Coal Mining

The US coal mining industry includes about 1,000 companies that operate 1,500 mines, with combined annual revenue of $25 billion. Large producers include Peabody Energy, Arch Coal, CONSOL Energy, and Massey Energy. The industry is concentrated: the 10 largest companies hold about 65 percent of the market.

COMPETITIVE LANDSCAPE

Demand comes mainly from generators of electricity. Profitability depends on efficient operations, as the product is a commodity sold on the basis of price. Small companies can compete if they hold long-term contracts or if they supply local customers. Big companies have large economies of scale in production and distribution. The industry is capital-intensive and highly automated: average annual revenue per employee is almost $300,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Bituminous coal is the major product but comes in many grades of heat value and with different impurities like sulfur. Low-grade coals, like peat and lignite, have a low heat value, a high moisture content, and high residual ash when burned. Anthracite is the highest-grade coal, with a 95 percent carbon content, but is found in only a few areas in the US. Bituminous coal is the most plentiful, with a moisture content less than 20 percent, and heat values that range from 8,000 to 14,000 BTUs per pound. Coal usually contains various contaminating materials, the most important of which are sulfur and various metals. When coal is burned, any contaminants end up either in the air (sulfur and ...