Coal Mining in the US

Since the 1970s, there has been a gradual shift towards surface mining with underground mining production remaining constant. It is cheaper to extract coal from surface mines and the reduction in these costs can be passed on to consumers. The difference in cost is more marked for mines with a capacity of more than one million tons of USD17.52 per ton for surface mines and USD 49.92 per ton for underground mines. At the end of 2009, average costs for coal from surface mines (USD 23.11 per ton) were just over half the price of coal from underground mines (USD 55.77 per ton).

Prices of coal vary widely depending upon the extraction technique used. The most expensive is continuous extraction at an average of USD 61.27 per ton, then USD 50.64 per ton for longwall extraction and USD 47.00 per ton conventional methods. Approximately half of underground mines in operation use longwall extraction methods and half use continuous extraction.

Nine of the ten biggest surface mines in terms of production output are located in Wyoming and three of top 10 underground mines are located in Pennsylvannia. The majority of the large multi-mine complexes are located in West Virginia and Kentucky. Of the large mines in operation, the largest are surface mines, with Peabody Energy (165.5 million tons), Arch Coal (122.6 million tons) and Cloud Peak Energy (91 million tons) owning a large proportion of them.

The electric power sector, which is made up of electricity producers whose primary business is producing power for public distribution, accounts for the vast majority of over 90% of US coal consumption. Coke plants and “other industrial” take nearly all the rest. In coming years, sulphur dioxide (SO2) emissions standards are to be tightened through measures such as Phase 2 of the Clean Air Act Amendments, CAAA, which took effect in 2000. Due to such standards, the share of low-sulphur coal which is mainly from Western US, is expected to increase in the country’s total coal consumption mix.

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