Coal Production is Increasing in Western Kentucky

Western Kentucky’s coal production has picked up again, as we see mines employing new workers. In general, production is growing across the state, though it is decreasing in Eastern Kentucky.

In 2013, production in Eastern Kentucky decreased while Western Kentucky skyrocketed by 90 percent since 2003. According to Kentucky’s Energy and Environment Cabinet, production was dropping in Western Kentucky due to the area’s high concentration of sulphur; however, mines in Western Kentucky have since installed scrubbers, which cleanse the coal of pollutants and, in turn, have increased production.

According to the most recent Kentucky Quarterly Coal Report, which includes production from July through September, Kentucky generated 19.9 million tons during the three month period.

For the past three quarters, total Kentucky coal production has increased; but while Western mines’ production have risen by 5.2%, Eastern mines’ production has fallen by 4.3%. Analysts anticipate that production from the coal basin, including Western Kentucky, will see an upsurge in the following 25 years.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

December 2, 2014

Phinix LLC

Copyright 2014. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Heavy Metal Lurks in the Shadows” – Wall Street Journal, 27 December 2013

Across the world, millions of tons of metals — aluminum, copper, nickel and zinc — are being kept in secretive “shadow warehouses”, facilities that have gone unchecked and that don’t reveal their assets to the public. These warehouses function separately from the London Metal Exchange (LME), the long-established system for housing such metals.

Anywhere from 7-10 million tons of aluminum are being kept in shadow warehouses, both in the states and abroad, in places like Malaysia and the Netherlands; while a scant 5.5 million tons of aluminum are currently stored in LME warehouses.

Because producers and consumers don’t know how much metal actually exists on the market, it has become more and more challenging for experts to determine market pricing. If large quantities of metals surface onto the market from shadow warehouses, then it can become more costly to create everyday goods; conversely, mine and smelter production could be curbed if pricing falls beneath production expenses.

Shadow warehouses can be more profitable for companies involved in the metals markets: the unregulated facilities cost 10 times less than LME warehouses, while also providing companies with information that the general public doesn’t know. Yet, companies involved in the shadow warehouse system may have to pay higher bank interest rates, since LME warehouses are thought to be more stable.

In November, LME set new guidelines that obligate LME warehouses to ship out more metal than they receive, for deliveries with 50+ day wait times. Many LME warehouses have been experiencing massive bottlenecks, which the new rules address. The rules will begin on April 1.

Shadow warehouses exhibit the dark side of capitalism, where metals are stored and hoarded for profit making, and where market supply and demand dynamics are being artificially controlled.

See also:
Metals Logjam Benefits Producers
Aluminum Probe Focuses on Costs to Users
A Shuffle of Aluminum, but to Banks, Pure Gold

Developed and Written by Dr. Subodh Das and Tara Mahadevan

December 29, 2013

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Coal’s Decline Hits Hardest in the Mines of Kentucky” – Wall Street Journal, 26 November 2013

Wall Street Journal

While the US’s stores of natural gas have been boosting the economy and lowering gas prices in unprecedented ways, the influx has also been hurting many Americans, especially those working in the Central Appalachian coalfields, primarily located in Kentucky, Virginia, West Virginia and Pennsylvania.

Over the past two years, dozens of Central Appalachian mines have closed, causing massive layoffs, which are likely to be permanent for the area. The coal industry is now concentrating on two other major coal basins in Wyoming and Illinois that are cheaper to mine.

Data from the Mine Safety and Health Administration shows that 26 Kentucky counties are the hardest hit by mine closings — counties that have been mining for over a century. Before 2011, the number of mining jobs in the region never dropped below 11,400; however, after 2011, the number of mining jobs has declined to 8,000, the fewest number of jobs since the 1920s. Almost 100 mines Kentucky’s eastern coalfields have shutdown since 2011, from 256 active mines to 161.

Many of the unemployed miners blame the layoffs on Obama and the EPA for introducing new regulations that will limit emissions for coal-burning power plants, what many Republicans have deemed the “war on coal.” However, the coal industry sees the layoffs as the sum of many things: new fracking technologies have further depressed the coal market, and Obama’s regulations have only worsened the situation.

Furthermore, many of the affected Appalachian coal mines’ production costs are higher (with a cheaper selling price), more abundant and more polluting than steam coal (used for power generation). Metallurgical coal, on the other hand, requires less production and a lower selling price needed for exportable global iron and steel production.

In 2003, coal produced 51% of US electricity and natural gas produced 17%; in August 2013, coal produced 39% of US electricity and natural gas produced 27%. The EIA has calculated that, while coal will still be power plants’ biggest fuel supply, use of coal by electricity utilities will decline over the coming decades. Around 9% of coal-fired power plants will be closing between 2013-2018.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

December 12, 2013

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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