Virginia coal industry: a study of utility markets
Traditionally, the Virginia coal industry has produced primarily metallurgical coal. Used by the steel-industry to make coke for reduction of iron ore in blast furnaces, Virginia's premium low-volatile coal was used worldwide. Together with new blast furnace and other steel making technology, depressed production has reduced the requirement for premium coking coal, stagnating the market and reducing world demand by 50%. Therefore, if the Virginia coal industry is to grow and prosper, it must expand its share of the steam and industrial coal markets. This shift will require lower-cost coal, since steam and industrial coal sells for a significantly lower price than met coal. This study evaluated the prospects for Virginia coal in the steam (utility) market. Only 16 to 17% of coal delivered to utilities within the realm of Virginia coal mines is, in fact, Virginia coal. Coal from West Virginia and/or eastern Kentucky is favored by two of the three utilities within the state. VP and New England Electric state the reason is that Virginia coal is tied to higher rail rates. Perhaps a new Virginia statute, which subsidizes Virginia-mined coal that Virginia utilities purchased by utilities ($1.00/ton tax rebate for tonnage over 1985 amounts) will help. VP management says the legislation may make a difference of 280,000 tons/year in 1987. Ultimately, however, higher productivity and lower production costs generated by vigorous small-contract mining companies and mining with longwall equipment may be the answer to higher margins for Virginia's coal mining industry. 14 refs., 9 tabs.
- Research Organization:
- Virginia Polytechnic Inst. and State Univ., Blacksburg (USA). Virginia Center for Coal and Energy Research
- OSTI ID:
- 5624987
- Report Number(s):
- NP-6901483; ON: DE86901483
- Country of Publication:
- United States
- Language:
- English
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COAL
MARKET
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COAL INDUSTRY
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COAL MINERS
FINANCIAL INCENTIVES
FOSSIL-FUEL POWER PLANTS
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LEGISLATION
LONGWALL MINING
NUMERICAL DATA
PRODUCTIVITY
UNDERGROUND MINING
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CARBONACEOUS MATERIALS
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FEDERAL REGION III
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