Look Taken at Coal Mining Costs and Trends for the 1980s

The coal industry is ever changing and complex. This article discusses some problems that must be faced and their projected economic effects. Coal's dominant market is for electric power generation. While growth rates in the 1980s will be nominal compared to historic growth rates, such growth will be substantial in absolute terms because it comes from a very large base. Higher growth is expected in the 1990s. History When looking toward the future, an examination of the past is helpful. Figures 1 and 2 present production and consumption statistics (expressed in short tons) on bituminous coal and lignite in the US from 1945 onward. After an all-time peak of 572 Mt (631 million st) in 1947, total production dropped to 356 Mt (392 million st) in 1954. Sustained growth in total production did not begin until the 1960s. Coal production from under-ground mines declined from more than 400 Mt (440 million st) in 1947 to about 295 Mt (325 million st) during 1965 to 1970. A further decline ensued until a strike in 1978 reduced production to only 218 Mt (240 million st). Underground mines produced 283 Mt (312 million st) in 1983. Coal production from surface mines has increased steadily since the early 1960s. While some of this increase has come from mines east of the Mississippi River, most has resulted from surface mines developed in the West. Production from surface mines west of the Mississippi River was 224 Mt (247 million st) in 1982. Total coal production from under-ground and surface mines, other than Western surface mines, continues to approximate levels of 40 years ago. In spite of several wage increases, increasing productivity in surface and underground mines enabled the coal industry to hold the average value f.o.b. mine to about $5.50/t ($5 per st) from the end of World War II to 1969. Under-ground mine productivity peaked at more than 13.5 t (15 st) per man-day in 1969. The Coal Mine Health and Safety Act of 1969 was a major factor in underground productivity declining to 7.6 t (8.4 st) per man-day in 1978. However, pro-