From the September-October 2015 issue of News & Letters
Detroit—Escalating bankruptcies in the nation’s coal industry paint a grim future for the industry and for coal miners and their families. The bankruptcies, sweeping the coal fields everywhere, have affected the largest and smallest mines. As a result, thousands of coal miners have been laid off.
Alpha Natural Resources, the fourth largest coal company in the U.S., filed for bankruptcy in August. That followed Walter Energy, Patriot Coal and a number of smaller companies in the past few months, which already had thrown thousands of coal miners out of their jobs. There are now some 80,000 surface and underground miners, about 8,000 fewer than a year ago.
Coal prices have plummeted more than 70% in the past four years, dramatically reflected in today’s market prices. The stock price of Peabody Energy, the country’s largest coal producer, dropped from $16 a share a year ago to about a dollar a share today. The thinking a few years ago was that China would be a lucrative coal market for the foreseeable future, but this has abruptly disappeared as China has cut back drastically. Coal consumption in the U.S. fell from 1.1 billion tons of coal in 2011 to 924 million tons last year, most of which went to coal-fired electricity generating plants.
These forces now converging on the coal industry and resulting in massive layoffs are reminiscent of the late 1940s, when the industry began automating. In less than a decade, introduction of the continuous miner cut the number of unionized miners from half a million to around a hundred thousand.
The economic conditions became so horrible that many miners’ wives were forced into prostitution to keep their families alive. A report of these conditions in Welch, West Va., sparked food drives across the nation to feed the people there. Will we see a repeat of that horrific situation in the near future in the coal regions in the U.S.?