EIA says that this range is a result of fundamental differences between the coal-producing regions, including the size of mines, coal seam geology, extraction technology and coal types.

The EIA says that U.S. coal mining productivity has increased despite mine closings and falling employment and production. Technology and process improvements have contributed to the increase in productivity. The EIA says that a larger factor is the distribution of productivity across mines. It says that mines that are first to close during market downturns are often the ones with higher production costs and lower productivity. More productive mines remain operating, increasing overall productivity.

An estimated 547 of the 1,229 mines operating in 2012 have closed or been idled, accounting for a 45 percent decrease in operating mines. Miner-hours worked declined 39 percent over the same period. U.S. coal production has also fallen from 1,016 million tons in 2012 to 774 million tons in 2017, a 24 percent drop.

Source: EIASource: EIAIn 2017, there were 610 producing mines in the Appalachian and Illinois basins, where coal was mostly produced from underground mines with average seam thicknesses of up to six feet. The Powder River Basin (PRB) has 16 mines, but those mines produced 43 percent of the U.S. total. PRB mines are large surface mines with average seam thickness of 65 feet, allowing for the use of larger mining equipment and resulting in greater productivity.

The coal produced in Appalachian and Interior basins has higher energy content, and the mines are located closer to many of the power plants and industrial facilities that consume coal.

After several years of declines, coal production and employment rose in 2017. According to data, coal production in 2017 increased by an estimated 6 percent, and total labor hours rose by 7 percent from 2016 levels. These increases were driven in part by the stabilizing financial condition of producers that had been in bankruptcy proceedings during 2016 and by increasing export demand.

U.S. coal exports were 97 million tons in 2017, up from 60 million tons in 2016 and the highest level since 2014. Export markets were a destination for an estimated 13 percent of total U.S. coal production and about 30 percent of Appalachian and Illinois basin production in 2017.

To contact the author of this article, email david.wagman@ieeeglobalspec.com


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