| West Virginian's were assured that "Obama's War on Coal" is the reason for coal's demise, a talking point used by WV politicos both Republican and Democrat, but the demise has little to do with such "war," with a failing market and about 72 percent of coal from West Virginia, Kentucky and Virginia, the states that make up Central Appalachia, being mined at a loss.
Appalachian miners wiped out by coal glut they can't reverse
By Mario Parker for Bloomberg News
Douglas Blackburn has been crawling in and out of the coal mines of Central Appalachia since he was a boy accompanying his father and grandfather some 50 years ago.
The only time that Blackburn, now a coal industry consultant, remembers things being this bad was in the 1990s. Back then, he estimates, almost 40 percent of the region's mines went bankrupt.
"It's a similar situation," said Blackburn, who owns Blackacre, a Richmond, Virginia-based consulting firm.
Now, like then, the principal problem is sinking coal prices. They've dropped 33 percent over the past four years to levels that have made most mining companies across the Appalachia mountain region unprofitable.
To make matters worse, there's little chance of a quick rebound in prices. That's because idling a mine to cut output and stem losses isn't an option for many companies. The cost of doing so â even on a temporary basis â has become so prohibitive that it can put a miner out of business fast, Blackburn and other industry analysts say.
So companies keep pulling coal out of the ground, opting to take a small, steady loss rather than one big writedown, in the hope that prices will bounce back. That, of course, is only adding to the supply glut in the United States, the world's second- biggest producer, and driving prices down further.
It's become, in essence, a trap for miners ...
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