Midwest U.S. Sees Green in Coal (CLF) (BTU) (KOL)
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Coal is down, but it might not be out.
According to the WSJ, the Midwestern U.S. is seeng a boom in coal and profiting nicely from its. Mines from Missouri to Kentucky (called the Illinois basin) are popping up. More than just profits, the mines are also improving the unemployment picture in the region.
Previously, the region was largely ignored due to its coal deposits being richer in sulfur. But, new technology in the form of scrubbers, which remove excess sulfur to meet emissions standards, are causing many companies to take a second look.
The Illinois basin now supplies coal to energy companies in the southeastern U.S.
Additionally, most miners in the Illinois basin are nonunion, which aids in profits for mining companies. About 6 percent of workers in the region are said to be members of the United Mine Workers of America, versus 27 percent at mines in West Virginia, for example.
About 980 million tons of coal is expected to be mined in the U.S. this year, from 1.1 billion tons in 2011. The Illinois basin should produce 56 million tons of coal, up 70 percent from 2010 levels.
Whether demand for coal will pick up in the interim is yet to be seen. Moving higher include Cliffs (NYSE: CLF), Peabody (NYSE: BTU), Arch Coal (NYSE: ACI), and Alpha Natural (NYSE: ANR), among others. Market Vectors Coal ETF (NYSE: KOL) is also up today.
According to the WSJ, the Midwestern U.S. is seeng a boom in coal and profiting nicely from its. Mines from Missouri to Kentucky (called the Illinois basin) are popping up. More than just profits, the mines are also improving the unemployment picture in the region.
Previously, the region was largely ignored due to its coal deposits being richer in sulfur. But, new technology in the form of scrubbers, which remove excess sulfur to meet emissions standards, are causing many companies to take a second look.
The Illinois basin now supplies coal to energy companies in the southeastern U.S.
Additionally, most miners in the Illinois basin are nonunion, which aids in profits for mining companies. About 6 percent of workers in the region are said to be members of the United Mine Workers of America, versus 27 percent at mines in West Virginia, for example.
About 980 million tons of coal is expected to be mined in the U.S. this year, from 1.1 billion tons in 2011. The Illinois basin should produce 56 million tons of coal, up 70 percent from 2010 levels.
Whether demand for coal will pick up in the interim is yet to be seen. Moving higher include Cliffs (NYSE: CLF), Peabody (NYSE: BTU), Arch Coal (NYSE: ACI), and Alpha Natural (NYSE: ANR), among others. Market Vectors Coal ETF (NYSE: KOL) is also up today.
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