COAL REPORT July 22, 2008

A major Appalachian coal producer has changed hands. The Cleveland-Cliffs company announced it will buy Alpha Natural Resources for $10 billion, according to the Coalfield Progress. The new company will be called Cliff Natural Resources, with headquarters in Cleveland. Officials say that coal operations will continue without interruption and remain headquartered in Abingdon, though the Cleveland Plain Dealer reports that a few management jobs may move north. Alpha operates mines in Kentucky, Virginia, West Virginia and Ohio. The combined company will offer a range of products to the steel industry worldwide. Alpha is now America's largest producer of metallurgical coal, while Cleveland Cliffs has recently bought a lot of iron ore properties. Cleveland-Cliffs was formed in 1891 and has been in the iron mining industry ever since.

Stock analysts say that there may be more deals in the works. They say that the combined company may itself be a tempting target for a takeover by an even larger company. The website Bloomberg.com reports that an Indian steel company, JSW Steel, may buy out United Coal Company, while Peabody, James River, and Massey are also said to be possible takeover targets.

A TECO subsidiary has withdrawn its request to open a mine in Elkhorn City, according to the Appalachian News-Express. Clintwood Elkhorn Mining had already started work on a site at Lower Branch when they ran into a city ordinance that any mine within the city limits needs approval from the City Council. The company claimed the ordinance was itself illegal, but the Kentucky attorney general declined to issue an opinion one way or another, so the matter would be headed for court if the City Council disapproved. The Council was divided on the issue, with some members pointing to jobs and taxes from a mine, others pointing to costs to the city and damage to Elkhorn's growing tourist trade. In the end, the company withdrew its request for a permit. At the same time the Council granted the company's request for another mine in the John Moore Branch area. That one is much less contentious as the area is due to be reshaped anyway in construction of the new US 460.

At least one and perhaps two more "clean coal" projects are dead, according to Crain's Business News. The magazine reports that the New York Power Authority has cancelled plans for the Huntley plant in upstate New York. The proposed plant would require $150 million a year in subsidies if it is to compete with conventional sources. A second New York clean-coal plant, in Jamestown, is also in question. The website DMI Blog quotes an industry analyst as saying that power from clean coal plants will be 30 to 60 percent more costly than conventional power, and that's assuming the technology is developed at all.

Massey and ICG will face charges in the deaths of two West Virginia miners in May, reports the Charleston Gazette. Nathan Dove, an electrician at Massey's Aracoma mine in Logan County, was electrocuted working on a piece of equipment that shouldn't have been energized, state officials say. And 18-year old apprentice Adam Lanham wasn't getting proper supervision when he was struck and killed by a scoop at the ICG Sentinel mine in Barbour County, according to officials. No penalties have yet been assessed in the fatal accidents. ICG says it will contest the violation. Meanwhile, the Gazette says the federal criminal probe into the fatal Aracoma fire of 2006 is nearing its end, though there is no indication as yet what, if any, criminal charges may be filed or against whom.

A new twist on an old mining practice can make deep mining easier and safer, according to researchers from Southern Illinois University. It involves stackable wood braces that can replace the wooden blocks now used to brace mine roofs. The braces are lighter and-because the wood grain runs up and down-stronger than solid wood blocks. Atlas Cribs, as they're called, will take less space and allow better airflow as well. Braces are made from oak, poplar, sycamore, and hickory. Several Illinois mines are testing the new braces.